Channel has to work harder | What we think

Channel has to work harder

The times have changed and your approach to channel sales and marketing must change too. 

The advent of transformational technology such as cloud computing and data analytics, has forced a reshaping of sales and marketing strategies. And in the era of COVID-19, go-to-market options are more fluid and complex than ever.

Of course, with around 75% of world trade being done indirectly – and 64% of all tech dollars – channel sales and marketing is of paramount importance. The market for through-channel marketing automation software continues to grow at more than 25% a year for good reason. According to Accenture, the large majority (80%) of companies, across all sectors, claim that channel partners contribute more than half of their revenues each year. Understandably, more than 60% of firms are now working with more channel partners than they were two years ago, and 57% say they will increase that number further next year.

But it’s no longer enough for channel partners and distributors to simply fulfil the demand generated by vendors. As buyers continue to find new and creative ways to procure technologies they need, traditional methods of selling are no longer fit for purpose.

Channel under threat

Historically, product vendors would produce guides and campaign literature and use channel partners to service high-volume demand. To hit quarterly targets, the purely transactional relationship rewarded those that could sell as many products as possible and required little or no sophistication.

However, given the ability of customers to buy and download software and technology from the cloud, and the ever-increasing complexity of the technology landscape, channel sales and marketing has been under threat for some time. Now that companies with 500+ staff can buy technology themselves, vendors and buyers alike have started to bypass the channel, finding ever-less value in it.

But as we emerge from the pandemic crisis and the potential economic fallout to follow, end customers have challenges that demand complex solutions that can often be best be solved by the channel. Channel partners sit at the confluence of a multitude of vendors, making them very well placed to advise customers on the right path to take as decision making fragments, more stakeholders are involved and solutions need to answer many more challenges.

Distributors in particular have a vital role to play, in facilitating greater interaction between vendors, partners and customers. Going forward the channel must find answers to specific problems, rather than just facilitate the sales process.

Yes, it’s more complex. But, get it right, and the rewards can be greater than ever.

From volume to value

Technology is widely recognised as a crucially important factor in driving business performance. Even most small businesses recognise that investing in emerging technology is their best chance to innovate, boost profits and increase productivity.

But increasingly, in such a crowded and noisy market, companies are not looking for specific products, but rather specific outcomes.

Rather than rewarding volume, which has become commoditised and price sensitive, the evolving channel model will instead explore what is being sold based on profit and the value being created for the end customer. Where once it was possible to ignore the need for fully integrated answers, the cloud-based present and future makes few allowances for ignorance.

True partners are not just selling products, they are offering a range of products and services that will give the required solution, generating greater returns for vendors in the process.

A consultative approach

Most (66%) B2B buyers say it’s important a vendor’s website speaks directly to their needs or that of their industry. Generic sales material, cascaded to partners, that focuses on product specifications, no longer works. If vendors – and partners – fail to talk about the issues most relevant to customer needs, the risk of losing commercial ground will only grow.

It is crucial in these changed times – as it ever was – that partners are able to take a consultative approach, to add account-specific value to their customers, while moulding a solution around their business needs, which may even comprise of multiple vendors.

And this is where the channel can excel, bringing a bespoke intimacy to relationships with market knowledge and understanding that vendors struggle to match. A consultative, solutions-led approach leads to more products being sold at an increased margin, greater customer loyalty and lower churn rate.

Considerations for channel partners

Understand customer challenges – and which solutions can create value

To make the consultative approach work, maintaining a high level of knowledge about the products you are selling – as well as how those products interact with other products – is key.

However, product knowledge alone is how vendors, distributors and partners have been trying to win for the last 20+ years.

In this more complex world, partners must understand the challenges being faced by the end client and how these manifest – then become more flexible and sophisticated to compose a cocktail of solutions, rather than simply sell products.  

It is incumbent on all channel players to be able to make this happen or, where customer needs are more complex, they’ll begin to lose business.

Hone your value proposition

For partners, it’s time to reconsider your go-to-market approach by focusing on – and honing – the value proposition of working with particular vendors.
However, a refined value proposition is only as good as the messaging, people and partners that take it to market.

In developing a solutions-led approach to channel sales and marketing, you will need to examine the skills, experience and knowledge of the team members charged with having conversations and making sales – particularly when there are multiple vendors and products involved. Investing in training and development of your people is important, as is creating the right messaging.

But it is equally important to build strong marketing alliances with vendors, combining their knowledge and resources with your own unique experience
and expertise.

Blend your sales and marketing capabilities

To truly maximise the potential of the channel sales and marketing need to find a way to blend their capabilities to find and deliver high-value multi-vendor opportunities that will convert into significant pipeline – as opposed to merely sending out a product-specific playbook and hoping for the best.

Serve customers that are smart and getting smarter

The majority (65%) of B2B buyers have already consumed at least three pieces of content before they start speaking to a salesperson. This preference for carrying out their own research makes buyers more resistant to traditional outbound tactics, especially for solutions the prospect knows they need.

However, there is still room for a partner to bring unconsidered needs to the fore and show knowledge and insight. This has been proved to increase win rates. But it demands intelligent, targeted messaging and sales resources to make it work.

A competition advantage

In an age where creating product and price advantage is ever-more challenging, it is time for sustainable competitive advantage to come from vendors, distributors and partners co-ordinating their sales and marketing efforts to deliver solutions. 

The channel, far from dying out, is about to be re-born.

Clarify has generated hundreds of millions of pounds revenue for the world’s most impressive brands and brightest scale ups. We’ve done it by crafting differentiated propositions and intelligent go-to-market strategies that deliver highly valuable Sales opportunities, leading to very significant ROI. 

To chat more about the state of how technology companies are going to market, get in touch with David Meyer, dmeyer@clarifyb2b.com. 

Get in touch

    Your name

    Your e-mail address

    Your Message

    [anr_nocaptcha g-recaptcha-response]