It's The Year Of The Monkey In Channel Programs In The Western World

Quite frankly, I think it has much more character than the boring Julian table. The calendar is based on a 12-year cycle in which an animal symbol is assigned for each year. This year, which begins this Thursday, Jan. 22, is the year of the monkey.

Now, I've never had the pleasure of studying Chinese culture, but I am fascinated by it. Because of its longevity and ability to hold onto customs that were developed many centuries ago, Chinese culture offers a level of wisdom and respect that is often lacking in our own modern Western culture.

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ROBERT FALETRA

Can be reached at (516) 562-7812 or via e-mail at [email protected].

Here in the Western world, for instance, when we refer to someone as a monkey, or a monkey's uncle, it's a derogatory statement. It's that derogatory Western version of the monkey that I'd like to focus on here as it pertains to this industry, the channel programs that drive it and how much value vendors place in those channel programs.

This is going to be the year of the monkey when it comes to channel programs. Those companies that put their best and brightest on channel relations, challenge conventional thinking and push hard will be successful. Those that instead take the easy approach to channels will have great difficulty.

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Let's examine a couple of approaches developed by the monkey camp. It always begins with a statement about the 80/20 rule: Twenty percent of our partners do 80 percent of our business so we only want to concentrate on that 20 percent.

I've seen more companies fail because they use the 80/20 rule in developing channel programs more than any other single principle. The trouble with this is, it sounds so logical a monkey could understand it. It stands to reason that if 20 percent of your solution provider partners are driving 80 percent of your business, then concentrating on them alone will make you successful.

'One approach developed by the monkey camp begins with the statement: Twenty percent of our partners do 80 percent of our business so we only want to concentrate on that 20 percent.'

But if it's so logical and successful, then why do companies such as Microsoft, IBM, Intel, Cisco and Hewlett-Packard cast such a wide net when it comes to channels? Do you really believe any company could battle Microsoft with just 500 channel partners? Cast a small net and you can catch only a few fish. Bigger nets can collect more and bigger fish.

The other monkey channel principle I chuckle at when vendors tell me about their well-designed channel programs is how they are after only a small group of channel partners with technical expertise in the finite area on which the vendor concentrates.

Again, this sounds so logical that an orangutan could make sense of it. But those who spend a great deal of time talking to solution providers and have been in this business for more than five years realize that solution providers are constantly changing their business models and build expertise where the opportunity lies.

If security is where the profit margin is and what customers need, then solution providers that service those accounts are going to either build expertise in that area or bring in a partner. Vendors that have no relationship with those solution providers may have no chance to be in on the buy.

These and other basic principles that executives use to justify programs that constrict the size of their channel may sound logical. A small channel is also easier to administer and can be sold to senior management as less costly. But if a monkey can understand a vendor's channel strategy, then maybe it needs a bit more work.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].