Sunday, February 10, 2008
Confused about the difference between multichannel marketing and integrated marketing?
You're not the only one:
Wednesday, August 03, 2005
In general, channels are still valued.
They are growing in both the number of partners and the amount of revenue generated from partners. However, they are NOT the only route to market. Direct sales efforts to enterprise and strategic customers also are critical elements of a complete go-to-market strategy.
For many technology companies, their channels have matured from the evangelistic early phase programs to more financially driven volume programs. In the mature program, the value of each partner is determined primarily by the revenue they bring in and the cost to generate that revenue. Non producing partners are ruthlessly eliminated even if they have intangible benefits to the vendor. In a mature channel, net delivered revenue contribution is king.
State of the art right now for many tech vendors is a low touch, high volume program supported by tele reps and robust web sites. Channel management for these vendors will evolve into web managed communities.
Strategic partners will still be supported with outbound field sales reps with skill sets similar to great direct or enterprise sales reps. However, in addition to these traditional skills, they will also have to understand all the channel and partner issues.
The Channel Pro
Wednesday, April 27, 2005
During a discussion with a client in Mexico City today, it once again became clear that there is no differentiation between vendors in the Channel unless they focus on solving partner business issues.
We were discussing how to increase revenue through Ingram Micro in Mexico. The account rep proposed targeting a competitor's resellers. Why would Ingram care about one vendor's revenue versus another's, other things (e.g. Margin) being equal?
Ingram, like all channel partners cares only about the business impact of selling a product, not its technology, features, or design. Only issues that impact Ingrams business such as revenue, inventory turns, average order size, support costs, etc. matter.
What we teach is that if a sales rep rep cannot link to these financial business issues, they add no value or differentiation to the channel partner. This is the difference between channel administration and channel management.
Sent wirelessly via BlackBerry from T-Mobile from Mexico City.
Monday, April 18, 2005
Launching a new channel is never cheap. Before advising partners to build channels or launching your own channel program, understand the costs of developing and operating that channel
A couple weeks ago, a channel account rep and I were analyzing the financials of his channel partner. The income statement showed a decline in gross margin (not an unusually occurrence among resellers) and operating income. While channels can be a good route to market, they most often do not yield improved gross margins. Increased discounts to create an opportunity for the partner versus the direct sales force reduces margin.
There are multiple opportunities to link the benefits of a channel to a vendor. Properly implemented, a channel can deliver improved operating profits and can create barriers to competitors and new market entrants. However, channels are not typically a magic way to increase gross margin, despite any given vendor's enthusiasm. Sales channels are about increasing coverage and reducing the cost of sales.
Friday, March 18, 2005
Several vendors are making real opportunities for mid-market VARs. SAS is doing it right, taking key VARs from Microsoft with the most direct of value propositions: BPoC (Big Piles of Cash).
IGS's expansion into the mid-market is similar to Cisco's channel recruitment push of the mid-nineties. By targeting VARs with customers in the 100 to 1000 employee range, IBM wants to increase partner revenue from 5% to 40%.
Think of this as equity-free venture capital for the Channel. IBM, Microsoft, SAS and other major vendors are creating multi-billion dollar opportunities for qualified partners. Their success will be driven by how well they develop their programs and strategies, by the ability of their field to have executive conversations, and by the way they address conflict.
The Channel Pro
Sent wirelessly via BlackBerry from T-Mobile.
Thursday, March 17, 2005
I recently read the book “Brand Royalty” by Matt Haig. Some publicist sent it to me, having found my name among a list of bloggers.
I hated it. I dislike most business books, especially marketing books. “Brand Royalty” is no exception.
It lacked insight and applicability. The case studies were shallow. The 'secrets' were a mix of consequences, positioning and strategies. The categories were arbitrary. What is the difference between innovators and pioneers, or between 'responsibility brands' and 'emotion brands'? Hell if I know, even after reading the book. I don't think Matt knows either.
I like the topic though. While not “the most important aspect of business”, branding is a key element of a good channel. I am of the camp that builds brands through repetition of experience versus repetition of message.
In the long run experience makes or breaks a brand regardless of short-term publicity. And in the tech industry, fad brands die fast.
Brand development in the channel goes through five phases:
Most problems occur in the channel when companies try to substitute brand for sales or standardization.
The Channel Pro
Wednesday, March 16, 2005
I had a great phone call with a channel provider today. Last weekend I had a voice mail on my home phone that said "If this is the Scott Karren who used to run MSI Consulting Group, please call me." Today I connected with him. Here is his story.
In the late nineties, he read a white paper we wrote called The Emergence of the Solution Provider. The heart of the paper was the transformation of a technology reseller into a business solution provider; someone who sells business impact versus technology. After reading the article, he and his partner restructured their company, TCS Technology, according to the business model described in the paper. He called to tell me how well it had worked and to say thanks.
With direct clients, I usually know the impact we have on the business. But with a white paper printed in VAR Business, the reach is invisible. This is analogous to companies that sell through channels. The reach and impact is not directly visible to sales managers. However, just because it is not seen, does not mean it is not happening. Channel companies need formal systems to identify and measure their indirect reach and coverage.
Thanks again to TCS Technology in Tenn. You made my day. I look forward to visiting with you on one of my next trips across the country.