The channel has always been an important route to market in the tech sector and will continue to be so. However, the tech channel and the relationships between vendors, distributors and partners is becoming increasingly complex, and it would appear that channel marketing, which is at the heart of this dynamic, has not been keeping up with developments.
Why is channel marketing so important?
Channel partners allow you to grow and scale quickly by driving sales without you having to build your own internal sales function. They can also help extend your reach into new markets, if they have specific expertise and connections in different regions, without you incurring the expense and enduring the complexity of entering new regions yourself. In addition, in the tech sector, many products interact and integrate with each other or offer complementary services, so vendor and partner collaboration is very useful.
Channel marketing needs a shake-up
The channel remains very product-orientated. Resellers still rely on traditional models of revenue generation, which are aligned to market development funds (MDF) to drive channel marketing. This hasn’t changed in 25 years and, in the view of Tom Perry, Sherpa Marketing’s CEO, is inherently flawed.
MDF strategies are often accompanied by a list of prescriptive activities that need to be completed in order for funding to be released. Coupled with a disproportionately strong focus on lead generation, and emphasis on quantity over quality, the channel marketing landscape needs some attention.
The current channel marketing model is often focused on the short-term and doesn’t factor in that buying cycles can take up to a year and do not necessarily align to quarterly MDF cycles. It creates scenarios where the partner is reactive and is sometimes trying to identify where to spend next quarter’s MDF, or worse, MDF left over from the current quarter.
The tech sector’s rate of change
B2B marketing has developed rapidly over the past decade but channel marketing approaches have remained fairly traditional: vendors provide money, partners are remunerated in conventional ways, yet measurement and success are often a little ambiguous.
The lack of change is perhaps surprising given the rapid development in the way products and services are delivered has advanced in the tech sector during the same period – from physical hardware and products to hugely complex IT services provided over the internet.
However, over the past three years, Sherpa has witnessed a requirement in the market place as partners are slowly moving away from a focus on margin and volume towards providing enhanced services and customer support. This too has an impact on the market as partners that previously never competed now offer similar propositions.
A more strategic focus is required
Moving to more strategic marketing demands an altered mindset. By adapting the longevity of campaigns to align to buying cycles and creating reporting visibility, partners and vendors can really begin to understand the complex buyer journey and track leads back to the quarter in which they originated, in real time.
The way forward is a combination of defined and regular planning strategies, innovative marketing programmes, such as account-based marketing (ABM), and up-to-date channel activation platforms. ABM is relatively uncharted in the tech channel but is ideal to create a longer-term, customer-centric, value-driven approach, with benefits such as:
- Better processes and partner education leading to greater understanding of products and how to market them
- Opening up marketing and sales processes, giving all parties more visibility into the areas where sales enablement requires more focus
- Improved partner engagement
- Greater accountability of the partner when it comes to delivering results in return for vendor investment
But you cannot simply lift a direct ABM programme, put it in the channel and expect it to work! Whilst vendors bring the product, infrastructure and systems to the table, partners bring specialisations including verticals, access to new markets, innovation, market penetration and consultancy.
Embrace the potential!
Channel marketing has so much potential for innovation and, for enterprising B2B marketers, it’s a very easy win if you get it right. Working with an agency such as Sherpa, who specialise in channel marketing, provides any struggling vendor with the expertise to put their product or service in front of key decision-makers within relevant, targeted accounts.
Once your channel marketing strategy is in place and being properly implemented, you will be able to measure and track the success of a channel programme back to its source, from opportunity creation through to the revenue from closed business.
For more information or to discuss how Sherpa can help you with your channel marketing, please download the tech marketer's guide to channel marketing or get in touch:
- via email on letschat@sherpamarketing.co.uk
- by giving us a call on 01234 964000.
- or by clicking here.
Why not join us at one of our Channel Transformation events and hear how we plan to change the channel once and for all.
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