After attending and speaking at dozens of channel partner meetings and hundreds of reseller workshops I’ve had opportunity to interview and speak with many business owners and sales people on the topic of value – just how much value is there in attending these events. Listen to what I’ve learned about channels, resellers, distributors, and vendors…
Lots of channel talk out there…Juniper is revamping reseller training online to address complaints from their channel, Fortinet coming out with an MSSP program, probably in response to the SMB and midmarket growth in managed services offerings – of course all of the AV companies out there are doing this or headed that way, and numerous comments on the CRN forums concerning whether partners should be exclusive or committed to one vendor in a given area. The problem with just about all of the programs out there is this: Vendors are not always addressing the root problem – resellers need more GP (Gross Profit). This won’t come through install services, and increasing product sales doesn’t necessarily mean more GP either. Sales must come earlier in the sales cycle with shorter sales cycles driven by high touch solutions, consulting, and low cost of sales in terms of people resources. So what do channel managers need to do?
Social networking is a great marketing tool; no doubt. Marketing events are equally as good…both require precise execution. Tomorrow I’ll be speaking to 40 decision makers in Richmond VA. These are largely new prospects – how did we get this audience and what will make tomorrow a success?
Old school marketing programs are out – people want education, knowledge, and understanding. Success means making wise decisions in the coming months and quarters, and that means they need sound advice. Be the best one to give it and you’ll find the relationships will come.
© David Stelzl, 2010
Resellers, VARs, Solution Providers, and Channel Managers – this is an important lesson on the profitability of services. While your (or your partner’s) services may be very profitable, they may not be as profitable as they seem. As the market has commoditized, I’m seeing far more short product/install contracts…less consultative, long term engagements. This is particularly true in the mid and smaller markets. What is the result.
Listen and see how calculations on profit, gross profit, and net profit are sometimes confusing. To the sales rep, all GP is good – you get paid, right? To the person with P&L responsibility, the numbers don’t always add up…I frequently run into people who initially think they have strong services margin. When I show them how to calculate it, we find profits to be much lower apart from the product sales.
© David Stelzl, 2010
What happens when the people in charge don’t get it? The value solution providers (VARs, Resellers, Consultants, etc.) bring to their clients has more to do with the business advantage they bring and less to do with the features…yet I am hearing the disturbing message this is being sacrificed in the name of budget constraints. Here is what I am hearing from the field:
1. When distributors bring together their clients (generally mid market and SMB resellers), the attendees need to hear from industry experts, receive business building strategies, and be challenged by new ideas. Thousands will be spent on the travel, accommodations, and food, not to mention opportunity cost. Why would those in charge allow free speakers from the manufacturer to dominate these sessions with product information? It’s all available online and it’s all commodity stuff…I’ve heard numerous comments this year along the lines of, “waste of time.”
2. When “Vendor” sponsored training is forced on the reseller (forced may be a strong word – but this is the way I receive the message from resellers I work with), why is it so product centric with “speeds and feeds”, when what is needed is a message that resonates with senior managers, negotiation skills, and marketing insight. It’s rare to find people making these decisions who understand the reseller business, financial model, and competitive pressures, so bring in someone who knows.
3. I recently learned of a major reseller who went through several days of sales training with HP specifically on building their message. After attending my Mastering Board Room Presentations (where we were going to focus on delivering their new message) they told me, “Our message stinks.”
4. When marketing dollars are available (which they always are if you sell enough product), why do the people managing these budgets insist that it be spent on golf outings, call blitzes, and product specials? These programs are proven failures…I’m told by sales people and VAR business owners, “We’d gladly sacrifice the outings for outstanding content and training.”
5. “Stop telling me there’s no money available. Instead, give me the criteria for getting the money I see others getting.” It’s no secret, money is being spent on marketing and training…if it’s not, the channel is dead. But who will get it and who dictates who it will be spent? The criteria needs to be clear, and the reseller’s choice of partners should take this into consideration. There’s no sense in trying to build this business alone – channel partners are needed, great channel managers are needed, and resllers who think they can build a business without the product are wrong. When synergy exists between the two, a winning combination is formed. But this requires an understanding of how to invest and partner in a way that produces profit.
© David Stelzl 2010
How are resellers showing an ROI on managed services deals in order to sell them? (If you are in channels, I’d be interested in hearing what you are seeing from your partners as well). Here are some observations along with a White Paper I have written on using assessments to accelerate sales cycles by providing justification to the buyer through risk.
WHITE PAPER: (click and download the Assessment document)
Personally I have found that assessments work as deal accelerators (when they focus on risk analysis) – we’ve done them in every sized account; some complementary, others for a fee. The deal is closed when justified by demonstrating a high likelihood of loss. What are you seeing? I’d love to hear your comments on this and the white paper! If it’s helpful, feel free to pass it on.
© David Stelzl, 2010
