Novartec

The IT channel used to be a pretty straightforward place to live. Ok, so it’s a TLA train wreck to an outsider, but those in the know were clear on the roles ISVs, SIs, VARs, LARs and the like played. So, they just got on with getting good at it and vendors rewarded them handsomely for that.

But in the last few years, a combination of cloud, analytics, mobile and social has changed the channel landscape completely. Customers don’t want servers anymore, they want services. They want to minimise capital investment and pay for what they use. As a result, more and more IT channel businesses are moving from upfront to recurring revenue models and into a world where value propositions increasingly overlap.

The channel business of the future will be a completely different animal from the partner of the past. We are going to see a lot of companies developing vertical and horizontal specialisms in order to stay competitive; and more focusing on higher margin activities such as professional services to maintain income levels. These companies are completely rethinking their go-to-market models and resource requirements. It’s not about getting to the biggest deal anymore, but about developing commitment earlier in the sales cycle and driving ARPU through complimentary products and services. That changes the skill requirement; channel companies now need people who can have conversations across lines of business and work with more educated prospects where the first engagement is much further into the sales cycling. In short: channel partners need to be more than just sales operations with marketing bolt-ons, they need to transform into multi-channel marketing machines and they need to do it quickly!

Only about a quarter of channel businesses in Asia are gearing up to do this properly.

In my experience however, only about a quarter of channel businesses in Asia are gearing up to do this properly. The best are grasping the integration nettle and see marketing as an integral part of their insight development and lead management. Most though, still view it as a numbers game, which digital technology only really helps to perpetuate.

START THINKING ABOUT THE COMPLETE PARTNER EXPERIENCE

There are a growing number of cloud-based through-channel marketing technologies to support the channel. The channel software stack includes data management, incentive management, marketing automation, partner relationship management, opportunity management, sales enablement, training and reporting technologies from a colourful array of vendors. These platforms automate and integrate almost everything, helping vendors manage brands and assets through their network and enable partners to drive consistent marketing initiatives.

Many have been a mainstream part of the marketing arsenal for sophisticated channel businesses for a while, but the danger is to think of this ‘martech’ as some kind of marketing panacea. They are still reliant on the quality of the content that they help to manage. They require a great deal of technical integration and process alignment, and they still don’t help a business stand out from the crowd. And that, in a world of ubiquitous digital communication, is arguably more important than it’s ever been!

Partners need vendors now who will help them develop competitive advantage, not ‘me-too’ marketing. They need support translating centrally-created marketing initiatives into personalised campaigns and help integrating sales and marketing teams and driving operational efficiencies. The challenge for the channel vendor is to start to think about the end-to-end partner experience and invest the appropriate resources in that.

Marketing agencies have a major part to play in this. The marketing services offering to date has been too focused on the low hanging fruit. There has been very little dedicated offerings for more sophisticated marketing operations or for channel businesses managing changing market dynamics. The challenge here, is provide support that enables channel business to scale rapidly regardless of their current marketing sophistication. To do that, there needs to be a different approach, one that addressees the entire channel value-chain and understands the transformational necessity from the perspective of both the vendor and the partner.

Third-party marketing suppliers will increasingly be asked to service niche specialisms and develop initiatives that hit the mark in specialist industry verticals and across business disciplines. We’re already seeing companies hiring vertical specialists and teaching the marketing and more enterprise marketing people coming in from consumer backgrounds because B2C marketers generally have a lot more experience of analytics. There’s also a big drive towards value-added and professional services that channel businesses will need marketing support for and then there’s the question of the technology stack again! Marketing agencies are surely best placed to advise on this. Which begs the question, why wouldn’t they become resellers as well?

In my view, we’re just at beginning of a very disruptive phase that will see the structure and responsibilities of sales and marketing teams change considerably. The marketing services support model will have to be a reflection of that. Vendors need to be thinking beyond two-dimensional marketing support while agencies need to be offering expertise at the more sophisticated end of the spectrum to manage marketing re-alignment, drive operational effectiveness and align sales and marketing technology. Which means they too are going to have to rethink their business models and contemplate services in unchartered territories.

Gavin McClement