Building an IT Partner Channel in a Land of Giants
Using a channel model of independent distribution partners and resellers to help find, win and grow loyal customers has a long tradition in the IT sector. For many the indirect channel has been a major contributor to global success, but for many newcomers making it work remains a constant struggle with disappointing returns. Today we are sharing our thoughts on the challenges for a growing software or hardware vendor trying to establish an IT channel partner base in EMEA. With our founders having over 25 years each working the IT channel from both sides of the fence we are going to share with you how to most effectively get your products known, with or without the distribution giants that have been around since the beginning.
While we agree the channel is the most scalable way to get your products to market, things have changed in recent years. Technology and the Internet have changed the way people consume data completely, we have moved away from the humble telephone and glossy brochures. The Distribution Centers we once knew with a 500 strong sales floor are no longer. Brochures, well they grace the bottom our trade show bags until our next recycling run. Email marketing - yes it works, but it has to reach the right people with engaging content rather than being noise thrown into an inbox. If we are honest most of the information that leaves a distributor destined for a reseller does not ultimately reach a buying audience, your messaging will simply get lost amongst the other giants in this game, the tier 1 IT vendors, especially if your brand is relatively unknown.
In addition, the distributors are not just out to make money from selling your products. In fact, they will not even put your product on their books without you having to part with a lot of money, vendor marketing is a big source of revenue and a P&L centre in its own right. You will undoubtedly be presented with a big shopping list of hard to measure marketing options and perhaps offered a full or part funded head to call on resellers about your products. It is a bit like social media advertising today, if you are not paying then you are not visible.
Let us suppose you do decide to spend lots of money to play with these giants. They display your logo on their website, ask for a consignment of stock on a sale or return basis and then send a few emails to their reseller database. What you may then find is that visibility of any campaign opens or clicks are unavailable to you, so there is no actionable data for your sales team to work on. If you would like to follow with a call out campaign your friendly giant may offer this as a costly outsourced option using their favoured telemarketing agency. We have to realise that distribution sales are very unlikely to actively promote your product as it is unknown and many distribution sales staff are non-technical, so they work within their comfort zone. In the vast majority of cases the solution is already designed and the products are already chosen, so most will simply sell what the end user has asked their reseller to provide.
So if you are a new vendor, perhaps having secured your third round (Early stage/B) or fourth round (Expansion stage/C) of funding and are ready to now push your products you may be reading this and thinking, OK so how do I scale and build a sales pipeline that will make us worthy of attention in the channel.
Here is our staged approach to establishing your brand as a newcomer looking to succeed in the IT channel.
Stage One: Understand your customers and deliver valuable content.
The essential first step is to ensure you fully understand your target customers in order to develop messaging that clearly positions your brand as a compelling new way for them to address their challenges. This sounds like Marketing 101 but it is shocking how many start-ups fail to present a clear explanation of the value their solutions bring. Many have been so entrenched in developing their products that they fall into a ‘product features’ mind set rather than focusing on customer value. We work with our clients to develop impactful messaging using techniques such as animation, video and infographics. It is claimed that people remember 80% of what they see and only 20% of what they read, so don’t fall into the trap of creating long text based content at the early brand awareness stage.
Stage Two: Work smart and deploy cost effective methods to reach your audience.
Next you need to determine ways to reach your audience. As we cannot rely on the IT reseller channel to help us at this stage we will need to do this ourselves. Our approach would evaluate multiple angles that may include: customer data acquisition from trusted industry specific sources, smart and cost effective use of digital channels and techniques, regional PR with effective pre-pitching of press releases to key industry journalists and analysts (PRNewswire is not effective in EMEA), promotion of impactful content across multiple channels and in each case with a specific call-to-action. The key to all of this is that we are now in control of our marketing campaigns and can measure the return on investment, unlike the high cost distribution campaigns that are not fully transparent to us. Plus, we are now starting to build our own customer base that we can re-market to in order to move them towards the end goal of selecting our products.
Stage Three: Build your own customer base through measurable campaigns so that the IT channel need you on their line card
Finally, having started to gain traction off of our own merits we need to start looking for resellers that address the industry sectors we are targeting, or better still, carry solutions that are complimentary to ours that may provide some market pull through. Sales can of course be taken direct in the early stages but selection of a Master Agent may be a good option at this point. Having driven our brand from the ground up by making lots of noise with the key purchasing decision makers in our target sectors we should be in a position to provide resellers with leads which will certainly command their attention.
Fill your skills gaps and compliment your team with The Plexus Way
Of course the three stages above are very high level and one size never fits all. Also, our process illustrates a major challenge for any newcomer that in order to undertake a multi-faceted campaign driving a new brand into a new geography requires a wide range of skills; marketing strategy, content creation, graphical design, digital marketing, PR and of course an intimate knowledge of the EMEA IT channel.
You may not yet have all of these skills in-house, in fact you may not yet have any physical presence in EMEA. We often find a lonely sales or business development head based in region trying to build a channel alone, or with support from a single marketing resource in a time zone perhaps 8 or more hours behind.
This is where The Plexus Way can help. We can provide access to all of the skills required to establish your brand in the channel for less than the cost of a single marketing hire, but without the HR overheads or any fixed term contracts. Our model can also compliment your sales and marketing operations globally.
Once you start to establish your partner channel we move into the realm of channel partner management with a whole new set of challenges. We will discuss this in a future blog article so stay tuned.