Monday, September 13, 2004
Channel Development: Keeping Costs in Check
Michael Kuehner, a managing partner at Cognition Partners, a VC that I met last week at an open house for Emanation Software (previously CashPoint), a small Seattle software company, mentioned that "the trick to channels is finding a way to manage them without having costs eat your lunch." While this is true even for large companies, controlling channel costs while launching or developing a channel is especially hard for small and startup companies that lack infrastructure, process and policies to manage and grow a channel.
When we look at the projects we have done over the last 15 years, it seems that Michael hit the nail on the head. For the last couple of weeks, Bill Weir and I have been reorganizing our services into five basic products. What we found was that all of our projects were about controlling costs and increasing the ROI on channels.
Yet simple cost controls often cause more damage than they cure. Limit channel research and channel alignment suffers. Decrease field headcount, and mindshare drops. Cut support and partners flee to competitors programs. Recruit on the cheap and support costs skyrocket. This is why our projects usually focus one or more of the following services: Channel Research, Channel Strategy, Channel Communication, Channel Account Management, and Channel Recruitment.
I agree with Michael, much of the investment in channels is underperforming. Channel development is complicated and expensive. Without precise management, these large investments can be swallowed up by the market without an measurable impact on a vendor's business.
The Channel Pro
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Michael Kuehner, a managing partner at Cognition Partners, a VC that I met last week at an open house for Emanation Software (previously CashPoint), a small Seattle software company, mentioned that "the trick to channels is finding a way to manage them without having costs eat your lunch." While this is true even for large companies, controlling channel costs while launching or developing a channel is especially hard for small and startup companies that lack infrastructure, process and policies to manage and grow a channel.
When we look at the projects we have done over the last 15 years, it seems that Michael hit the nail on the head. For the last couple of weeks, Bill Weir and I have been reorganizing our services into five basic products. What we found was that all of our projects were about controlling costs and increasing the ROI on channels.
Yet simple cost controls often cause more damage than they cure. Limit channel research and channel alignment suffers. Decrease field headcount, and mindshare drops. Cut support and partners flee to competitors programs. Recruit on the cheap and support costs skyrocket. This is why our projects usually focus one or more of the following services: Channel Research, Channel Strategy, Channel Communication, Channel Account Management, and Channel Recruitment.
I agree with Michael, much of the investment in channels is underperforming. Channel development is complicated and expensive. Without precise management, these large investments can be swallowed up by the market without an measurable impact on a vendor's business.
The Channel Pro
0 comments
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