Money, Honey, To Get Along With Me

I don't remember who wrote the folk song from the 1960s, "Money Honey," but it says everything about how to drive channel satisfaction.

I'm not talking about handing over the cash for nothing in return. I am referring to a new study we have just completed here at Everything Channel's research division, IPED, that points to what makes a satisfied partner.

In the end, what it comes down to is solution providers are flat-out most satisfied with vendors with whom they can be most productive. In simpler terms, the more money you make with a particular vendor, the more satisfied you are with that vendor.

	ROBERT FALETRA
Can be reached via e-mail at rfaletra@everythingchannel.com.

This isn't about product margin, it's about profit margin. Vendors that have product that garners a nice markup but who then suck the profit out with reporting, training and other costs are missing the message.

But productivity is like everything else when you really peel back the onion skin—it's a tad more complicated than one might think. In order to really know whether things are improving, solution providers and vendors alike need to know what the competition is doing.

For vendors, it isn't enough to understand satisfaction or even productivity of your engagement with the channel. You really need to know what the competition is doing. If a competing vendor has a higher productivity number than you and you don't know that, you could be lulled into thinking you are on track when in fact the rival is in much better shape.

The same holds true for solution providers. It pays to really understand which vendors are most productive for you and if that productivity is growing. It also wouldn't hurt to understand if vendors are more productive for your competitors than they are for you.

What's more important is to put a process in place that drives productivity and the ability to manage it. Jane Cage, COO of Heartland Technology Solutions in Joplin, Mo., has been on this for a number of years now and has done something that's very smart.

Every autumn, Heartland asks its vendors to come in together and build a solid business plan for the next year. The reason I like this so much is that it sets an expectation for both sides and it also puts metrics of measurement in place. At the end of the next year it's pretty easy to determine which vendors are hitting the productivity goals with you and which are not. It also gives you a detailed document on which to base any follow-up discussion, be it good or bad.

In the end it's all about money, honey, when it comes to productivity, profit and satisfaction.

How does your organization measure productivity?
Make something happen. E-mail Everything Channel CEO Robert Faletra at rfaletra@everythingchannel.com.