Generating new business is the keystone for tech companies. Most large tech organizations sell primarily or completely through channel partners. In turn, the channel arm of a tech organization allocates significant resources to lead generation programs for channel partners.
Unfortunately many channel partners experience challenges generating leads in tandem with their technology partners.
Friction can be generated with these seemingly odd bedfellows: large tech organizations partner with small VARs to sell to large end user organizations.
Many obstacles and conflicting perspectives can push a VAR out of alignment with their technology partner and detract from channel lead generation efforts:
- Messaging Overload at the VAR – the message can be lost in the clutter of communications that a VAR may receive from numerous technology partners and their marketing partners;
- Retention vs. Acquisition – tech organizations want to acquire net new accounts and VARs want to sell more to existing accounts;
- Solutions vs. Products – tech organizations want a VAR to push their products while VARs want to sell broad solutions that may or may not encompass their partner’s product. Some tech organizations are comfortable with VARs leading with a solution sell, as long as a competitive solution is not sold;
- Data Privacy – VARs are concerned that their customer list will be shared with their competition. Some VARs will not participate in lead generation programs unless their list is held privately by a third-party and not shared with their tech partners;
- Conflict of Interest – A competitive install list is valuable to a tech organization. VARs object when a tech organization asks to use their customer list to cross-sell a competitive solution from that tech organization;
- Complexity – With constrained resources, the planning and execution of multi-touch lead generation program can exceed a VAR’s capabilities. The documentation and reporting requirements from multiple tech partners on multiple programs creates further complexity;
- Carpet Bombing yields Low Returns – Shotgun marketing approaches to a broad market that may be unfamiliar with the tech organization, the VAR or the solution yield low returns;
- Timing Mismatch – Marketing objectives may not align when a VAR is at a different point in their fiscal year vs. their tech partner. Sales cycles may not align to the quarterly focus that tech organizations dictates with their marketing programs;
- Insufficient Funding for the VAR – a low level of funding may not provide enough dollars for a lead generation program;
- Narrow Target Market – the VAR who targets a narrow list of accounts either geographically, vertically or by size may not provide a large enough target to justify and fund a marketing program.
Channel Harmony’ is an Oxymoron. I know from working for companies on both sides of the channel. A tightly-worded reseller agreement helps both parties avoid conflicts. Unfortunately, much of the friction occurs outside of what is covered in a black-and-white agreement.
One jumble of conflicts occurs when manufacturers and developers want long-term customers who will buy suites of products and services over time, whereas resellers don’t want to drag through long sales cycles, opting instead to close “point projects” that will keep the lights on for another quarter. And it’s difficult to maintain a united front for prospects who want a “bake off” between the three-or-so most qualified resellers–which they ask the manufacturer to recommend.
No matter which side of the sales equation I’ve managed, every business day requires walking a fine line. Oh, before I forget–there’s no such thing as ‘over-communicating.’
Hi Andrew,
Well-said….with such potential for conflict, communication is critical.
My post was an attempt to identify and allow both parties to proactively address points of friction.
Thanks for sharing your comments.
Cheers,
Robert