Reckless channel development could prove costly

Vendors that have taken a scattergun approach to their channel development activities in the Middle East could actually find that greater self-imposed scrutiny of the value they offer to partners isn’t as painful as it might seem

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By  Andrew Seymour Published  March 30, 2009

Vendors that have taken a scattergun approach to their channel development activities in the Middle East could actually find that greater self-imposed scrutiny of the value they offer to partners isn’t as painful as it might seem.

There are certain things resellers and systems integrators have come to expect from working with a vendor. At the very least, it’s the availability of product, assistance with business development activities and, of course, the right level of financial incentives, be it in the form of margins or rebates.

More conscientious vendors will no doubt be accustomed to throwing in plenty of free training as well, perhaps even providing a range of marketing tools to generate extra momentum in the market.

The channel has come to take such benefits for granted over the years, encouraged by vendors that have cheerfully cast resources and programmes in their direction — not necessarily because it’s been the right thing to do, more that it’s what everybody else seems to have done.

But resellers certainly can’t be blamed for wondering if that scenario might begin to change in the months ahead.

On one hand is the possibility that vendors will have to contend with smaller channel budgets in future, invariably leading to a decrease in spend on channel activities as a result. The more likely prospect, however, is that vendors will face greater pressure internally to account for every cost and decision related to the partner initiatives they implement.

Does that mean the channel development activities of vendors in the Middle East market are going to become less effective? Not necessarily. But it does mean vendors will have to evaluate how they make their channel development dollars go further than they have done in the past.

They will have to justify the steps they take and work out what is important to the future of their business and the health of the channel.

If they take option A, say, is the net effect really going to be greater than if they’d taken option B? Such questions may have washed over vendors that indiscriminately chucked cash at the channel in the past, but that may no longer be allowed to remain the case now.

Much will depend on the goals that vendors are working towards internally, as well as the goals they have in mind for their sales channels. Whether those objectives are tied to market share, revenue gains, expertise or customer satisfaction will determine the choices they make.

The disposition of partners needs to be considered too. Right now, resellers are also facing internal challenges when it comes to costs, time and resources. They want to see actions and investments from vendors that provide them with material benefits to move forward in the current climate.

Fortunately, the fact remains that you don’t have to be the largest company with the most marketing dollars to make a success of channel development.

A look at some of the winners of last week’s Channel Middle East Awards is evidence that not all companies making effective channel investments in the Middle East are automatically the dominant force in their fields.

The Peripherals Vendor of the Year, Promate Technologies, for instance, operates in a sector inhabited by giants such as Microsoft and Logitech, but it has taken commendable strides to develop the channel by bringing on board country and merchandising managers to help retailers navigate the challenges they face.

Astute investments in making more marketing-related collateral available to partners, particularly Arabic content, has also enhanced its standing in the channel.

The same can be said of Citrix, the Software Vendor of the Year. The company might not always be the first name that springs to mind when you think of heavyweights in the software market, but it has still done an excellent job of channel development in the Middle East, providing higher levels of pre-sales support, automated lead allocation and one-to-one sales training.

Other so-called ‘challengers’, such as Cyberoam and F5, claim to have equally compelling channel success stories to tell, illustrating that progress can be made if you know where to focus.

Regardless of size, vendors who are likely to see improvements in the channel relative to the scale of their operation will be those that can calculate which tools or resources they need to expand for partners to see immediate benefits.

The channel community is fragile at the moment and, so long as that remains the case, vendors capable of establishing which channel development activities will provide the most satisfactory returns could end up the happier.

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