Too many of today’s North American channel chiefs are focusing their efforts on internal and operational efficiencies and are not focusing enough on driving partner sales effectiveness and lead generation, say Blueroads Corp. executives.
Blueroads, a San Mateo, Calif.-based company that focuses on helping to drive revenue for both vendors and their indirect channel sales communities, commissioned a survey with the help of Sirius Decisions, a Wilton, Conn.-based research firm, to examine how vendors and channel chiefs across North America are investing in their respective channels. The most important finding to come out of the survey is that organizations are spending too much time on things such as enhancing partner portals, programs and creating market development funds (MDFs) for partners, and aren’t spending enough time on things such as deal registration and good, quality leads for partners.
Craig Downing, vice-president of product marketing at Blueroads, said that more than 1,200 North American channel chiefs were surveyed between Sept. 15 and Sept. 16. 2008. Eighty per cent of the respondents were channel chief executives, whereas the remaining executives surveyed were of vice-president of channel sales or operations status. The organizations that were surveyed conduct at least 50 per cent of their overall revenue through a multi-tier distribution channel and generate at least $1 million and beyond annually. The executives that were surveyed represented the software, computer/telecommunications and hardware markets, information services, professional services, physical security and professional audio/video industries and more.
“To help predict future and past behaviour, we found most (respondents) fell neatly into one of two camps, which are the operational efficiency group and sales effectiveness,” Downing said.
As Charles Watson, senior vice-president of sales and marketing at Blueroads, explains, “Most organizations that have a channel are way too focused on internal and operational efficiencies and aren’t focused enough sales efficiencies.”Internal efficiencies, Watson says, usually focus on automation and removing costs. Examples of such operational efficiencies, he suggests, are things such as introducing updates to a business’ partner portal, creating a chat room, introducing MDFs, or adding a new level to the company’s partner program. While this may be good for the business, Watson suggests this type of focus is not beneficial to channel partners because it does not in any way work to drive partner revenue.
To achieve sales effectiveness, businesses should focus on things such as quality lead management and deal registration, which will ultimately drive revenue and leverage the channel further, Watson says.
“VARs aren’t clamouring for a better portal or for a platinum plus-type of program,” Watson said. “What partners want are more better, quality leads and things like that to help drive sales.”
Based on the survey results, 23 per cent of respondents said that “recruiting more partners in existing markets is their number one goal” for their organization over the course of the next 12 to 24 months.
Downing said that while recruiting partners is good, recruiting more in the vendor’s already existing markets may not be the wisest business strategy.
“Until you can get a good quality lead sent immediately to the right partner, adding more partners into the mix isn’t good,” he said. “Instead, better enabling existing partners is a better approach to make sure (a business) doesn’t have three partners competing with each other, or with a direct sales rep.”
It’s having too many partners in one space which often leads to channel conflict, he adds, saying that in many cases, direct sales and channel partners are often stuck working on the same deals.
“(Organizations) need to start doing a better job with lead management,” Downing said. “Often partners get the leads the direct sales reps didn’t want or they’re sales that have sat around on the desk for seven days. (Businesses) need to do a better job with sending and delivering out high, better quality leads quickly, and to the right partner.”