Vendor/channel partner engagement is weak and fragmented, says survey

In a recent survey, cloud resellers and other channel partners said they believe their top vendors are failing to gather and act upon their feedback.

One out of two channel partners don't think that their top three strategic vendor partners are doing a good job of soliciting their feedback on their channel partner programs, responding to the feedback or acting on it, according to a research study by ZS Associates, a global consulting firm.

Furthermore, cloud reseller partners expressed greater dissatisfaction in how vendors engage with them than traditional reseller partners.

The cloud resellers want to be asked questions that are pertinent to their particular challenges … instead of being asked the same old questions that are more appropriate for someone selling on-site solutions.

John DeSarbo,
principal, ZS Associates

These findings are in response to the fundamental question the ZS survey asked partners: "How satisfied is your company with the manner in which vendors gather and act upon your feedback?"

The less-than-stellar results for high-tech vendors are a strong indicator that they need to do a better job communicating with their indirect channel partners, who they rely on to drive $1.5 trillion in annual sales, according to ZS Associates.

"We weren't addressing issues such as pricing or product capabilities -- areas that are traditionally contentious in the channel. We asked questions about fundamental vendor channel management -- i.e., 'How's the relationship working?' and 'Do you feel like your vendor partners are supporting you?' -- which is why the responses gave us pause," said John DeSarbo, principal at ZS Associates.

The study was conducted in the third quarter of 2013 and surveyed 215 channel partners in the U.S. about 492 vendor partner relationships. Channel partners fell into five categories or business models: traditional resellers; cloud resellers; managed service providers (MSPs); independent software vendors (ISVs); and consultants, sales agents and outsourcers.

DeSarbo held that the findings reflected poorly on IT vendors' "voice of partner" mechanism, a term used to describe the ways that vendors gather feedback from their channel partners. Those mechanisms include annual surveys -- information gathering processes conducted at partner conferences, during quarterly business reviews or other events -- and queries to channel partners who are on vendor advisory boards, for example.

"Thinking about these [feedback-gathering] activities in an integrated way doesn't happen often, either. Instead, these activities are carried out in a fragmented way, and that's part of the problem," he said.

Another problem with these "voice of partner" activities is that some channel partners view them as inefficient, preferring that vendors shift to more current partner engagement communication channels, such as social media or other online channels.

Additionally, not all partner types feel that vendor survey questions are relevant to their business. This is particularly true for cloud resellers. Only 45% of cloud resellers expressed satisfaction with vendor "voice of partner" activities, compared to 64% of traditional VARs and 63% of MSPs, according to the ZS survey. Cloud resellers are defined as partners who generate greater than 30% of their revenue from cloud services.

It is a surprising finding, considering the push from vendors for channel partners to evolve their business models from traditional to incorporating cloud services.

"The cloud resellers want to be asked questions that are pertinent to their particular challenges, such as building a cloud services business or driving cloud adoption, instead of being asked the same old questions that are more appropriate for someone selling on-site solutions," said DeSarbo.

It's important to note that the size of the channel partner's business, as viewed by revenue, seemed to have less sway on partner responses than whether they focused on cloud services.

According to DeSarbo, about half of survey respondents were partner businesses with less than $50 million in revenue, one-quarter were larger businesses reporting more than $50 million and the remainder partner businesses reported revenue in excess of half a billion dollars. Looking at channel partner responses based on company size, larger companies with revenue in excess of $50 million expressed greater satisfaction than smaller partner businesses, 65% to 48%, respectively.

So, for example, only 29% of small partners agreed with the statement, "I am clear how this vendor uses my feedback to make decisions," as compared with 42% of larger partners, according to DeSarbo.

Another finding from the ZS survey is that channel partners responded more favorably to the "voice of partner" efforts of software vendors than hardware vendors -- 58% to 53%, respectively.

While DeSarbo wouldn't share the names of the vendors in the study, he did say that survey respondents were asked to answer questions based on their relationships with their top three strategic vendor partners, and the results showed that the top 10-15 hardware and software vendors in the industry were referenced.

Key messages for vendors based on the survey results are that there's no one-size-fits-all "voice of partner" program and that vendors need to tailor their feedback activities to improve channel partner engagement if the goal is to increase revenue generated through the channel.

DeSarbo indicated that some vendors are more advanced than others when it comes to improving their "voice of partner" programs. Based on the channel partner feedback, suggestions for vendors who need to take action should rethink the questions that they're asking their channel partners, broaden partner engagement options and share the results of the partners' feedback to let them know that they're being heard.

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