A vendor's channel sales program is likely to fail for lack of a long-term vision.
"The evolution to channel from direct sales is usually driven by the knowledge that [the vendors] are not penetrating a certain space," according to Anne Zink, chief technology officer of AZtech Strategies.
Rather than try to fill that hole, they should be envisioning their channel strategy 10 years down the road, Zink added. Only then will they be able to successfully merge both direct sales with channel sales in a multi-channel strategy.
The following list represents Zink's advice to vendors attempting to implement a multi-channel program; she specifically outlines worst practices they should avoid. It may also help educate resellers and systems integrators on channel program flaws to be aware of.
Top 10 avoidable channel mistakes for vendors
1. Failing to understand that the channel must be customer-centric. The move to multiple channels changes the dynamic of customer relationships. Creating the value proposition of multi-channels to customers must come first. It will drive every other decision.
2. Failing to gain a solid understanding of the resource investment requirements (people, dollars and time) necessary to build a successful multi-channel strategy. Channels are not a quick fix. You don't pursue them looking for a return in a fiscal year. They are a long term commitment that will not show a significant
3. Waffling! As a vendor, once you commit to channels, commit. On again off again programs have no ROI, hurt the brand and confuse customers. Not to mention they make the company look incompetent and flighty.
4. Underestimating the internal changes required. The move to channels is a cultural change. It cannot be successful with out constant reenforcement of its importance by the entire leadership team. In addition, multi-channels, done right, impacts just about every process within the company, from offer development to supply chain to organizational structure to funding models. Attack these changes early or risk plummeting customer satisfaction and an ineffective channel.
5. Failing to rationalize the entire Global Go To Market strategy. Companies tend to approach the entry to multi-channels by product group, customer segment or channel segment. While, it is not necessary to pursue all channels at once, it is critical to map both the current model and the long-term vision. Understanding the end goal will save money, time and relationships.
6. Failing to understand the inter- and intra-channel dynamics. Channel segments partners. They don't always admit, but it is a core intra-channel dynamic and has been for decades. VARBusiness highlighted the industry impact of large integrators partnering with smaller resellers in their VARBusiness 500 Report. The trend extends far beyond those segments and is not something to be ignored. It impacts everything from Engagement Principles through sales tracking and compensation models.
7. Signing too many of the wrong partners. Rather than mapping end-user needs with channel segment competencies and creating a recruiting profile, companies tend to take all comers when they first move into indirect partners. That creates a host of problems down the road and sets the company up to thinking the indirect channel won't work for them.
8. Creating redundant programs and support organizations by end-user segment, channel segment, product line and geographies. We did a program inventory for a major manufacturer a few years back. They had 36 discrete channel programs. They thought they had four. Feeling like their needs weren't being met or that they needed channels even though the rest of the company didn't, programs quietly grew up out of no where. People became very attached to them. It becomes exceedingly difficult to secure internal alignment around a single multi-channel architecture.
9. Providing insufficient differentiation and ROI between channel support program levels. This makes it impossible for the customer to know which channel segment to look to for support.
10. Failing to exploit the services opportunity. One of the primary barriers to entry for manufacturers is a lack of channel competencies around their specific solution. Providing services to help partners ramp significantly improves adoption rates. In addition, it is critical to understand the services synergies.
About the author: Anne Zink is chief strategy officer for AZtech Strategies, LLC, a company that has been helping clients develop and execute multi-channel strategies since 1996. They focus on creating and executing synergistic strategies that rationalize the needs of each channel segment against the corporate operating environment. AZtech believes there is no magic bullet. Multi-channels are intensely personal. What works for one client will not work for another because each culture and operating environment is different. Their unique combination of an outside in perspective and deep operational expertise makes AZtech an invaluable partner to any company seeking to optimize its multi-channel Go to Market Strategy. You can learn more about them at www.AZtechStrategies.com or call Anne Zink at (201) 788-6078.
This was first published in July 2007