The Channel is Not a Numbers Game

We see it with the latest announcement from AT&T about signing Sandler and TBI up. AT&T has fallen in to the same bath of "More is Better" that every channel program in North America follows. Let me explain a couple of things.

The average partner uses 5 master agencies according to recent polls. Five. That means if a partner wanted to sell your stuff, they would just sell it and put it through one of your current partners in the program.

Let me repeat that: If a partner wanted to sell your stuff, they could. They just don't. And it is due to ineffective marketing and a mindset that is in direct opposition to Pareto's Principle that everyone in sales grasps.

I get it. When Sandler Partners posts a press release saying 5,400-plus partners, any program is going to want some of that. The question should be: How many of those get a significant check? How many of the 5400 that inked an agreement with that master agency sell into the market that AT&T (or Verizon or TPx or Cloud Provider XYZ) is targeting?

What AT&T and other providers miss is that they need to create Demand for their product. Or at the very least, they have to market their products better. Microsoft and Cisco - two vendors with a large, effective channel - create demand for their products. Their branding alone is big; not as big as AT&T or Verizon, but big (and bigger than most providers in our space).

The biggest problem is ATTENTION - how to get and keep it from both partners and customers. The buyer process is fragmented right now. But that doesn't mean that the basics of marketing should be abandoned. Who is the Target audience specifically? Why would they need to buy your product? Why your product and not the other ones on the market? What is the immediate benefit of buying your product? What's it like after the buyer becomes a customer?

Those questions are often unaddressed - or if they are addressed, it is in such a vague way as to be wrong. The target market is not 1 to 500 or 1 to 1000 employees. That is actually between 5 and 7 different segments of the market - all with differing buying personas, reasons for buying, etc. We aren't selling ice cream or candy.

This idea of mass market is collapsing for Nestle and for telecom/IT. Verticals will be where all the money is made very soon. Anyone still pitching their stuff for everyone will fail. We have had the ability to market just about one to one for a while now. It is time to shift gears.

Every time I see an announcement that Vendor ABC signed up VAD/Master, I shake my head. How much bandwidth do your channel managers have left? How much money is left in the marketing budget? How will you get the attention of, on-board, train, sell with 5% of the master agency's partners? Is there a written plan for that? Have you worked that all the way out?

It is easy to understand that companies with over $1 Billion in revenue need more than $10 Million in sales to move a needle (and make stakeholders happy). And everyone wants to sell more (and more and more). It has always been about the story telling. It still is. And that translates into demand generation as well as partner generation.

If the vendors would stop puking their whole catalog at partners every chance they get, things would go better for everyone. It should start with a conversation with the partner about who they like to work with and what problems do they have. From that, the vendor can tailor the pitch to those products. That is more work than being told from up high to sell more of DDoS Protection, and just blanketing the channel with what amounts to noise about DDoS Protection. However, it would be more effective.

Yet that method doesn’t scale, right? That’s more channel manager bandwidth (effort). That’s more one to one, not one to a thousand. It will be slower growth, take more time and effort. Patience and sales, correct?

I think that there is a general misconception of how many channel partners there are and how many more vendors they want to work with. It happened with Hosted VoIP/UCaaS. It took a long time to get the channel interested. Providers are hoping SD-WAN has a shorter adoption cycle. Yet it isn’t just up to the partner. They can’t create demand; they can’t make the buyer buy it. That has to come from the marketplace – ultimately from the providers to the marketplace with marketing.

Peter Drucker said, “There is only one valid definition of business purpose: to create a customer… Because it is its purpose to create a customer, any business enterprise has two — and only these two—basic functions: marketing and innovation… The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself… The aim of marketing is to make selling superfluous.”