Are you Really a Channel Company?

I come across many companies that say they are a 100% channel and they don’t ever sell direct. Firstly, that is probably unlikely, but regardless, even if 100% of your business actually does go through the channel, that doesn’t make you a channel company. It’s how you leverage the channel, and how the channel leverages you, that determines whether or not you are a channel company.

For example, many vendors have sales people that uncover an opportunity, present their solutions to the customer, involve their technical people in architecting the solution, drive the sales themselves and just before they get an order, they bring in a partner to close it. That’s not leverage!

Leverage Through Partnership

True leverage means that your partnership helps you win business that would otherwise be difficult or impossible to win without the other party. For the vendor, it may mean a new customer or new revenue stream, and for the partner, it may mean a more profitable product sale or additional services.

In the example I described above, the vendor is doing the work, and secondly, it’s not giving the partner enough time to properly position their services (which is where they actually make their profit by the way). That approach creates what I refer to as a “fulfilment” channel. And it doesn’t matter if you are selling complex solutions – it’s still a fulfilment channel.

Ok so you could argue that you have more control doing it this way. And you could also argue that no partner can talk about your product as well as you can. But you know what that argument sounds like? Like the Manager who won’t delegate responsibility to their staff because no-one can do it as well as they can.

And how does that work out…

Well, either they work ridiculous hours to get everything done themselves, or their good people eventually leave because they’re not learning. And guess what,., it’s the same with your channel.

If partners think you only view them as order takers, or the guys who process the small stuff you can’t be bothered with, they find something else that’s more profitable. Like selling their services and de-emphasizing the importance of your brand. If you don’t believe me, have a look at partner websites today compared to 10 years ago. Back then, the vendor’s name was prominently displayed on the front page. Now it may not even appear at all.

How valuable is the channel to you… really?
So being a “channel company” is about actually behaving like a partner. If you want partners to be loyal or committed to you, you have to demonstrate loyalty and commitment to them. In your program, in your engagement, in your language, and most importantly, in your actions.

Here are three questions you should ask yourself:

  1. Is the channel leader in your business on the executive leadership team, or are they one or two layers down?
  2. Does the channel leader have the same influence as the sales leader, or do their views always take second place?
  3. At your internal company events, do you recognise the channel’s successes when you hand out awards, or do they typically go to the sales reps who sold the most

Remember the old adage – it’s not what you say, but what you do, that counts. And your responses to these questions may give you a clue as to how valuable the channel really is to your business. Even more importantly, it’s also sending a signal to your staff and to your partners.

In fact, it’s interesting to me that some vendors are very quick to point out that you can’t completely rely on the partner because they have their own agenda that doesn’t align with the vendor’s quarterly number. But partners will equally say they can’t completely rely on vendors because they have their own agenda that doesn’t align with the partner’s customer strategy. I’ve always found that if you are in doubt about how to behave try trading places.

Our firm started 15 years ago with the motto “Leverage Through Partnership”. In other words, helping companies leverage their relationships to achieve something greater than they could achieve on their own. And while the channel has changed enormously over that time, that principle that a partnership is a two-way street hasn’t changed.

Partnerships exist because both parties add value to each other. A couple of years ago, I wrote an article  on what “adding value” means and made 5 suggestions for vendors to better engage with the channel. Keen to hear if you think it’s still relevant today. Ping me on with your thoughts