Reimagining the Indirect-Sales Channel

When asked to present reasons why the United States is the greatest country on Earth, a character on HBO series “The Newsroom” proclaims simply that it’s not.

That’s the anecdote Larry Walsh, CEO and chief analyst of The 2112 Group, opened up with at yesterday’s Webinar, titled “The Channel Isn’t the Best Route to Market, but It Can Be.” The provocative scene underscores what’s happening today with the technology channel, once heralded as the most effective way for vendors to expand market reach and reduce the cost of sales.

To regain some of its former glory, the channel needs to acknowledge that it’s not currently the best route to market. In other words, vendors and solution providers need to recognize the system’s flaws and face them head-on.

According to Walsh, partners have a rosy outlook on their businesses, but that optimism isn’t translating into return on investment for vendors. Many solution providers are underperforming, lack marketing acumen, rely too heavily on vendor incentives, and show reluctance to embrace new skillsets and emerging technologies. On the flip side, vendors aren’t doing enough to enable partners to leverage up-and-coming solution sets such as Internet of Things (IoT) and Big Data. What’s more, channel programs are too complex; vendors and partners don’t trust each other; and neither side is putting as much energy as necessary into formal business planning.

The good news, according to Walsh? The channel’s problems are soluble. All that’s required is a shift in perceptions and expectations, and adherence to some action items. “The channel can be great…but it needs to perform for the future, not just the present,” Walsh said. “Vendors and solution providers need to imagine what’s possible and anticipate what comes next.”

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The Channel Isn’t the Best Route to Market, But It Can Be

These days, the channel isn’t all it’s cracked up to be. For vendors, building a channel is all about augmenting resources, lowering costs, and extending market coverage. Yet many vendors complain that they’re not getting a return on their investment in partners. They say that underperforming solution providers and inconsistent channel sales activity reduce their overall profitability.

But it doesn’t have to be this way…