When vendors talk about engaging with their channel partners, are they really walking the walk with their “partner engagement strategies”? Are these strategies mutually beneficial? What are the attributes of an optimized channel partner program?
In an effort to investigate the attitudes of channel partners and map their needs back to vendor needs, Harte-Hanks performed a research study with a small but representative sample of value-added resellers (VARs). We conducted interviews with 265 VAR and reseller leaders across North America, primarily in technology markets. Three themes came through as a result of this research: consistency, account management and business expansion.
Finding 1: Consistency
How does a vendor secure mind share with a partner when partners work with so many vendors simultaneously?
This is an all-important concern. Surveyed channel partners reported that the average number of vendors they work with at any given time is 21. Some 20% of channel partners work with more than 25 vendors and 12% work with more than 40 vendors. Getting the right product into such a busy market at the right time in the product life cycle to maximize revenue can be difficult at best.
Gaining mind share with partners is more likely achieved when conducting business with the vendor is made easy. Ease of business often translates into product availability, transparent and consistent pricing, effective pre- and post-service and support, and simple programs in which partners can engage. It also means understanding and rewarding partner business models for value, not just volume, and supporting sales and marketing efforts not just monetarily but also with an efficient service and support infrastructure.
Continuity also was ranked as important to successful channel relationships. More than half (51%) of surveyed channel partners report that any one vendor changes its programs every six to 12 months, and 9% report changing partner programs more often than six months. Close to one in three channel partners desire this amount of change to slow. Channel partners crave continuity and consistency, and are resistant to change because it is “hard and expensive” to turn over one program to another so constantly.
Finding 2: Responsive account management
The Harte-Hanks survey also asked channel partners to indicate their preferred means of communication with and from vendors. Surprisingly, only 1% mentioned Web portals. Equally surprising, only 1% of respondents rated newsletters highly. Given the amount of resources invested in portals and newsletters, there appears to be virtually no reported return on investment. However, two-way communications do come out on top: 93% of surveyed partners said this is their preferred method. E-mail, used as a dialogue builder, leads with 78%. Timely, accurate responses to incoming inquiries must be made a priority to enhance this dialogue effort.
Partners indicated they look for strong account management, which must be backed up with strong people who know partners’ businesses and products, and can help them improve their offering, service and support in a crowded and competitive space.
Fifty-six percent of channel survey participants said they do not share their business plans with vendors. The question becomes: How close can the relationship between the channel and vendor be when more than half of the channel doesn’t share its business plans? Vendors must ask themselves, “Do we need business plans from all partners or just the right partners?” “Who is loyal and who isn’t?”
If partners want two-way communications but fewer than half share their plans, it is difficult or next to impossible for vendors to provide effective and cost-efficient account management. The answer to this dilemma may be that different account management models are needed for different types of partners. And communication needs to support different account management models.
Finding 3: Business expansion
Lead generation is the primary reason channel partners want to run joint marketing campaigns. Sixty-four percent of survey participants support this objective. However, only 1% of partners say their primary source of leads is their vendors. There exists a substantial disconnect in the value seen by partners from leads delivered by their vendors.
What is the take-away message? Partners and vendors need to close the loop on lead generation. The lesson is that vendors that don’t have a closed-loop process for all marketing programs won’t know what’s delivering and what’s not. The only way to avoid black holes between channel partners and vendors is to design appropriate closed-loop, cooperative campaigns. Bottom line, what is required for successful lead generation is a data-driven approach.
At the end of the day, all channel partner/vendor relationships need to be managed. Assume that if one vendor is not managing channels appropriately, another vendor (a competitor) probably is. The way to true channel engagement is in finding and adopting the right business model.
Gary Skidmore is corporate officer and senior VP at Harte-Hanks Inc. This column is based on his presentation at the Baptie & Co. Channel Focus Conference in April 2006. Skidmore can be reached at [email protected].