What Channel Challenges are Keeping You Up at Night?

November 26, 2008 at 10:13 pm Leave a comment

Diane Krakora

Diane Krakora

Amazon Consulting recently gathered 30 people in our semi-annual channel executive round table.  We met to discuss channel trends, find best practices for common challenges and network with industry peers.  Here are some highlights of the discussion.

Coping With Economic Realities
The first issue on everyone’s mind was the economic downturn and possible recession, so we opened with that topic.  Most of the vendors felt  that effectively leveraging partners is even more important as the economy softened.  Most of the attendees were looking to boost revenues and profitability by expanding channels, not contracting them. The smaller vendors felt pressure to quickly open up the channels and engage faster to hit revenue goals.  They were all feeling the pressure to manage their fixed costs (i.e. headcount) and “produce more with less” – which seems to be the current battle cry for effectively leveraging partners. The larger vendors were also experiencing increasing conflict in the channel as more partners pursue fewer deals, and large customers start requiring the vendors to also have “skin in the game.”

Segmentation
This conversation on conflict led us to our second topic of partner, market and product segmentation.  Understanding the partners’ business models, where they sold and what competencies they had, was becoming a critical activity for the vendors that attended the round table.  Knowing the partners’ characteristics and segmenting them according to their strengths and the value they contributed was discuss as a critical step in recognizing and rewarding while minimizing conflict. However, several challenges in this segmentation exercise were noted, including characterizing partner business models (i.e. they’re not strictly “Vars” and SI”s any more) and defining consistent terminology across geographies.

Influence vs Control
This vivid discussion led to our final topic of the morning: understanding what challenges you could solve within the channel team and which ones you could not. In our own version of the Serenity Prayer, the group timidly agreed that some issues could not be solved by the channels team alone. Conflict with the direct field team as a result of compensation plans was the favorite example of what cold not be solved within the channel organization.  There were a few outspoken participants who believe the channel executive job was to fight those tough battles, even if the decision was “above their pay grade.”  This was a fascinating discussion on what was worth fighting for and was considered “beating your head against a wall.”  The best suggestion through this discussion was to bring the internal teams into the field to meet the partners.  Bringing the lawyers, finance, administration, operations, support and even IT team out on the road to understand the channel issues, from the partner’s perspective, has been an effective strategy for change within several of the attendee organizations. If you claim to sell primarily through partners, then everyone in the organization from the CEO on down has the word “channel” in their title and should understand the needs and concerns of this volunteer army.

What’s Keeping You Up at Night?
We closed the meeting with a quick round of  “what’s keeping you up at night?. ” The answers varied depending upon the model, maturity and channel leverage of the vendor company.  The most popular answers were, aligning direct and channel teams; reaching the mid-market; mapping channel coverage, capacity and capabilities and the old favorite of enabling partners through training and certification.

Our next channel executive round table is scheduled for April 16, 2009.   Participation is open to high tech leaders who are responsible for driving revenue through channel partners or develop business opportunities with alliance partners.  If you are interested in joining us in April, please email us at info@amazonconsulting.com.

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Entry filed under: Industry Perspective. Tags: , , , .

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