IT vendors and distributors with a channel programme have their own sales strategies, but they all have one goal - growing market share.
IT vendors and distributors with a channel programme have their own sales strategies, but they all have one goal - growing market share. A solid roster of partners can help vendors and distributors to achieve growth, but without consistent engagement with the channel, a vendor or distributor doesn’t have partners, it’s just reactive resellers, writes Clayton Vallabhan.
Channel management strategies are critical to identify and profile your target partner segments, engage existing target partners and guide new ones through the sign-up process thereby delivering your company a sales pipeline filled with qualified sales leads. More IT companies are developing channel initiatives, incentives, rebates and loyalty programmes that aid them to develop and manage their channels better.
It’s hardly surprising that both vendors and distributors are tweaking and fine tuning their channel management programmes, and applying more rigorous checks to make sure the channel initiatives are helping partners to gain benefits, as well as deliver the right kind of solutions and information to the consumer thereby adding more value to the brands they represent.
While many multinational vendors have well-established solid channel management frameworks in the region, often replicating their successful worldwide channel management strategies, some have found the Middle East requires a different approach altogether.
Dan Smith, head of integrated marketing, MEA, Xerox said: “At Xerox, we consider a partner’s input to be very important. We take time to listen to them and enhance or fine-tune the marketing tools or activities in order for them to be able to use in a better way. It’s through this open dialogue that we can achieve a package of benefits that suits both us and our channel partners.”
Youssef El-Arif, sales manager, MEA at Belkin said: “In our business it is all about the consumer. We have a product and we need to sell it to the consumer. The only way to do that is through our channel partners. Being a multi-category vendor, we have a wide range of products in our portfolio and the importance of managing the right channel to sell the right products to the right customer is a big focus for us. The diversity of the channel in our region puts us in a situation where we need to manage each channel differently as they have different ways of doing business but the objective is the same, sell the product to the consumer.”
Different reseller partners supply a wide range of products and to different customers. While some may carry the entire range of a particular vendor, vendors all agree that the diversity of the channel is something that has to be considered when developing a plan that manages partners. Defining categories amongst resellers is important, as well as tailoring a set of benefits and rewards. If these aren’t scrutinised and studied closely, vendors and distributors will end up supplying unsellable stock to their channel partners. It is important to feel the pulse of the channel and know the strengths and weaknesses of certain resellers.
Niranjan Gidwani, deputy CEO, Eros Group, said, in order to devise a strategy for reseller partners, one has to take cognisance of the aspirations of the partner. “Our channel management strategy starts from having preliminary partner information and this is something which can change each financial year,” he said. “We strategise and see how best we can fit into their scheme of things. Ultimately, the effort is to offer the best combination of product, pricing and promotion, keeping each retailer’s landscape in scope. This way, it becomes more likely that it will be a mutually beneficial relationship.”
Efficient channel management
Some vendors and distributors have advanced frameworks in place that help them to manage the various channels they engage with. Prudent channel management is one way of building and developing a channel base that is loyal and committed to growing the business.
Gidwani agreed and added that specific to the IT industry, an efficient channel with a smooth sell-in sell-out mechanism is extremely critical as one bad decision or prolonged delay in a decision can cost the company dearly. “A good channel partner programme is one that is clearly understood by all stakeholders and one that has tangible benefits attached to it. Not to forget, there are various partner programmes across vendors running concurrently at any point in time. Therefore, a complicated programme will not be friendly to resellers as it invariably goes into the ‘what if’ mode, where the benefits seem more difficult to get,” he said.
Dong Wu, VP, Huawei Enterprise Middle East concurred and said that support throughout the sales cycle is paramount to recognise the needs of partners. He explained that Huawei works very closely with value added distributors and partners from different levels to deliver the best solutions to end-users, focusing on different industries such as government, public utilities, finance, energy, power and transportation.
“One of the main pillars of prudent channel management is providing balanced support to partners throughout the whole sales lifecycle. You have to recognise the needs of different job functions within your channel partner’s organisation,” he said. “We provide marketing support for local events our partners organise. We make it as easy as possible for them to showcase our products to customers, providing them with demo units and sharing our marketing and sales tools online. We tailor our channel strategy to meet the needs of reseller partners in different vertical industries and local markets.”
In addition to prudent channel management, vendors and distributors are investing heavily in partner programmes, training, partner certification and market development funds (MDF).
Mike Hibbert, channel partner manager, Middle East and Africa (MEA) Infor said the company has three tiers for each reseller the company targets. “Each partner sits in one of our three tiers namely Associate, Silver and Gold partner. Each status has its own rewards, margins and levels of support associated with it. Our partners benefit from a degree of exclusivity as we do not flood the market. Our recruitment strategy is always quality over quantity so partners are not fighting each other in the same territory for business.”