Channel partners have been a pivotal part of most IT businesses and play an integral role in giving a clear picture of the market place. This noticeable trend of alliances with channel partners has picked pace in India in the last decade. Though China pioneered this approach two decades ago, in Asia in view of the slew of products developed, India has certainly fast realized the importance of channel partners. For any big or small IT product company, marketing its products and expanding the business through channel partners forms the core of the business model.
THE ‘GO-TO-MARKET’ STRATEGY
According to a research report, an estimated 70% of companies earn most of their revenue through indirect channels, ie, from dealers, agents, VARs, and distributors. In most companies, the ‘go-to-market’ strategy is strongly built around the combined effort of both the partners in marketing the brand as well as increasing the sales. Hence it becomes very important to keep the channel partners motivated and ensure that they have the resources to grow their own business and help the company grow at the same time. For example, initiatives like rewards and recognitions, partner on boarding training, technology training et al not only keep the channel partners abreast of what is happening and how to tap the market place better, but also help them to feel confident and understand the company better.
Partners are an interesting lot. Fiercely independent, incredibly resourceful and eternally adaptable, they survive and thrive based upon the strength of the relationships they forge both with their customers, and the OEMs they do business with. The vendors must appreciate that partners have strong links, often local presence or industry specialty, with their customers. Partners deliver a broad range of products and services, often from other complementary vendors and across multiple client lines of business. And partners value their customers as deeply as OEM’s do.
Partners must recognize that the vendor is sharing its most valuable asset—the OEM’s brand—with them. Partners must be willing to gain the competency required to successfully represent the OEM’s products and services—including accurate pre-sales positioning, design and configuration, implementation and after-sales support. After all, if a product doesn’t perform as promised— it’s the vendor’s logo that will be visible to the user.
THE ROLE OF CHANNEL PARTNER
With the advent of technologies like cloud, mobility and a lot more, the role of channel partners is also evolving. It is important hence for the OEM’s/vendors to evolve one’s partner program to meet the needs of a rapidly changing partner eco-structure. Channel partners know that cloud computing is changing their position in the demand chain—yet they still aren’t receiving the help or guidance they need from OEM’s. To enable partner success, OEM’s need to offer business model transformation assistance and resources to develop customized, scalable cloud solutions, while driving ongoing revenue for long-term business sustainability. OEM’s should allocate resources to help partners address their transforming eco-structure, in addition to technical sales and marketing support. Transitioning partners to the cloud computing business model will require ‘financial engineering’ on the part of OEM’s. Partners that commit to the transformation will experience a significant gap in revenues and cash flow when transitioning from a transactional to a subscription or pay-by-use model.
Another interesting way to move the channel partners to cloud is partner portal. Partner portals (Web tool) are an opportunity for a company to differentiate themselves from competitors. It is vital that such portal be easy-to-use, targeted, relevant and up-to-date. Think of your partner portal as the ‘gateway’ to your partner community and relationship—you always want to put your best foot forward, right? Partners don’t have time to wade through pages of irrelevant data or content. They do, however respond favourably to targeted, relevant information presented in an engaging environment that makes it easy for them to conduct business.
THE RIGHT MESSAGE
By getting into alliances with channel partners, IT firms can focus on their core competency rather than investing energy, time, and money to reach the end-customer by forming its own marketing team. So to succeed in a product/service based market ecosystem, it is very important to firstly choose the right kind of partner and then train and equip the partner to do business. It is also very important to cultivate good relations with them and understand their needs and demands and create programs and activities to help them throughout.
The author is Executive Director, Technology, Channels & International Distributor Operations, Xerox India