Research from Investec earlier this year found that 78% of technology vendors are missing their channel sales targets. The survey also found that poor channel performance is a major factor in a company’s ability to scale up.
So what is going on with channel leadership and their teams? According to Junya Iwamoto, associate director at Investec, “Too many tech companies only view the channel as a means of distribution, and this is seriously damaging opportunities for revenue growth."
The reality seems to be that leadership at tech companies are not seeing the vision for how channel partners can help them to rapidly scale their companies. Consequently, they are not investing in the skillsets of their channel management teams, such as channel sales training and not exploiting best practices to maximize sales results through the partner channel.
The same Investec research illustrated the dramatic difference in success between high and low channel performers. It showed that businesses that deem their channel programme to be ‘highly successful’ gross £50 million from their top five channel partners per year, compared to just £16 million for unsuccessful programmes.
The core of the issue seems to be a question of mentality amongst channel leadership at tech companies. There appears to be two schools of thought in channel management. Firstly, “The school of hard knocks” believes that channel management is simply another sales job. You are either a born salesperson or not, and you must “sink or swim”.
The second school of thought is “The professional”. They believe that channel management is a profession in its’ own right, requiring complex business, management and channel partner sales training to help partners achieve the best for both themselves and your brand.
A good example of the difference between the two schools, and how this impacts on the ground is the new purchase decision process for business solutions. Ten years ago, according to Gartner, over 90% of technology decisions were made by CIOs and IT departments. Today, the number has flipped where lines of business (LOBs) make 72% of decisions. This is predicted to grow to 90% in the next few years and presents a major challenge for both channel partners and channel managers that have not kept pace. Without effective channel sales training around topics like these, results will remain poor.
Channel Managers from “The professional” school of thought continually educate themselves on new best practices so they can help their channel partners perform more effectively. According to research by Aberdeen much of this is driven by channel leadership at the best performing technology companies that insist their channel teams treat channel management as a profession in its own right.
Aberdeen’s research indicates that “Best-in-Class firms” are:
- 36% more adept at training channel partners around positioning / articulating the value proposition
- 19% more evolved in teaching the channel to personalize sales conversations to needs of individual buyers
- 40% better at understanding business challenges of customers and prospects
Which school of thought do you belong to? Are you channel managers “36% more adept at training channel partners around positioning” than your competitors? How strong are they at managing channel conflict and building partner loyalty? Are they above or below average at joint business planning with the channel partners they manage?
About the Channel Institute:
The Channel Institute is the only training body in the world that provides business training and certification specifically for the channel profession through a syllabus validated by a vendor-independent Industry Advisory Council. The Institute currently offers three certificate courses supporting channel managers, channel marketers and channel resellers:
- The Certificate in Channel Management
- The Certificate in Channel Sales
- The Certificate in Channel Marketing
- The Certificate in Digital Co-Marketing
The Channel Institute also licenses its course content to universities and vendor training academies to bolster their channel training libraries.
More information: https://www.channelinstitute.com.