- May 26, 2020
- Posted by: lmwalsh
- Category: Strategy
As disease and technology conspire to keep people separated, the local channel has the potential to bring vendors, partners, and customers closer together.
By Larry Walsh
Back when VARs still roamed the earth and managed service providers made house calls – more than 10 years ago – someone asked me about the size of the channel.
I replied, “about 100 miles.”
The person looked at me funny, as he was expecting a number like “125,000 partners” (which was the standard answer at the time, and largely still is) or a qualifying statement such as, “It depends on what type of partner we’re talking about.”
But no, 100 miles was my answer. Given that customers will eventually need some level of on-site support, 100 miles is the maximum effective operating radius at which a partner – regardless of its nomenclature or business model – can support customers.
If you think about it, 100 miles (or 160 kilometers) is a substantial distance. Without traffic, it takes about two hours to drive it, one way, and then another two hours for the return trip. If an on-site job took no more than four hours, it would still eat up an entire day’s worth of a technician’s time.
The idea of the 100-mile channel is an old one that went out of fashion as managed services became more automated and as cloud computing opened access to infrastructure and applications over vast distances. Why send people on-site when we can remotely manage their machines or instruct users and IT staff over the phone or through video chats?
Myriad reasons exist for having human connections between customers, salespeople, and technical support. At the beginning of the COVID-19 pandemic, managed service providers revealed that they still perform a high volume of on-site work and support to their customers, although the pandemic forced them to change their support and safety protocols. As it turns out, MSPs and other partners still make a fair number of house calls outside of sales and in-sourcing staff.
Reviving the 100-mile channel idea may become a necessity as more companies redistribute their workforces and allow employees to work from home. As many partners discovered at the height of the pandemic, customers’ reliance on their IT vendors and partners is more than we think. Many MSPs saw support requests surge above their operating capacity as businesses raced to get their work-from-home operations up and running. And the demand for support isn’t subsiding, as business reliance on technology to maintain operations is increasing.
The new 100-mile channel will probably re-emerge as vendors discover they need partners at street level –where customers live and work – to provide fast support and guidance through the lifetime of their relationship.
Why should channel leaders think of local support at a time when we see mass adoption of cloud services, self-service support systems, and online collaboration tools? It’s about cultivating the customer experience.
Success is increasingly measured not in sales but in repeat and expanded engagements. Vendors and partners that sell under a recurring revenue model know that customer retention (i.e., renewals) is equally as important as, if not more important than, customer acquisition. A low renewal rate means recurring revenue loses its stability, putting the value of a company at risk.
By providing quick and flexible customer support through local partners, vendors will provide customers with more than just a good experience; they’ll provide a superior outcome. Most customers don’t get the full benefit of their IT investments because they fail to utilize systems and applications to their maximum potential. Rather than providing reactive technical support, local partners can help customers set up and optimize applications, systems, and processes.
Some may say that hyper-local support is too expensive. While it’s true that providing such support comes at a price, many customers need a high level of white-glove handholding to understand precisely what they bought and how to use it. Moreover, local professional service and support is a tremendous opportunity for partners to deliver value-added professional services, which often carry margins as high as 60%.
Vendors and partners will likely continue to lean on their automated engagement tools to sell and support customers. But the notion of having local support for selecting, acquiring, deploying, and optimizing technology has tantalizing potential at a time when technology and a public health crisis are keeping people apart.
Larry Walsh is the CEO of The 2112 Group, a business strategy and research firm servicing the IT channel community. He’s also the publisher of Channelnomics, the leading source of channel news and trend analysis. Follow Larry on Twitter at @lmwalsh2112 and subscribe to his podcast, Pod2112, on iTunes, Google Play, Spotify, and other leading podcast sources. You can always e-mail Larry directly at email@example.com.