If your company wanted to acquire a new accounting system, would you rather buy the software from the vendor directly, or from an accounting system expert that understands your business and can configure the system correctly, and train your personnel on its use, while providing continuous support?
Depending on the size of your company, you'd probably prefer the latter, simply because the value of the provider's expertise will get you operative faster, which means saving directly to the bottom line.
This type of provider lives in what I like to call the Intelligent Channel, an ecosystem of small-to-medium sized companies that deliver complete solutions, not just the hardware or software components. These solution providers exist because buyers need their extra services, vendors need to reach customer segments efficiently and effectively, and providers need solutions to market.
Straightline Strategies is an outsourced business development firm that helps its clients close gaps in their go-to-market execution. This brings us into engagements where the client is considering offering its products through an indirect channel.
The choice to acquire a channel is one of vendor management's critical challenges. I've built and run a number of channel organizations, and these are just a sampling of the gaps I confronted:
- Executive management did not clearly understand the investment, and particularly the time needed to see a return. I've known many C-level managers that thought of the channel as the customer, thinking incorrectly that once a partner signed on to the program, revenue was imminent.
- Channel development managers pursue resellers that are carrying competitive products, hoping that the reseller will aid the vendor in a replacement strategy. This almost never works, and the vendor becomes frustrated because it believes it has an advantage over competitors in price and product.
- Vendor management fails to provision partners, leaving these companies unprepared to help build the market. This often occurs with vendors that have interesting and compelling offerings, but are virtually unknown in the marketplace, and then compound the problem by recruiting a channel to help them build awareness.
