Exploring the Channel Disconnect

CHANNEL DISCONNECTwithin Technology Vendor Partner Programs
Optimising Your Reseller
Partner Program

As the hardware technology industry
matures and different technology service
providers across the cloud, software as a
service and analytics areas enter the fold,
traditional channel programs are struggling
to rectify the problem of the ‘channel
disconnect’.
The channel disconnect exists because
vendors originally set up channel programs
with the aim of driving revenues and market
share without the high investment required
to build their own larger sales forces and
associated operational infrastructure.
However, vendors often drive and incentivise
their channel to achieve different results
from their original objectives without
realising it. In addition, channel partners
often have different drivers and objectives to
those of the vendor. This creates a channel
disconnect.
Channel Disconnect in the Technology Industry © The Sales Way 2016
P.2
www.thesalesway.com INTRODUCTION

P.4
www.thesalesway.com BACKGROUND
Many vendors and resellers have lost sight
of the reason why channel programs were
created: to enable vendors to reach many
more customers, without having to invest
in their own operations and sales forces.
The channel program concept enabled
vendors to outsource the selling of their
product to third party companies (resellers)
who are incentivised to sell the product
on the vendor’s behalf. What makes this
program work is that the vendor creates
the product and ensures there is a smooth
process to manufacture, market and deliver
the solution, whilst the reseller takes on
responsibility for finding the customers and
selling the product. Yet what often occurs in
reality is that resellers are either incredibly
self-sufficient and do not engage with the
vendor, or they rely heavily on vendors to
do a lot of the selling work which should
instead be completed by the reseller.
This results in a disenchanted and discon-
nected channel.
Resellers are often self-sufficient and
unhappy at the intrusion of vendors into
their customer opportunities. Or, in other
cases, vendors are forced to employ large
channel teams to support channel queries,
issues, marketing and sales activities in order
to ensure a sale happens. Resellers are often
unhappy with the vendor for not ‘doing
more’ and there is an increasing expectation
that vendors should bring qualified sales
opportunities to the resellers. However, this
is unsustainable in the long term for vendors
and goes against the very reason for which
channel programs were originally created.
This is why we are now seeing increased
dissatisfaction from vendors about their
resellers’ performance, and resellers’
unhappiness with the support coming from
their vendors.
The advent of newer software providers
offering simpler affiliate programs that
resonates with their reseller base only seeks
to intensify the disconnect experienced by
traditional vendors who are trying to better
connect with their channel again. The range
of vendors that the modern reseller has to
keep up with is expanding; some resellers
now sell traditional hardware from one set
of vendors, licences from their software
vendors, cloud services from a range of
other vendors and web-based software-
as-a-service from an entirely different set
of vendors. This can be difficult to manage,
price, sell and understand; and that is
before you have developed strategic sales
messaging and processes to sell each
product effectively.
resellers are often self-sufficient
and unhappy at the intrusion
of vendors into their customer
opportunities

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THE VENDOR
CHANNEL MANAGER
P.6
Vendor Channel Managers have a broad
remit and their responsibilities tend
to fall across many of the following areas:
Recruiting new partners
Growing the vendor’s share of wallet
within existing partners
Growing overall reseller revenues
Increasing profitability of partner sales
Making it easier for partners to sell a
vendor’s product
Administering sales and product
training programs
Creating incentive programs at the
partner manager/director level and
partner sales level
Developing joint go-to-market
strategies with partners
Crafting partner-focused solutions,
rather than just products and services
Enabling vendor messages to transition
through the partner ecosystem to end
customers
The channel manager often does not have
the authority to drive change in a number
of the above areas, such as developing
solutions rather than just standalone
products – as these tasks sit at the corporate
marketing level within the reseller and the
vendor’s products are often not attuned to
the resellers who will eventually sell them.
As David Ricketts, Head of Sales and
Marketing at C24 (a Six Degrees Company)
commented, “Volume resellers and niche
resellers should be approached in different
ways as their business models are often
completely different”. Gus Safadi of KAINOS
Channel, a channel sales and outsourcing
company in San Diego, USA, added that,
“Many programs are designed for the big
resellers with volume sales rather than the
reseller that might be smaller but loyal to
them.”
The vendor often treats all resellers as
broadly similar; it does not change its
product proposition depending on the
reseller being a cloud service provider or
a traditional hardware reseller. The vendor
may develop separate channel programs for
each reseller type, but the product and its
messaging often remains the same.
Channel Managers must therefore focus
their efforts on making it as simple and
compelling as possible for resellers to take
on their technology solutions and sell them
on to clients whilst making the process as
profitable and valuable as possible for the
vendor. These two sets of drivers can often
be in direct competition with each other.
“Volume resellers and
niche resellers should be
approached in different
ways”

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THE VENDOR
CHANNEL MANAGER
P.7
Simple
• Incentives and commission should be compelling
to the reseller salesperson and partner management
• Revenues should have the potential to be at a
significant level to be classed as an important
part of the reseller business
• Product, solution or service should be attractive
and desired by customers to drive sales and
interest to the reseller.
Compelling
ValuableProfitable
• Simple to understand and learn the product
information
• Easy to purchase, quote, resell an deliver
• Convenient to do business with the vendor
throughout the sales cycle
• Each sale should deliver and appropriate
degree of profitability to the vendor
• Fewer vendor resources are required to
sell the product, reducing time and staff
costs involved in each sale
• Each sale should deliver and appropriate
degree of profitability to the vendor
• Fewer vendor resources are required to
sell the product, reducing time and staff
costs involved in each sale
VendorObjectives
In order for Channel Managers to attain these objectives for both the reseller and the vendor,
there are a number of factors which impact whether the Channel Manager can influence
partner businesses to move towards the key objectives of the Vendor’s channel program.
RESELLERrObjectives
How is your product
being sold?
As a vendor, do you
understand all the ways
in which your product is
being sold? Maybe you
have the luxury of keeping
tight control over how the
product is marketed, utilised,
packaged and sold.
Very often, vendors do
not control this, and are
unaware of their reseller’s
business model and sales
messaging, and as a result,
vendors target resellers with
inappropriate messaging
and incentive programs
that can’t be applied to the
reseller’s customer base.

Exploring
the channel
disconnect

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Exploring the
channel disconnect
P.9
There is no one formula to
explain the channel disconnect,
yet rather a series of patterns
or ‘situations’ that create an
overall picture of a complex
relationship between vendor
and reseller.
Customer Disconnect
For a customer to have rece-
ived a call from a reseller
account manager about a new
technology solution, the initial
sales message and initiative may
have travelled through 5
different teams before it reaches
the customer.
This process can become more complex if the reseller is creating co-branded marketing in
conjunction with the vendor marketing team.
Fundamentally this is a problem, because at the heart of the relationship, as Matthew Bell,
Channel Manager at MOBI Wireless Management puts it, “The customer is the most important
aspect and without them, the partnership is pointless.”
Reseller Management and Sales
Disconnect
ChannelManagersmustalsocontendwiththe
disconnect between Partner Management
and Partner Sales People within the reseller
itself.
Although both groups work at the same
company and in the vendor’s eyes are
one entity, within the reseller they have
completely different drivers and therefore
require different approaches.
Partner Management is driven by
different incentives to those of
the partner reseller sales team

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Exploring the
channel disconnect
P.10
Vendors often strike deals with the
management or directors at a reseller. These
deals make great business sense and both
can appreciate the benefits. They just need
the reseller’s sales team to take this message
to market and find new customers.
And that’s where the process stops.
Partner Management is driven by different
incentives to those of the partner reseller
sales team. The partner will have put in
place a reseller compensation model that
drives sales teams to reach certain targets,
but that doesn’t mean the targets include
the vendor’s product portfolio.
The Partner Management team are
typically focused on growing margins (as
that creates higher dividends) and overall
business revenue growth. Rebate payments
from vendor sales may go straight into the
partner’s accounts and never touch the
reseller salesperson’s compensation.
Reseller sales teams are focused on
achieving their target, which also may
be made up of margin and/or revenue
targets. Kickbacks on selling products from
vendors doesn’t always translate to higher
commissions for the reseller sales person,
so they will be motivated to attain their
set targets; regardless of which vendor
supplies the product.
Very often, vendors develop one Key
Account Plan for partners, when in fact there
should be two. One for partner management
that focuses on overall business growth, PR,
marketing, and profitability, and another for
the reseller sales teams which focuses on
training, revenue growth and processes.
Balancing both teams means that decisions
agreed at Partner Management level can
actually translate down to the sales floor.
Very often, Partner Management is in the
same position as the Channel Manager –
they would like their sales teams to sell more
and they see how vendors could help in
providing a stream of products and services
to bolt on to their existing offering; however
both the Vendor Channel Managers and
Partner Management cannot make that
sales increase happen alone.
Demonstrating to Partner Management that
there is a clear path provided by the vendor
for sales enablement, remuneration and
sales support to aid the reseller sales teams,
ensures that there is a firm next step after
a channel contract is put in place – rather
than Partner Management assuming that
the vendor is responsible for taking the
partner forward and the vendor expecting
the partner to go away and put their own
plan in place.
vendors develop one Key Account Plan
for partners, when in fact there should
be two: one for partner management
and one for partner sales reps
experts are now advocating the idea
of creating technical engineer
led incentives and engagement
propositions between vendor and
reseller

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Exploring the
channel disconnect
P.11
This is why vendors create incentive
programs aimed directly at the reseller
sales person. However, these programmes
can sometimes be associated with units sold
rather than revenue figures, so the result is
a sales force driven to sell product numbers
whilst the vendor wants to drive highly
profitable, strategic deals over the long term.
Conversely, if the reseller is a strategic
supplier who engages with their customers
to find the correct solution for the client,
an incentive program that drives them to
sell a certain number of units is unlikely
to impact on their behaviour. Their focus
is on winning the deal, and that involves
providing a superior service to the client.
It does not depend on selling more units
of a product purely because of a vendor’s
current marketing campaign. Furthermore,
the values associated with these unit sales
incentives are often low and become a “nice-
to-have” rather than a “musthave”. This can
sometimes create strained relationships
between the reseller and vendor as it puts
pressure onto a reseller who may be doing
all they can to grow business, yet the results
are unsatisfactory for the vendor.
Vendors often only engage at one level
within a partner account (usually where they
have the most success). However, without a
joined up approach, the outcomes are never
delivered. Engage with management alone
and the selling is never done, or engage
with the sales teams and management
will not have put in place the processes to
make selling possible.
Whilst engaging at both a management
and sales level is a safe place to start, some
experts are now advocating the idea of
creating technical engineer led incentives
and engagement propositions between
vendor and reseller. “A lot of time, sales
engineers at resellers are at the fore front
of engagements with customers, so we
need to look at what can be done for them”,
comments Gus Safadi of KAINOS Channel.
incentives can sometimes drive
the opposite behaviour that the
vendor is trying to achieve
Partner compensation disconnect
There exists a partner compensation
disconnect within many channel programs,
which reduces the efficacy of incentives.
Vendors often make agreements on partner
compensation at a board level between
vendor and reseller management teams, yet
these incentives may never trickle down to
sales teams who are driving product sales. To
attempt to compensate for this disconnect,
many vendors also introduce incentive
programs that reward sales teams, yet the
rewards are often so low that sales teams
ignore them completely, or the incentives
are earned in such a way that makes selling
what the vendor wants contradictive to the
original incentive.
For instance, vendors often state that they
want strategic, multi-year, multimillion dollar
sales yet they reward reseller sales people
on how many components they have sold
in a given month. This drives the opposite
behaviour that the vendor is trying to
achieve.

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Exploring the
channel disconnect
P.12
The vendor disconnect
Vendors are struggling with understanding
how to effectively engage with their channel
partners. In recent years, traditional resellers
have morphed into a variety of business
models; offering cloud services, specialist
integration services or software-as-a-
service solutions, to name just a few. This
has meant that traditional approaches to
partner management does not work with
a large majority of resellers, however many
vendor programs have remained the same,
creating a vendor disconnect.
• Vendors do not have plans in place to
engage effectively with new models
of resellers (i.e. MSPs, Cloud Service
Providers, SIs, ISVs.) Many resellers now
offer a variety of these services in-house,
rather than being solely a transactional
reseller therefore the mix of reseller
types is changing.
• Resellersareincreasinglyofferingservices
that encroach on vendor offerings in
a bid to differentiate themselves in a
competitive, and declining traditional
reseller market.
• Vendors want strategic deals generated
and delivered by partners, however they
incentivise resellers based on short-term
product sales goals.
• Incentives are focused purely on revenue
generation (i.e. not onboarding, training,
prospecting, engagements) – however
making the sale is the last step in the
customer engagement process.
• Vendors market the idea of “partnerships”
with their resellers but then engage,
lapse, engage, and lapse in their partner
onboarding and management process.
Partners often have multiple different
Account Managers at the vendor over
the course of a 2 year period creating a
degradation in the strength and longevity
of relationships.
• Vendors want to work hand in hand
with resellers but competing teams
within vendors often circumvent the
channel process and engage directly
with customers despite channel teams
already being engaged. Even if this is only
true in just a handful of cases, it quickly
impacts on resellers’ distrust of engaging
early on with vendors on significant
customer opportunities. Research from
Ruby Newell-Legner, “Understanding
Customers”, estimates that it takes 12
positive experiences to make up for one
unresolved negative experience.
• Vendors themselves do not trust a large
majority of their resellers and therefore do
not share critical customer information
with them and vice versa.
• Vendors may think that they want
resellers to be skilled up and autonomous
in their dealings with clients, however
vendor sales teams often get involved in
customerssalesanddemandmicroscopic
detail on customer projects in order to
‘check up’ on the reseller’s activities.
resellers are increasingly
offering services that
encroach on vendor offerings
Vendors must therefore critically assess the
behaviours they want to encourage within
their partner base and analyse whether their
current actions encourage or discourage
those behaviours (i.e. incentives based on
product units/revenue).

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Exploring the
channel disconnect
P.13
The enterprise and SMB disconnect
Channel Managers must also look at their
marketing practices, to take enterprise
vendor marketing to SMB partner marketing.
Not all partners focus only on SMB
customers, but many are SMB organisations
themselves, and many of their customers
are too. The marketing created by vendors
is predominantly enterprise focused – with
a bias towards promoting solutions costing
multi-millions of dollars despite the average
reseller deal being much lower. Content must
be readjusted to suit the partner’s customer
base.
Some vendors create specialised “SMB
campaigns”, however the SMBs they
are targetting probably does not even
identify themselves as an SMB; they define
themselves as the industry they work in (legal
or financial, for instance) or as the service
they deliver (i.e. marketing services), rather
than “an SMB company”. More awareness of
the budgets, outlook and challenges faced
by your resellers’ customers would ensure
your marketing campaign is better equipped
for success.
marketing created by
vendors is predominantly
enterprise focused

Recommendations for
Addressing the
Channel Disconnect

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Recommendations for Addressing
the Channel Disconnect
P.15
What is preventing Channel Mana-
gers from reaching their objectives?
The key objectives of a Vendor Channel
Manager appear straightforward, however
there a number of factors that prevent
vendor channel management from having
a positive impact on partner revenues and
sales. It is worth noting these key areas as
we often forget them in day to day activity.
Firstly, as channel programs grow, it
becomes very difficult for vendors to
dedicate sufficient time to each reseller.
Early stage channel programs are often very
successful as lots of time is dedicated to
enabling those first few resellers; providing
them with heightened support, lots of onsite
help and more flexibility over pricing.
As the channel program matures and more
resellers are added, it is unsustainable for
Partner Account Managers to dedicate the
same level of time to individual accounts,
and therefore the high standards slip
and the results are less dramatic. It is not
possible for each partner to have months
of dedicated channel enablement services
from the vendor, however putting in place
a standard approach to onboarding – that
aligns to the partner’s needs and not just
the vendors, will enable a systematic and
consistent approach to channel onboarding.
Whilst the majority of technology vendors
may have an official approach to channel
management, the approach to account
management often varies between Partner
Account Managers. The initial stages of
onboarding are usually very formal as
legal and contractual details are finalised,
however the various stages of enablement,
training, skill gap awareness and customer
engagement support usually depend upon
the individual resellers and vendor account
managers.
as channel programs grow,
it becomes very difficult for
vendors to dedicate sufficient
time to each reseller
Many channel programs are now bloated
and contain a proportion of resellers that
do not fit the ideal requirements of the
vendor (i.e. 80% of revenue will come from
20% of partners) so channel teams should
critically assess their partner base and make
cuts where needed, to prevent more time
and resources being wasted, by both the
reseller and the vendor. This will not be an
easy process and will cause upset among a
number of resellers, but if the opportunity
with the reseller doesn’t exist and sufficient
time and resources have been deployed into
the reseller with no effect then it is time for
the vendor to move on. This is important,
otherwise it takes away time from your most
productive partners. The reason many of
these resellers stay on the vendor’s ‘books’
is often due to two reasons:
• The vendor does not want to show a
decline in achievements against targets
(whether that’s revenues or number
of channel partners who they transact
with).
• The vendor account teams change
regularly so partners are just migrated
to new vendor account managers rather
than being assessed as a good fit or not.

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P.16
Channel onboarding
Channel Managers must look at how they
can reduce the time it takes to get resellers
onboarded and enabled to sell solutions. The
quicker this can be completed from initial
vendor and reseller engagement through
to first sale, the lower the cost associated
with future customer opportunities will
be. Channel Managers should be looking
for ways to ensure partners are ready to
sell, through sales enablement activities,
joint sales planning and customer profiling
initiatives. Having a company standardised
model of enabling reseller teams is the best
method to ensure consistency across the
vendor’s Partner Account Management
team, and should ideally mirror the processes
of the vendor’s own sales teams.
Improving the quality of vendor
Partner Account Managers
Channel Managers are trying to ‘push’ a
message from their own internal marketing
and product strategy teams, to the vendor
Partner Account Managers. This is where
the difficulty starts. The Vendor Partner
Account Manager then has to take that
message, and pass it on to the Reseller’s
Vendor Manager or channel sales team and
make the message so compelling and clear
that reseller salespeople take it out to their
end customers with enthusiasm.
This process is difficult to manage and
guarantee consistent sales message delivery
and, therefore, results are often unsuccessful.
In order for sales messaging to move through
the various ‘barriers’, the proposition has to
be instantly simple to understand, incredibly
compelling or already in the awareness of
end users who will ultimately be purchasing
the solution.
The trouble with enterprise technology is
that propositions are often not ‘instantly
simple to understand’. Technology so-
lutions are regularly reiterations or newer
versions of older, complex technology or if
the solution is truly new to the market, then
its use case and value is not already known
by customers who will need to be educated
by the vendor and/or reseller. Let’s consider
the technology of blade servers, introduced
to the market within the last decade. When
blade servers were introduced, vendors had
to educate the market about what blade
servers were, why they were different and
superior to traditional services and use cases
for customers. This isn’t a simple message
that will flow through vendor channel teams
and resellers to customers intact.
Secondly, vendors believe that their latest
product launch is ‘incredibly compelling’,
but in reality, it fails to spark the interest of
resellers and customers to the same degree.
What may seem an ‘incredibly compelling’
solution within the confines of one vendor, is
probably not so compelling when compared
to all of the different products across the
range of vendors that a channel partner
engages with.
Channel Managers should be
looking for ways to ensure
partners are ready to sell
the trouble with enterprise
technology is that propositions
are often not ‘instantly simple
to understand’

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P.17
Therefore Channel Managers have to
recognise the reality of where their product
portfolio will sit within the reseller, and
develop a highly skilled team of Partner
Account Managers at the vendor level, who
can take a clear and compelling message out
to resellers and continue to work alongside
the resellers to guide the delivery of the
message to end customers.
In summary, the first step is improving the
quality of the Partner Account. Manager
(PAM) role at the vendor, as PAMs will be key
in taking out sales and strategy messaging
to reseller teams; as they are the last link in
the process before the solution moves over
to the reseller to sell.
Improving the quality of reseller
sales teams
Once sales messaging comes to the
reseller, it is up to the reseller sales teams
to communicate that messaging to end
customers. The sales messaging may
reach the reseller intact, but if the reseller
teams lack the skills to start compelling
conversations with customers, then the plan
falls apart very quickly.
The Vendor Channel Manager must therefore
look at how they can affect change across
the skill set of reseller sales teams in order to
make the sales process as smooth as possible
and heighten the chances of success.
Working alongside partner management
to develop sales skills programs within
resellers helps reseller sales teams increase
the effectiveness of their customer conver-
sations and sales processes. However,
vendor channel management often focus on
training which is product related rather than
generic sales skill focused.
Importantly, skills need to be developed
across general sales activities such as
lead generation and presenting, account
management, sales pipeline best practice
and customer service handling.
Increasing the profitability of
reseller deals
Sales teams who are left to their own devices
and measured on revenue attainment alone
will drive down margin levels in a bid to
drive sales numbers. When a sale becomes
difficult or a customer stalls their decision,
regardless of other underlying issues, sales
people will tend to blame pricing. Channel
Managers must be able to control this at a
macro level, by giving channel sales teams
the tools and skillset they need to bring
customer conversations up to a strategic
level where objections about price can
be handled effectively. Implementing a
thorough process to review margin levels
and regularly investigate the reasons behind
falls in margin in particular deals (through
win/loss analyses), will stand the Channel
Manager in good stead for ensuring that
vendor margin does not become the first
victim in deal negotiations.
Data analytics can also help to dynamically
assess margin position in real-time across
deals, partners, product categories and
customer segments.

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P.18
Reducing the length and speed of
sales cycles
Profitability is not just affected by price
discounting; it is also impacted by the
amount of resources that a vendor has to
direct towards the reseller to assist with
a sale. Being able to reduce the average
sales cycle length through better training
and standardised processes means that
vendor resources can be controlled more
effectively whilst helping the partner to
reach their revenue targets quicker. Having
a methodical approach in place that is
consistent across the company (not just
across individual Partner Account Managers)
for managing partner pipeline will be critical
for reducing vendor costs. This will involve
looking for strategies to reduce or streamline
vendor engagement in sales activities when
reviewing partner sales opportunities.
Increasing the quality of reseller
deals and leads
In order for the Channel Manager to reach
the objectives we set out earlier, it is key
for a standard to be set on the quality of
deals and leads coming from their channel.
This is important as a less than stringent
approach to qualifying leads and passing on
poor quality opportunities results in many
hours of wasted time on the parts of both
the vendor and also the partner. Putting
a system in place early on for ascertaining
what is a ‘good fit’ and what isn’t a ‘good
fit’ will pay dividends in the long run as CRM
systems quickly fill up with unqualified, low
quality opportunities.
Training programs should be put in place
early on, in place of product training, to help
resellersalesteamsidentifywhatisaqualified
lead in the eyes of the vendor. Vendors often
invest thousands of pounds, if not millions,
of expert sales training each year for their
sales forces and resellers are usually not in
a position to replicate this scale of funding,
so adherence to standard processes may
vary between resellers which can therefore
impact on the deal qualification process.
Additionally, vendors must effectively
qualify resellers in the first place to ensure
they are selecting resellers with the ability,
business model and approach required to
sell to a vendor’s target customers. For
instance, a mission critical solution focused
reseller may not be a good fit for a volume
components vendor, and the quality and fit
of leads generated is likely to be negative.
vendors must effectively qualify
resellers in the first place to ensure
they are selecting resellers with
the ability, business model and
approach required to sell to a
vendor’s target customers
Better reach customers with
messaging through partners
Developing a compelling sales message that
resonates with customers is difficult enough,
never mind when that message has to first
go through a separate tier; i.e. the partner,
before it reaches the customer.
Channel Managers struggle with sales
enabling not only their own sales teams,
but also those of the reseller. The key to
success in this instance is ensuring that
sales messaging is as simple as possible, to
avoid key points being lost in translation and
interpreted in different ways. The second step

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P.19
is then ensuring that the message really is
compelling for each tier of the process. Does
this new product really make a difference to
your Partner Account Managers? How will
it help them to grow revenue personally?
Does this product also make a difference
to reseller teams – will they see the value in
going out and speaking to customers about
it?
vendors often overestimate
the level of relationship that
resellers have with customers
Showing reseller teams how customers
would use the product and the difference
it will make to customers’ businesses will
resonate more than training them in product
features. The reseller is essentially looking
for a product or service that his or her
customer is keen to buy – they don’t want to
risk introducing a product into the customer
account that will require lots of uphill selling
and convincing, as it could impact on their
relationship with the customer. They need
to be sure that they are delivering something
compelling and valuable to the customer.
Vendors often overestimate the level
of relationship that resellers have with
customers, and therefore push reseller sales
teams to drive vendor messaging out to
customers. Resellers will look to protect the
relationship they have with their customer
and push back against further product
messaging.
In an age where traditional long term supplier
and customer relationships are breaking
down in favour of buyers doing more of the
investigative work themselves, the strength
of the relationships between resellers and
customers are often not as strong as they
may have been pre-internet days when you
had a trusted supplier and couldn’t easily
retrieve quotes. Resellers understand that
in a pure transactional product sale, they are
on shaky ground if they start to ‘push’ the
customer in a different direction, based on
vendor pressure. In complex sales, where
the reseller is a trusted advisor, there is more
room for offering guidance and direction to
the client.
Demonstrating Vendor Value
Staying on the topic of competition, Channel
Managers must also be able to demonstrate
their vendor’s value to a partner. Many
vendors struggle to be valued and
prioritised by resellers, especially resellers
that are selling wide ranges of products from
many different vendors, a scenario which is
not uncommon in the technology channel
space.
Reseller sales people must not only get
skilled up on their own company’s offerings,
solutions and service wraparounds, but also
be trained in understanding the products
and services offered by each vendor – with
enough knowledge on each topic to be able
to have useful conversations with customers
and aid them in choosing the correct
technology solution.
As a Channel Manager, the only way that
reseller sales teams will sell your product is if
the reseller genuinely values and priorities
your vendor above other suppliers.
the only way that reseller sales
teams will sell your product is if
the reseller genuinely values and
priorities your vendor above their
other suppliers

www.thesalesway.com
P.20
Resellerswillnaturallymovetowardsselling
the simplest product. This isn’t because
they can’t understand your product; it’s
because it makes the most business sense.
If they can make X amount of dollars selling
Product A and it takes them 6 months to
get trained up on the solution, whereas they
can make the same amount of money selling
Product B after a week, then it’s obvious
they will choose Product B.
If Product B’s company is easy to get hold
of by email or phone when they have a
customer request, then they will sell Product
B in future.
If Product B has a simplified ordering system
and an incentive program that rewards
to such a degree that it is compelling
and behaviour-changing, then reseller
sales teams are going to choose that
particular solution time and time again for
their customer. They are familiar with the
experience, they know the process, they
understand the product and they can bet on
the service quality being consistent.
Vendor and Reseller Collaboration
Channel Managers must also look at how
to increase the opportunity for vendor and
partner teams to work together. Partner
Account Managers are responsible for
engaging with partners, but for also bringing
the partner into the wider vendor ecosystem
and helping to bridge relationships between
different reseller contacts within the vendor.
It can be difficult for established vendor
programs to change behaviours entrenched
over many decades, where trust has eroded
and there is a general suspicion surrounding
vendors being involved in reseller deals.
Channel Managers must work hard to
encourage more holistic working programs
between their vendor teams and reseller
teams in order to foster a culture of reliance
between the vendor sales and reseller sales
people. Many times, initiatives created to
encourage teams to work together results in
only one side providing customer intelligence
and information to the other – so it is not
a win/win situation. Demand generation
programmes are specific product launches
originate within the vendor or the partner
and so one or the other develops a sense
of ownership over customers. Driving a
program that truly gives vendor teams and
partners the opportunity to develop joint
leads and participate in joint sales activities
(such as joint meetings and joint calls)
will help to encourage future cooperative
working practices.
Drawing up a list of vendor and partner
resources that can be shared is a useful
place to start. By ‘resources’ we mean more
than just marketing collateral and product
information. Resources could include
access to demonstration products, event
space, workshops or technical resource.
It could even be informal training offered
by the vendor, or access to city centre
meeting rooms for the partner to meet with
clients. These informal resources are often
what make the difference between a good
working partnership and a failing partner
program.
drawing up a list of vendor
and partner resources that
can be shared is a useful
place to start

www.thesalesway.com
P.21
Timescales for deals often causes conflict
between vendors and channel partners
as vendors usually work to quarterly, six
monthly or annual plans, and there is a
regular need to influence the sales cycle and
bring deals forward to drive results. Channel
Managers often do not have the leverage
to significantly drive reseller sales teams to
push for deals to come in sooner.
Often, the leverages offered by the vendor
are low-value, such as a nominal further
discount that doesn’t really impact the
client or the reseller greatly enough to spark
a behavioural change. In other cases, the
vendor sometimes tries to exert pressure on
the relationship. The problem with the stick
approach in this instance is that the vendor-
partner relationship is often less valuable
to the reseller than the vendor as they can
swap out products and put a like for like
vendor product in. Where the customer has
specified a specific vendor, then the vendor
has more control to push for a shorter sales
cycle.
vendors often fail to fully
appreciate how their resellers
make money
ImprovingChannelBusinessAcumen
Vendors often conduct detailed customer
analyses, but how often do they follow
the same process for partners? Having
a detailed key account plan for partners,
in the same way as would be done for
strategic customers, is crucial for ensuring
that milestones and objectives are reached.
A2014ChannelSalesCompetencyStudyfrom
Miller Heiman highlighted the importance
of vendors understanding their channel
partners’ business models and having a
high degree of ‘channel business acumen’.
Very often, vendors (more specifically their
channel teams) fail to fully appreciate how
their resellers make money and how their
channel partners measure success.
How long does your Channel Team spend
investigating resellers’ strategic objectives
before engaging? Do they dedicate time
to fully understanding their resellers in the
same way that end user account managers
seek to understand their key accounts and
look at industry changes, challenges and
their subsequent business initiatives?
Different resellers have different drivers
depending on their model. A hardware
vendor selling into a software-as-a-service
company will need to vary its approach
compared to selling into a pure hardware
resell partner. Both models have vastly
different compensation schemes, revenue
models and business objectives. Failure to
appreciate how a product is being packaged,
sold and compensated within a particular
partner, results in further disconnect
between the partner and vendor.
Very often, the vendor’s product may be
packaged into a larger solution by the
partner which is then sold out to customers.
The end customer may not see the individual
vendors’ products within the overall solution,
and the purchase of that particular solution
may have very different drivers to those of
the individual products.
If we look at servers and point-of-sale (till
different resellers have
different drivers depending on
their model

www.thesalesway.com
P.22
checkout systems) solutions as an example,
then we can see how partner packaging
of a product affects the associated sales
and marketing activities. The point-of-
sale solution may be installed into a store,
and require a server to run the software
underneath the payment processing
application. The customer (the store or
retailer), purchases a point-of-sale system
because they need to upgrade their old
system, offer new services to clients, or
because they are opening a new store. The
server manufacturer usually sells a server to
replace ageing servers and provide a more
productive, faster and economic compute
service or if the customer has a new
application they need to deploy.
The server vendor could impose all kinds
of targets and offer incentives to the point-
of-sale reseller to drive more server sales,
but this would be in vain. The point-of-sale
vendor only requires a server when they
sell their point-of-sale (POS) application.
Therefore it would be much more useful for
both businesses, if the vendor helped the
POS reseller to market their POS products,
in an effort to sell more servers. A failure
to understand how the POS reseller goes
to market, interacts with customers and
engages in sales cycles would result in an
unhappy vendor who can’t understand
why their marketing funding for server
technology or their server demo offers were
not driving higher revenues.
Channel Managers must therefore instigate
a system of partner business analysis to
ensure their teams are regularly keeping
up to date with potential threats to their
position, new opportunities and business
changes in the reseller base. Many vendors
do not train their partner teams in channel
business acumen, and so many untrained
Partner Business Managers apply the same
principles of enterprise selling or account
management to their role; functions which do
not fully take into account the complexities
of the channel partner relationship.
Channel Managers must
therefore instigate a system of
partner business analysis

Rewarding the ‘correct’ behaviour
to address the compensation
disconnect
Do vendors always reward the behaviour
they want? Or do they inadvertently create
incentive programs that reward low value
products?
Many vendors say they want strategic, long
term customer partnerships, when in fact
they tend to reward purely on product sales
figures alone. Channel Managers must look
at how they can better incentivise reseller
teams to deliver against a set of sales
behaviours that they want to encourage,
such as:
www.thesalesway.com
P.23
• Completing sales skills training based
on vendor solutions
• Increasing generic sales and account
management skills
• Developing strategic customer
conversations
• Uncovering business opportunities (i.e.
that are business led, rather than IT led)
• Consistently increasing the vendor
share of wallet within each customer
• Creating thought leadership content
and marketing around vendor products
and use cases
• Meeting with business and C-level
contacts at the customer
These behaviours may be harder to measure
on a spreadsheet but it will help to improve
the current disconnect where channel
teams are rewarded based on product
unit sales, but are then discouraged from
selling just ‘products’.

www.thesalesway.com SUMMARY
P.25
In summary, what are our
10 recommendations
for better channel management?
Create something new - combine vendor and partner solutions and skills to
produce a differentiated, specialised solution.
Drive behaviours alongside revenue - iincentivise for training, marketing and
engaging.
Improve skills, not just product knowledge - funnel management, sales skills,
industry understanding.
Reimagine the partner portal - how can it be used to drive more value for the
reseller and be seen as the go-to place in customer engagements?
Drive specialised and targeted marketing and sales initiatives - account
based marketing and different marketing approaches for partners, customers,
industries.
Transform your program to be flexible enough to accommodate new partner
models - CSPs, MSPs, SIs, ISVs.
Focus on collective-trust - info-sharing, collaborative marketing, zip mentality
at all levels and roles.
Analyse partners to drive channel business acumen - understand business
drivers, revenue models, priorities, motivators, initiatives and goals.
Drive loyalty through relevance - give resellers the ability to access the
latest skills and industry thinking, process, business transformation support,
processes, methodologies, thought leadership and new marketing initiatives -
all through the vendor.
Standardise and systemise your Partner Account Management engagement
model - to guard against disruption and lapses in engagement.

FIND OUT MORE
© The Sales Way 2016
Online: http://www.thesalesway.com
Twitter: @TheSalesWay
LinkedIn: linkedin.com/company/the-sales-way
Tel: 0161 818 8600

Exploring the Channel Disconnect

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