Round 2: Additional Thoughts On How To Build Successful Agent Models
The standard line anytime a manufacturer realizes this type of program isn't working is that it has come to believe that these types of services are best managed by distributors or other players in the channel. Of course, what these manufacturers never admit is that they wanted to bypass the two-tier model when they launched the program in the first place.
Cisco's newfound religion on this is no different than that of any other manufacturer that claims it is 100 percent committed to the channel, yet is always trying to figure out a way of bypassing it.
The fact of the matter is that Cisco isn't the only hardware or software supplier that has failed miserably in trying to execute an agent program. The reasons this one failed aren't unique. Most manufacturers get hung up on control and lose sight of what these programs are supposed to do.
A few weeks ago I wrote a column on why I thought PC Connection and other e-tailers might be successful at managing agent programs. In my opinion, these programs can only be successful in two places: either with second-tier e-tailers such as PC Connection or Zones, for instance; or within the distribution sector.
In the distributors' case, the main hurdle they face is that none make a practice of selling directly to end users. A true agent model calls for the solution provider that decides what product should be used to offload the actual purchasing process to the customer, while it handles the integration and support. For a distributor to directly touch the end user would cause all sorts of controversy.
Are there ways to get around this? There just might be. For instance, could a distributor successfully set up a separate division that works exclusively with influencers?
Picture this. The solution provider specs out a solution that includes hardware, software and services. In the current flawed version of the agent model, this may require registering a deal or other paperwork, but in the end, the customer is responsible for purchasing the product. Suppose the distributor could be handed the procurement sheet, at which point it picks, packs and ships the product to the end user, assumes the receivable, administers the paperwork with the vendor's convoluted agent program and pays a small portion of the agent fee to the VAR.
Of course, nothing is ever as simple as all this, and any way you cut it, this means the distributor must deal directly with the end user"something that has been and probably will remain taboo to some elements of the channel.
But the reality is that a large portion of the channel is influencing a large portion of product sales that are placed either direct with manufacturers or through e-tailers and elsewhere.
Manufacturers want to influence the influencers, and they believe some sort of agent model is the best way to do so. To date, however, agent programs have not been terribly successful, and manufacturers need to realize that the channel is the best place to manage them if they want to see this change.
Finally, any of these programs should be considered part of a larger marketing effort to influence solution providers"and, in turn, drive market share. Unless manufacturers look at the issue with this in mind, the agent concept will never make it to the next round of debate.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].