In a series of blogs Hennie Jansen, partner and CCO at Channext, takes you along his personal journey in channel. From a reseller’s and a vendor’s perspective to owning a marketing agency for 15 years in which he worked a lot with distributors and resellers. Jansen witnessed a revolution of how the companies run channel marketing and sales, resulting in the emergence of a new era: Channel 4.0.
In 2003 Jansen founded a B2B marketing agency to assist all kinds of ICT vendors with their end-user campaigns.
Partner programs shifted and tried to make more use of the knowledge and expertise of the local market. And that personalization had an important advantage. Channel marketers, however, generally did not produce this type of specific content. And that was good news for my agency because it was often outsourced to agencies like mine. We translated corporate end-user communication to the local market of the business partner.
That often worked very well, or so we thought. Because ROI data was actually not readily available. Of course, we got some personal feedback from the business partners whether they were successful. But there was no structured way available for the various channels to deliver that data to us.
Vendors also demanded an ROI on these types of campaigns. They wanted to know where their MDF went, and what came out of it. Unfortunately, we did not have many tools (besides Photoshop) to collect data and distribute it automatically and in a nicely formatted document to our client’s organization.
CRM to the rescue
The real-time information was missing. And that’s also the common thread of this revolution: data became an essential part of channel marketing. This lead to the emergence of products such as Oracle Eloqua, Marketo and Hubspot. And on the other hand CRM systems such as Salesforce to automate communication and centrally store information.
Because partners could not actually access those systems, a partner portal was often built around it. It was quite an investment to ensure that partners shared their data. And to connect CRM systems or marketing automation software. To entice partners to do so, vendors promised extra margin.
In the early days of channel, location was still a bit of the differentiator. But that shifted to a world in which anyone could perform business from anywhere. End-users started to order their products just as easily from AliExpress or Amazon. Product (or solution) orientation went more and more from offline to online. Today, Gartner research finds that when B2B buyers are considering a purchase‚ they spend only 17% of that time meeting with potential suppliers.
To get back to my story: clients made a considerable choice before they went to a reseller with their demand. As a result, margins came under a lot of pressure. Giving vendors a headache looking for new differentiation ways. Eventually, one of those differentiation methods was to ensure that resellers got more margin on specialization.
The rise and fall of partner portals
This meant that as a reseller, you were being awarded some extra margin by being active in a certain type of market. Like health care, the educational sector or SME sector. But this system of pre-set parameters rattled. The main reason for this was the partner portals. Business partners had (and still need) to keep track of all those web-based applications that gave them access to a number of different exclusive resources such as sales and marketing materials, and product information.
In practice though, these portals we’re on the bottom of the to-do list of resellers. In the end on thing mattered. And that was making money and the responsibility entrepreneurs had to get enough sales in so everyone employee could make a living. Even in 2020, it’s a struggle to get reseller engaging with partner portals. Amongst seven reasons why partner portals (nice read by the way) are not used, are a lack of program alignment and training.
As a response to this, this issue split up in two ways:
A movement in which vendors were refining these portals and started pushing marketing campaigns. They added email flows that notified resellers on new campaigns that were going to be ready for them, relieving some tasks for them in the short run.
And movement arose in which manufacturers and suppliers abandoned those portals altogether. They basically said: “You know what? Since you’re not in our portal anymore, just pass on your data the old-fashioned way so I can keep my boss happy.” I mentioned that common thread earlier on in this blog. The lack of that data ensured that the cooperation between those business partners and vendors didn’t really take off in the end.
As a marketing agency, we had a mediation kind of role. During that period I spoke with a lot of resellers and if asked them how we could help them out. They all gave the same three answers: please, give us leads, leads, and oh yeah, some leads.
Sound easy enough. But generating leads is very complex. You can’t just start a business and ensure that customers come to you just like that. Vendors were very focused on helping their resellers to generate more business. Those resellers on their end indicated that they found it quite difficult to work together with a vendor. That has to do with the fact that a vendor does business in a very layered way. You have a tier 1 in which there is direct contact with the reseller, but you also have tier 2, where there is contact with that reseller through the distribution partner. Due to this setup, the majority of resellers rarely or never had contact with the vendor. Leading to low likeability towards such a brand. And if a customer asked the reseller for a different brand, resellers delivered something else.
Loyalty around brands and specific products started to water down a bit. The challenge for vendors rose to see how this situation could be changed. Were we going to work together in a different way? That’s a question I have looked at with great interest for the past 30 years. Currently, there are a lot of interesting developments underway within channel marketing and sales organizations. Based upon which I have developed a vision, or actually a methodology. And I think we can actually make the channel revolution happen.
Keep an eye out for our manifesto!