As the Channel Churns: The Battle for Routes to Market

High tech channels are restructuring due to the emergence and convergence of social, mobile, big data, and cloud based solutions. These forces are expected to cause a substantial churn in the channel. IDC predicts turnover of 25,000 to 50,000 infrastructure partners in North America by the end of 2013. This is a major wake up call for high tech channel marketers. Three years from now your channel community, the solutions they sell, and the most profitable routes to market will be very different than they are today. Vendors that see a net gain in channel capacity over this time frame will be the ones who diligently accomplish the following three objectives:

1. Redefine relationships: Vendors will need to be both more strategic and more tactical in support of their channel. The business planning process must incorporate strategic issues such as helping partners acquire new skills, building partner networks, funding acquisitions, and driving multi-vendor alliances into the channel.

At the tactical level, vendors need to help partners clearly understand how to best invest in their business. This requires compelling evidence of return on investment. For some partners the highest ROI will come from hiring more technical staff or achieving certifications. For others it may be hiring sales reps or doing more marketing. Partner engagement hangs in the balance and it is up to vendors to make the case for each and every partner.

2. Reposition programs: Channel marketers need to think of their marketing programs as solutions to partner business problems. Typically channel programs are marketed like products with the benefits presumed to be self-evident. Not so. Even the most elegantly packaged program offerings are not relevant to a partner until they understand what business objectives it is designed to achieve for them – Building awareness? Lead generation? Appointment setting? Customer loyalty/upsell? Vendors must reposition programs as solutions that are:

• Tied directly to partners' business goals 
• Designed as sustainable campaigns – not short term marketing hits 
• Easily linked to funding programs such as MDF, JDF, co-marketing, etc. 
• Provide execution support through portal capabilities, concierge services, and references to approved marketing services firms

3. Reskill for analytics:Data analytics will be the differentiating factor for the winners and losers in the battle for channel capacity. This will require staffing up on business analysts and capturing better marketing and sales data from partners. Vendors whose products or business models provide end customer touch points such as SaaS or hardware provisioning have a big advantage in this regard. Competitors need to seriously think about how they can incorporate end customer touch points into their offerings. The importance of this cannot be overstated - it closes the loop on the lead qualification, distribution, nurturing and sales cycles enabling continuous improvement to be applied to all of those critical functions.

Not all go to market models in high tech support end customer touch points for vendors. With this in mind, some of the new ways vendors are attempting to get closer to the data include:

• App level connectors between vendor partner relationship management (PRM) portals and partner CRM systems
• Requiring campaign and lead performance reporting as part of funding approval processes
• Enticing customer contact through SaaS, communities, incentive programs, etc.

Customers want their applications, infrastructure, platforms, and communications to work seamlessly with legacy solutions as well as with customers' multi-screen environments. They expect rapid deployment, mobile readiness, low cost, high availability, flexibility, and return on investment. These requirements can only be met if vendors restructure their offerings and their channels to bring a widening set of specialized technology and expertise together into standardized offerings customers can trust. For more on the future of high tech channel marketing, see: Best Practices in Channel Marketing, IDC #234367, April 2012.