Getting greedy

Do vendors risk spoiling their channels by signing partners in their droves?

Tags: United Arab Emirates
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Getting greedy Resellers are concerned that vendors are overlooking existing channels in favour of recruiting new partners just for the sake of bolstering customer numbers. (ITP Images)
By  Andrew Seymour Published  August 22, 2010

To what extent does loyalty count in the channel business today, especially where a vendor and its partner network are concerned?

With the Middle East market under pressure to show stronger results than those seen during the last 18 months, it is a question that remains particularly pertinent in this current period - and one which is certainly generating debate in the channel.

There is a growing feeling in the reseller camp that vendors have become obsessed with expanding the size of their partner networks to the point where they simply sanction new relationships for the sake of it these days.

Resellers say the common trend at the moment is for vendors to sign up new partners and then insist they've been hired to focus on a particular segment of the market or serve a specific niche.

On most occasions I'm sure such moves are perfectly justified, but that still doesn't prevent it from arousing the suspicions of resellers who feel that existing partners are getting overlooked too easily. Many have become deeply sceptical about vendors that seemingly keep adding to their partner tallies when business doesn't appear to warrant it.

Some corners of the market insist the amount of personnel change taking place within the vendor and distribution communities doesn't exactly help matters either. The first thing that happens when an executive takes up a fresh channel post is that they go and recruit the partners they know from their previous roles, even though it can be disruptive to established channels already in place.

The grievance aired by some resellers is that vendors are now far too willing to ignore the loyalty and presence of their existing partners. They argue that the pressure vendors face to increase product sales is leading to strategies that are built on little more than boosting the quantity of partners on their books.

You might argue that this has always been the case - perhaps it has. But it doesn't alter the fact that resellers' fears have been heightened in recent months.

If the recession has done anything to the market, then it has made the reseller channel look to the vendor community - and the distribution channel - for even more support than before.

They need pricing support, they need sales support, they need financial support. And they also want assurances that their vendor partners are going to back them from the very moment they begin work on a project and start investing in the sales cycle.

Ask any reseller which vendors are the best to work with and once you get past the quality of products and programmes, the answer is often the ones that display a diligent approach to channel management - the ones that do more than just pick up the phone and who actually get out into the market, provide the personal touch and address the issues that partners face.  

It is interesting to note that accusations of vendors becoming too obsessed with partner numbers come at the same time as resellers claim there is a general reduction in this type of channel management.

There are, of course, two sides to every story. I'm sure there are numerous vendors out who will argue that if they are appointing partners where they feel it is necessary then some existing partners might want to assess their own performance first before complaining.

Either way, the whole situation undoubtedly illustrates that channel management is becoming an even tougher job in the current environment.

At the end of the day, it is all about striking a balance between getting the most out of existing partners that have proved their commitment and bringing in new partners only where it is absolutely necessary.

There are many resellers out there which are desperate to remind their vendor partners that the old adage of '80% of business comes from 20% of partners' is still worth remembering.

How high is your channel confidence?

Don't forget to give your verdict on how well you expect the Middle East channel to perform during the second half of the year by taking our 2010 Channel Confidence Survey.

This online survey is completely anonymous and will take just a couple of minutes to complete. We'll publish the results in a forthcoming issue of Channel Middle East.

 To take the survey click here.

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