New Products? Clear Strategies1:30 PM EST Mon. Jul. 25, 2011
We recently hosted 35 representatives from the top technology companies for IPED’s Channel Masters seminar. These are a combination of today and tomorrow’s alliance and channel vendor leaders, whose objective is to hone their partner strategies. Each attendee indicates the No. 1 thing he or she would like to take away from the session. Here, partner recruitment was at the top of the list, both from a “protect our partners from competitive recruitment” as well as “to better recruit target partners” in the normal order of IT vendor business.
Our partner research tells us that on average, you add up to 20 new technologies in a year as you align your offerings with customer business problems and buying needs. Our research also tells us that you drop technology offerings from your line card annually as well.
The size of your company and scope of your offerings impact your adoption and termination of technologies. Very large partners, let’s say in excess of $40 million in annual revenue, might go so far as to have a single representative of the company conduct the first evaluation before the second round of evaluation by sales, services and management. For the average U.S. partner, those of you in ownership positions typically guide the solution offerings of your company and therefore prioritize which vendor product pitches are of interest or, more typically, seek out vendor products directly via the vendor’s partner portal or your distributor.
Our research and your feedback tell us that when you are evaluating vendor products and offerings to add to your line card, you are first evaluating the technology market need and customer demand. Quality of the product along with how it fits within your overall business and offerings rank next. When customer demand for a particular product is high and the market opportunity significant, we recognize you allow vendors more leeway when evaluating the following factors.
Vendor pre- and post-sales support ranks right behind the market/customer demand assessment as well as the need to differentiate yourself from your competitors. If a product appears to meet these goals, we see most of you dig into the next step, understanding and quantifying your staff time and hard costs required for education, first-line support certification, demo kits and other required investments. These hard costs and staff opportunity costs are then netted against your projected gross margin per deal and expected deals per month until a clear return on your investment represented in months emerges.
With this information, you can now make a business-savvy decision to embrace a vendor product strategically rather than opportunistically. Further, you can estimate, if all assumptions hold true, how long it will take you to break even on your hard costs and staffing investments. This allows you to set appropriate expectations internally.
When the new vendor comes knocking or your trusted channel account manager approaches with a new product, bring each one back to this line of questioning. Ensure you have a clear line of sight on your projected return. It costs you money to bring on a new vendor; it costs a vendor money to bring on a new partner. I believe both parties are wise to pursue partnerships strategically with visibility to the required information on the table, or at least reasonable assumptions if the product or market is new.
BACKTALK: Contact SVP, IPED MarketBridge Alliance
Rauline Ochs via e-mail at firstname.lastname@example.org.