Roundtable: Improving the channel's bottom line

Roundtable: Improving the channel's bottom line

How to retain profitability within the channel is an issue vendors, distributors and resellers have to constantly stay focused on

(L to R): Angela Logan-Bell (Express Data), Cam Wayland (Channel Dynamics), Steve Martin (Symantec), Jamie Warner (eNerds), Matthew Sainsbury (ARN), Nadia Cameron (ARN), Craig Somerville (Somerville Group), David Lenz (Ingram Micro), Nick Stranks (Ethan Group), Sean Bishop (Harbour IT), Tony Heywood (Klikon Solutions), Joe Arcuri (Synergy Plus) and Brian Nisette (Frontline Systems).

(L to R): Angela Logan-Bell (Express Data), Cam Wayland (Channel Dynamics), Steve Martin (Symantec), Jamie Warner (eNerds), Matthew Sainsbury (ARN), Nadia Cameron (ARN), Craig Somerville (Somerville Group), David Lenz (Ingram Micro), Nick Stranks (Ethan Group), Sean Bishop (Harbour IT), Tony Heywood (Klikon Solutions), Joe Arcuri (Synergy Plus) and Brian Nisette (Frontline Systems).

NC: Should vendors be recognising a partner’s annuity business?

CS: Not yet. Our market is our annuity. We build that annuity all the time when we build a new market, but the vendors never support us. We don’t want them wiping that out with the stroke of the pen. If I build a business with technology X, and service that market and the customer keeps buying from me, it should be my business. What happens though is I build that business but the vendor sees 35 other resellers and more products they can push into the market and it just becomes another product for me.

BN: The other issue is that if you’re at the top of that market, vendors think you’re too big of a risk to have it all. So they will actively put other resellers in there. The continuity of ownership in a customer’s account sits with the reseller.

SM: I’d like to touch on deal registration. We as Symantec have a bucket of cash to provide our partners with to reward them for behaviour we’re looking for. Opportunity, deal registration is one of those. It’s not because we want to know who the customer is, it’s because we want to know where the opportunities are so we can help you close them at an accelerated rate, rather than have them go to a competitor.

NS: While it influences our behaviour, it doesn’t always drive behaviour at the vendor’s end to recognise the time and investment we have to put in to do it. And if we lose the opportunity because someone drives by, the 3 per cent time investment around pre-sales work and getting ready for that opportunity means that sometimes we don’t trust enough or see value in the registration process. Or worse – a direct end-user rep ignores us and enters the deal as a direct one.

SM: Opportunity registration for a vendor is where we can identify a security, backup, archiving or other solution opportunity is. Our goal should be – and sometimes it misses on execution – to engage with that partner to ensure the deal goes down with Symantec.

NS: If I hypothetically sell $1m worth of stuff, I’d much rather waive the 10 per cent rebate and instead have one of your reps worth $100,000 come to my meetings and work out of my office. I can then take him in knowing I have a card-carrying Symantec person, saying to the customer ‘we are supporting the reseller approach being taken’. If you want to spend the money, invest it in your own people to help drive this kind of behaviour in your business. Co-fund a head or train the rep. Look at my turnover and say ‘here is $500,000 worth of professional services time’ or half a million dollars in people, which is an incentive for me to go out and find a deal. I guarantee that will give you more of a return than paying a company the profitability through a rebate for doing it.

JA: I’m not sure I agree – we have five funded heads from one vendor in our business, and have had that for years, but we’ve been given budget to sell more this year yet been stripped down to two funded heads. I can’t strip the people out of my business because they’re supporting my teams nationally, so now I have to spend $300,000 more to cover that vendor.

CW: Through our channel research, often the number one thing that comes back is formal business planning and opening up the lines of communication. I’m curious to know how many of you have a formal business planning sessions with key vendors around engagement problems.

TH: The business planning with vendors is somewhat academic because they are coming from the point of view of how many units they can sell, whereas we are looking to build profitability in our business.

JW: I’ve done some planning with Express Data around how many client prospects we can get out of a particular marketing activity. It wasn’t a massive planning meeting, but there was discussion around client acquisition rather than units.

NS: We have gotten down to metrics on marketing and worked out how much it costs for each meeting generated, per customer acquisition. The one thing we don’t allow anymore is vendors to dictate our plans because we know the best way for us to spend those dollars is to do it our way.

SM: That’s exactly the behaviour we want – we want businesses to be proactive and understand where they sit. You’d be surprised how rare that skill is in our industry.

NS: We are a very mature company now and professional in the way we deal with vendors, but there is a substantial business change that needs to occur once you get to a certain critical mass. You can’t be casual, you’ve got to be professional and have an ROI on those initiatives. If you eventually want to list your company and move forward, they are the kinds of things you need to.

ALB: We like to tailor our campaigns, the challenge is to get the scale. To be able to scale across your customers and the depth with those customers so you can retain them, but then building your business and developing individual campaigns, is a major question.

JW: It seems there are a lot of resellers with 20 staff who aren’t operating their business effectively. They’re not strategising around marketing or scaling their business, or exit strategies.

CW: It’s the disadvantage of working in the business, not on the business. Resellers are typically technology companies passionate about the technology and focused on the customer service, but the business skills are weak. One of the weakest thing we see is the marketing skills – how do they promote to their database, what’s the communication message, what’s my unique sales proposition to the customers. But more importantly, how do you market yourself back to the vendor to access those vendor resources? The smaller the reseller, the more challenging that is.

BN: You have to get to a certain size before you can really dedicate marketing resources. We have 110 people and three people dedicated to marketing, but when we had 50 people, we didn’t have a single marketing head. Even with three people, half of our time is spent selling to the vendor to get pricing or whatever. We really have to do two sets of sales before any order goes out the door. The same thing with marketing: We think about how we market to the customer, but then we need to focus on how we’re marketing back to the vendor.

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Tags Ingram MicroEthan GroupExpress DatasymantecHarbour ITsynergy plusFrontline systemsklikon solutionsChannel DynamicsSomerville GroupeNerds

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