Channel Chiefs: What your partners told me in Las Vegas last week!

Previously posted by Michael Fair:

Channel Partners 2017 is now in the rear mirror and I wanted to take some time to reflect on my many meetings with both service providers and their distribution partners in Las Vegas. As a consultant to the cloud and services industry, I get exposed to the good, the bad and the ugly of the various channel programs that compete for sales attention. There were 82 new exhibitors at the event which is indicative of the explosive growth of the channel but many existing programs still have not embraced industry best practices as they hone their programs. These are some of the comments from your partners:

“M&A is not a good thing for us”. I know it is important to communicate that any M&A activity will be “Business as Usual”, but that is often not the case as these business combinations are very disruptive to partners. In most cases the partner already has access to the footprint and services of the acquired firm and at the very least the combination results in a further lack of competition. There are many recently M&A combinations announced – be truthful that the combination will take time and mistakes will be made.

“What is your true differentiation?” There are many me-too service providers out there and it is difficult for them to communicate why they are unique as many of the new entrants tend to bleed together. Communicate very clearly what makes you unique to add to the partners portfolio.

“Pay commissions on time and accurately”. It is amazing how difficult this is. I bumped into may service providers, some actually very large, that still use spreadsheets and temporary help to pay commissions to partners which results in errors and a bad experience. Use platforms and systems that are designed to manage commissions payments.

“Invest in ease of doing business”. This is often the most common complaint I hear. Instead of investing in API’s and systems to make interactions easier, often service providers throw additional expensive bodies to manually deal with processes that systems should provide. This is the only way for the partner to scale with the service provider. Many partners have invested properly in systems and simply want the service providers to do likewise.

“Why can’t I sell all of your services to all segments and verticals?” Although the recent trend has been to reduce any market segment limitations by the larger service providers, many programs continue to whittle down the segments, verticals or customers that partners are allowed to sell into. Partners will only increase distribution and limiting the scope of what they can do will limit sales.

“Let me co-sell with your direct salesforce”. Again, many of the major programs have recently embraced teaming between direct and indirect channels -after all this is how most technology is sold to end users today by the likes of Cisco and Microsoft. This has also become the standard for many hosting/colo and UCaaS providers but there are still many programs that do not embrace this best practice and it limits sales and creates unnecessary conflict. There are ways to do this right and it does synergize sales.

“Why don’t you provide your full serviceability data to me?”. It is amazing to me that so many service providers still feel that their lit building, near net, fiber routes, etc are proprietary information and should not be provided in detail to partners. Most partners have very sophisticated serviceability tools and if you don’t properly show up in them you will not be sold by the partner.

“We use social media to communicate with our subagents and customers, why are the service providers not leveraging new forms of communication?” Most programs have a long way to go regarding use of social media and partners are ahead of their service providers in this area – especially millennials.

One comment regarding a common complain of service providers is the rapid escalation of marketing and sponsorship required costs that the larger master agents are imposing on the programs. The service providers feel that these costs are getting out of hand and that a clear ROI (Return on Investment) must be demonstrated. The master agents are starting to look more like the technology distributors regarding required marketing expenditures and there is pushback starting to occur. Do your best to provide a clear ROI and the service providers will embrace your programs.

Let me know comments back on any of these areas as sharing best practices floats all boats.

– Michael Fair

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