As I was writing the obituary for my father, I realized I only knew him from one or two perspectives, but he was many things to many people. He was a son, a nephew, cousin, a grandson, a father, coach, teammate, friend, husband, grandfather, great-grandfather, salesperson, employee, retiree, and probably so much more. Everyone who knew him over his 83 years on this planet and 61 years of marriage experienced a different perspective.
The Channel is kind of like that. It is moored in its roots of Microsoft and Cisco servicing the small business, but there are so many different types of partners now that vendors will have different perspectives on the Channel.
Most people think of it as one Channel. It isn’t. Agent, VAR, Inter-Connect, ISV, systems integrator, MSP, MSSP, influencer, referral, affiliate – there are a number of business types that comprise the channel.
A majority of partners – probably 85% – are great at selling mass market. In other words, broadband, voice, Internet Access, POTS Replacement, cell phones. Replacement services that are well known quantities in the market. These services don’t really need an introduction. The demand was already there, which is important because the Channel does NOT create Demand; it merely supplies it.
If, as a vendor, your services need an introduction, an explanation, if your services aren’t in demand or are not for every business, well, then 85% of the channel isn’t going to work for you.
The vendors with a Brand – AT&T, Cisco, RingCentral, Microsoft – do well in the channel because there is Demand and product knowledge in the market. When you consider that Broadband was actually launched in the market by VC-backed companies (Covad, Northpoint and Rhythms), it is no wonder that all three went under. They had to build those networks AND create demand. hard to do both. Yet, today, 24 years after those 3 DSL pioneers blew through $1.7B, everyone knows what DSL was – and buys broadband either as 5G, 4G, DSL, cable modem or fiber.
SD-WAN, CCaaS, CX, UCaaS, CPaaS and so much more are unfamiliar terms to the Buyer. The only reason AI is known is due to science fiction movies and a $40B investment round. But most don’t know really what AI is or what it will do, mainly because of the hype cycle, fear cycle and sci-fi.
Vendors come to me about getting in the channel (and recently a few are thinking that I have talked myself out of a job). That isn’t what I was trying to do when I was trying to lay down realistic expectations for products that are made for Enterprise or are not a small business play.
If you are mass market, the channel is a great play. If you are not, then you need to be realistic about your strategy, your Target Audience, your Message, the time frame and the expense before you see the results. Not everyone wants to wait three years to see the faucet come on. Just ask Verizon, InterNAP, NEC and Office Depot. Two were out of the TSD based channel in 2 years frustrated and the other two were in and out of the channel a bunch because they didn’t like the results.
For Verizon, a $100B+ revenue company, or NEC, a $50B+ global company, if a product doesn’t hit $100M in revenue fast, it gets shuttered. Most companies are not multi-billion dollar companies. Most would be very happy with $10M in channel revenue, but the small vendor without a $1M annual budget for channel isn’t going to make $10M in channel sales.
Usually the small vendor has multiple stories to tell (multiple and diverse products) and an undefined target market. Usually the vendor has a non-simple explanation of what the product does. Usually the product is not a replacement of anything (like AI). Usually the product is not a band-aid or a torniquet for any kind of easily identified pain. (It is more like a mystery illness, like NaaS).
The issue with AI, CPaaS, and CX is that you need specialists to consultatively sell it. Luckily for CCaaS that there have been contact center experts for many years willing to take CCaaS and CX in to their portfolio. (Also, luckily Avaya, Mitel and a host of other vendors in that space have stepped on their own shoelaces and face-planted).
Much of the new technology entering the marketplace will require use cases, stories, explanations, proof of concept, trials, and a sales cycle longer than 6 months. That eliminates 85% of partners who do not want to sell in that manner. Many pundits think these partners are dying (and have been singing their funeral for 10 years), but there is still demand in the market and vendors want to supply that demand.
That leaves 15% of the channel partners who can consultative sell and/or do sell to large business. However, the vendor still has to find these partners, get their attention, tell their story, negotiate a partner agreement and get in their portfolio. THEN the partner has to tell their Customers about this vendor and then the sales cycle begins, which is longer than 6 months. SO it can be a year before a single sale hits the legal department.
When I explain this to vendors, they balk.
I have literally had 5 vendors tell me they needed sales in 90 days! Can you imagine? They would be lucky to ink one partner agreement in 90 days.
I am all about setting realistic expectations for clients. The other thing I do is help them with their story. That becomes a problem when they have marketing that doesn’t want any outside input, but marketing to channel is different than marketing to the market.
When you think of your message, think of it as one photo in a Gen Z’s iPhone 16. They take 50 photos or more a week and at any given time have over 2000 photos on their device. Now imagine a partner getting hit with messages from the 400 vendors who have entered the channel since 2020. Your message is just one photo on the whole device. It better be clear, memorable, and Remarkable.
Are you bothered by the number of ads with the GEICO gecko and the Liberty Mutual emu? Insurance companies do massive amounts of ads to hammer home a brand that is basically the same brand: we are cheaper and better. They need to repeat it often, because no one believes them. That repetition is creating branding. Most tech companies do NOT do this. They don’t Brand. They don’t educate and create demand.
Personal Injury lawyers have to advertise a lot to remain top of mind for when a accident victim has an accident. Then they have to answer the phone when the victim calls and assess the situation. Only about 1 in 6 calls result in a case.
Vendors without much marketing presence tend to do poorly in the channel, unless their product has great market fit.
There are a number of factors that will have an effect on the success of a partner program: product/market fit; pricing; compensation; partner support; messaging; marketing; target market; Buyer Persona.
Too many vendors don’t have enough marketing support to have identified Buyer Personas, Value Proposition and other foundational marketing elements that support a strong partner program.
Often for the vendor, the view of The Channel is as a cheaper sales effort, but it isn’t really. Recruiting partners, on-boarding them, supporting them, managing them, co-selling with them, paying them – this all requires vendor talent and budget. [You can read all this and more in my new book, Channel Myths on Amazon for Kindle and in paperback from Lulu.]
I can certainly help you figure this stuff out, map out a strategy, craft a message, design a Partner Profile and launch a partner program (or re-vamp a stale one). Just give me a call (813) 963-5884
“Most of the people who work at Yale don’t teach classes, and airlines have a very small percentage of pilots among their staff. We create organizations to deliver value, and we add complexity to coordinate and amplify the skilled work that people trade time or money for.” Seth Godin