Slow Economy Puts Solution Providers in High Demand


This slow economy is driving vendors to pay attention to solution providers--almost too much attention. For months, even years, some solution providers never heard from their vendor partners. No outbound communications, no response to inquires. Nothing. Just dead air. In the last three months, however, the missives have been pouring in.

Hardware and software vendors have realized that they can increase awareness and sales in this slow economy by increasing their channel relationships. To some vendors, that means doubling the number of channel partners; to others, that means focusing more resources on the channels they have engaged. Either way, it leads to vendors providing more focus on you to increase sales and save their quarterly financial projections.

I'm hearing two distinct challenges from solution providers emerging as a result of the new attention. One is that solution providers are being bombarded with vendors wanting them to carry their product lines. This is the classic case of vendors believing more is better and running out to attract and engage hundreds of additional channel partners to boost their sales. It can be quite overwhelming to the targeted channel partners. It's like suddenly becoming the most popular girl in school and everybody is asking you to the dance.

For example, when the hype bubble burst on the wireless market, one of the wireless solutions providers we know was flooded with requests to partner with wireless hardware, software and services vendors. The hype-fueled market dried up overnight and vendors were scrambling to gain real sales traction. This solution provider addresses its clients' business needs by pulling together several products, adding its own services and delivering an end-to-end wireless solution. So the company was already engaged in selling and supporting several vendors' products. Almost immediately, that turned into a hundred vendors knocking on their door.

Our best advice in this situation is: Don't let the glow of popularity distract you. Maintain your focus on select vendor relationships that provide for a sustainable, profitable business model. That is, be picky--don't be flattered that vendors have asked you out, go pick your own date to dance, based on your particular business needs.

I've also been hearing from solution providers that their vendors have never been more aggressive in contacting them for sales opportunities. Until about three months ago, these solution providers rarely heard from their "vendor partners." Communications mostly consisted of an irregularly sent e-mail newsletter and a seldom-updated Web portal. Now, we're hearing stories of solution providers being hotly pursued by vendors. This goes well beyond the goals of timely, compelling and consistent communications.

One solution provider we know has one vendor hounding them almost hourly for information on a current sales opportunity. This solution provider didn't ask for help on this opportunity. They have been closing business for this vendor for years without much attention at all. Now that the market is soft and vendors are looking to capitalize on every dime, the vendor wants to be involved in the deal. Again, the solution provider hasn't asked for help. But the poor sales executive, principal and services director are being contacted daily with questions from the vendor. "How's it going?" "Do you think they will buy?" "Who is the decision maker?" "Can we schedule an executive briefing?"

Need I mention that the solution provider never asked for help?

We're encouraging the solution provider to tell the vendor to back off. The solution provider is just trying to close business, and the vendor is getting in the way more than helping the process. They are all spending too much time trying to keep everyone in the loop. Tell the vendor you'll call them when you need them. In the meantime, you need your space to close to the deal.

In a soft market, the attention will continue to move to channel partners as a means to bolster sales. Use this power to strengthen your business with vendors that can provide a sustainable, profitable business model. And take this opportunity to define and redefine your value proposition to clients and vendors.

Diane Krakora is principal consultant of Amazon Consulting, a channel consulting group based in Mountain View, Calif. Her company provides business-development consulting, channel strategy and program implementation, marketing communications and partner-engagement materials. She can be reached at dkrakora@amazonconsulting.com.