Succeeding as a Channel Leader in Today’s Ecosystem
Things were very different in the first few decades of the channel. Channel Leaders knew their quota and felt that was the majority of what they needed to know. It could just as easily have been shoes or other products. The key channel skills needed were to mobilize their channel managers to mobilize their partners, to sell more. In short, that was pretty much their entire mission.
In August 1981, IBM dubbed channel partners “resellers”. They referred to the value chain from them as manufacturer, to a few chosen “aggregators” who would “aggregate” sales from all their “reseller” customers who would, finally, sell them to end-customers as the “reseller channel.” Historical note; the driving force behind the name was that “nobody but IBM, can sell IBM” was a cardinal rule. So these new computer retailers would be re-selling the products. Therefore, resellers understood that their job was to push these products to their customers.
Year of the LAN
In the earliest days of networking, some vendors started to expand their mission. Some found ways to enable their partners to go deeper into this lucrative new market by improving their technical channel skills. This led to the year of the LAN extending into four or five years. While other resellers evolved their companies into network specialists, a transformation that would continue to roll and grow for the next forty years. As product margins grew thinner, these evolved service providers depended more and more upon the sale of their own services to produce their profit. The value-added reseller (VAR) who gave away services to win what were high-margin product sales, gave way to the service provider who all but gave away the products to get the services business.
The Changing Channel
“Transformation” doesn’t adequately describe the change Channel Leaders have had to undergo as the channel changed. “Metamorphosis” might get closer. In fact, today’s channel leader is very likely not from a sales background! Certainly, they still have a quota that weighs heavily on their mind at all times, but the path to filling that quota is definitely a new and different one.
Channel Skills Enabling Today’s Leaders
Dave Willis, veteran friend of the channel and Corporate VP of Microsoft’s US Partner Group
Dave suggests that today’s partner leader, needs to be much more deeply involved in how the partner is successful. He describes a primary role of channel leaders to be helping their partners achieve clarity. “Being clear on what success looks like,” explains Willis, “so I’m very big on goals.”
Gavriella Schuster, Microsoft’s Corporate VP for Commercial Partners
Gavriella agrees with Willis, explaining; “What’s changed with our partners in the ecosystem is that they no longer neatly fit into these categories of Systems Integrator or Reseller or Application Builder. Most of the organizations are doing multiples of those things across multiple parts of our platform.” This striving for definition and clarity also includes helping partners understand clearly where the business is going, and where their business is going and how they can adapt. “It’s tough to just be a reseller these days,” intones Willis, “If you haven’t evolved, selling either managed services or project based services, or developed your own IP, it’s pretty tough to remain profitable out there.”
Janet Schijns, CEO the JS Group
Janet agrees with Willis, adding: “We’re not going to just talk about our products and our margins or our commissions, we’re going to show a partner exactly how they make money and how much money they make and how much it costs them to make that money.” Schijns says the principle channel skills to have is what she calls “social selling”, suggesting that channel leaders must help their partners answer certain questions:
– Firstly how do you build a brand and a persona online?
– Secondly, how does your team build the brand and persona online?
– And finally, how do you engage with these new digital citizens and have the right social commerce?
Janet points out that customers want to enjoy a similar excellent experience, no matter how they engage with you. And that you must be present in all media including web, social networks, email, and more.
Datto SVP Business Development, Rob Rae
Rob summarizes this primary skill required of today’s channel chiefs by saying, “Most important is keeping a pulse on the ever-changing channel. What does our channel need to continue to grow their businesses, and how can we help?”
The Fundamental Difference in Today’s Channel
Early channel resellers were there to push their vendor-partner’s products out to the end-user market. However, it didn’t take long for margins to evaporate leaving them with no real motivation to do so. Today’s channel leader understands this. They can’t be talking about illusory margins or just showing up to check the current pipeline.
Ecessa VP of Channel Sales, Len DiMiceli
Len says that a channel leader cannot afford to be “just an order taker, but a strategic business partner, making yourself and your company instrumental to each partner’s success.” Clearly, this requires a deep understanding of each partner’s own value proposition. Perhaps they provide excellent managed services, or they build superior networks, implement winning DevOps processes. Or maybe they simply have a great software product built on their own IP. The smart channel leader becomes adept at understanding those value propositions and finding ways to align their products so they help add value to the offering and the partner’s product pulls their product along with it into each sale.
The simplest way to look at the change is that we’ve gone from push to pull. Above all, help those partners understand how your product or service helps accelerate the sales motion toward their own offerings. If successful, you’ll be the kind of partner they’ll call “partner!”