The Channel Post

There is no denying that it’s been a tough, tough year for many in our industry. With signs of “recovery’ around job growth (albeit small and certainly protracted over the next 12-18 months) and improvements in the stock market, there is certainly room for optimism in the coming year ahead.

But for this past year our clients have managed their budgets much more tightly and with an eye towards spending on only those things that  correlate directly to tangible benefits whether that be operational efficiencies or actual sales revenue.

We’ve discovered some consistent themes in terms of channel priorities for 2010.

• Remodeling and validating partner programs
• New incentives to drive specific behaviors within channel
• Optimizing existing channel “spend”
• New markets
• Optimizing internal sales teams
• Partner training and enablement

We hope these insights have been helpful and that may be able to use them as a benchmark against for your own strategic channel planning process for the upcoming year.

Sounds like an oxymoron, doesn’t it? It is probably the number one issue that causes mistrust, conflict and legal issues between a manufacturer and channel partners. This article is not intended in any way to be a discussion of what is legal, ethical or the ‘norm’. This is about managing exception pricing within the channel.

Let’s define the term Exception Pricing as non-standard, discount from published pricing, or as the dictionary states “ something excepted; an instance or case not conforming to the general rule.” I’ll take it one step further. Exception pricing is given to a select partner(s) or customer(s).

This assumes a couple of points:

1. There is a ‘general rule’ which means the starting point is standard, published pricing, for purposes of this discussion.
2. Exception always means a discounted, lower price.
3. These variances can be managed fairly, legally and consistently.

There are some legitimate reasons for exception pricing of course.

* Large volume purchases
* Product clearances
* Public bids
* Competitive pressure
* Customer loyalty programs
* Cost to serve

Click here for full article

Do you have projects just sitting on hold due to a lack of funding?

Have you thought about government funding, but were never really quite sure how the appropriations process works?

Do you believe that the only way your technology company can obtain government funding is through Small Business Innovation Research (”SBIR”) Grants?

If you have or are working on a technology project that a government agency may be interested in, a federal earmark could be a real possibility for your company. The weak economy and tight federal budget combined with less investment money make the 2011 Appropriations Cycle more critical then ever.

The Federal Fiscal Year begins October 1 and is named for the next calendar year. Therefore we are currently in FY 2010 with FY 2011 beginning on October 1, 2010. Federal agencies are currently finalizing the funds authorized for FY 2010. However, the same federal agencies are also preparing their budget proposals for FY 2011.

In February 2010, President Obama will submit his FY 2011 budget request for the federal government to Congress. After the Budget is passed, the pot of funding will be authorized for Federal Agencies. However, if you wait until then to begin your effort to obtain a FY 2011 appropriation, you will be left empty handed.

If your pitch is successful, a member of Congress will request your project funding to the appropriate subcommittee of the appropriations committee. Your project is not funded yet, as it will have to survive the appropriate subcommittee and pass a vote by the full House or Senate. Then a conference committee mark-up will take place where any differences between the House and Senate versions of the bill will be worked out to form one conference bill. The conference bill then has to be voted on by both Houses of Congress and if signed by the President will become law.

The process is very competitive and has only grown more so over the years with the drop in federal funding and inability to obtain funding from the private sector. In order to succeed in obtaining an appropriation it may be in your organization’s best interest to hire a lobbying firm. However, whether you decide to hire help in order to attempt to secure funding for your project or go at it alone, the key will be to grow awareness of your project and get it in front of the right people as early along in the process as you can.

I never thought I’d utter these words to my fellow Channel Marketers but I think it’s time to give in a little to your channel sales reps demands. Yes, for years we’ve had to be the gatekeepers and enforcers of program requirements and we dole out precious MDF funds to partners. And, gasp! we even ask for ROI on MDF investments. We’ve pushed back on special deals that would put other partners at a disadvantage or that push right up against that ole Robinson-Patman Act. Bravo for doing such a great job! But current market and economic conditions call for a little more collaboration (well, you giving in actually) with your sales brethren.

Sales management sets the quota, sales reps work like the dickens to meet their quota. But these days making the quota is just plain hard. Your reps are probably getting quite creative and have probably ratcheted up the pressure on you to give them more money and more incentives.

As a Channel Marketer, we’ve all been told one time or another that “you’re creating barriers to sales!” While I’m not advocating giving up the farm just yet, I do believe there are some areas that Channel Marketers can be a little more flexible in the short-term. Here are some thoughts and ideas:

1. Add an extra 30 days to meet compliance requirements for new partners.
2. Consider moving a few of your “emerging or niche” partners to the next higher level in your program.
3. Loosen up your deal registration minimum deal size. Getting a foot in the door is more important than trying to win that one big deal. The future revenue potential could be significant across multiple new customers.
4. Jump start MDF for individual partner activities – out of the box ideas that fall outside “published MDF guidelines”. Come up with ways to engage/motivate your reps and partners for creative lead generation ideas. Hold the ground on that golf tournament unless every participant has agreed to a P.O. after the 18^th hole!

Happy collaborating!!

Divine Discontent

Channel Management Series 1.0

In business (as in life) a certain level of tension between and within organizations can be healthy. For example, vendors and their partners can harness the power of channel conflict or disparate business models as a source of motivation towards change, growth and innovation. there is a phrase today being coined “Divine Discontent”.  Divine Discontent is a signal that something awesome, amazing and wonderful may be breaking through the inertia of the old paradigms.  It rears its face in the initial stages of an idea and then transforms into a sudden urge to bring the vision into fruition.   How does divine discontent play out in business? It can be the motivation that drives the business relationships forward.

Consider these historic proof points:

• Channel Conflict between larger and smaller reseller have pushed vendors to create programs that even the playing field and created “Deal Registration” programs which are now de facto standard for channel programs.
• Changing economies and commoditization of products have naturally evolved into service heavy business models by partners. These new partner business models were in direct conflict with the need for vendors to drive product sales and created tension between the two types of organizations. The result of this tension has been the development of hybrid vendor programs, SaaS, HaaS, outsourced services to partners by vendors and the advent of partner networking communities that provide partner to partner collaboration.

What can you do to ease the symptoms of divine discontent in your business and move more quickly towards forward progress:

• DO NOT FOCUS OR GET CAUGHT UP IN THE COLLAPSE OF AN OLD WORLD PARADIGM —- BUT RATHER, ASSIST IN THE SHIFT. This shift in thinking will take a while. So you may as well, get comfortable handling fluctuating channel activity and constant conflict.
• DO NOT FOCUS ON A HALF EMPTY —-BUT RATHER, FOCUS ON A HALF FULL. Design programs that make your partners feel a part of and useful in the process of defining new ways of thinking and working together.
• IDENTIFY WITH THE AMAZING BREAKTHROUGH RATHER THAN THE DISCONTENT.

In celebration of our 13th year in business we are contributing to the evolving nature of IT channels. You can now join our community dedicated to being the primary source for the channel by logging on to ChannelWorks.com, joining us on Facebook, following us on Twitter (www.Twitter.com/ChannelWorks) and subscribing to our blog and newsletter .

You will have access to valuable information, cases histories, interactive discussions, videos and thought-leadership articles and insights from industry experts. These new tools demonstrate  our ongoing commitment to being on the cutting edge of channel marketing community-building and thought-leadership.

Please send me your thoughts and ideas by joining our community or feel free to e-mail me directly at acelmer@channelworks.com.

Most of all, thank you all for your continuing support as we enter our 13th year in business. These past thirteen years have certainly been both terrific and challenging and we are grateful for your encouragement, business and friendship.

-Alicia Celmer

P.S. Here is a fun romp through 30 years of channel trends http://www.channelworks.com/FUNLOOKBACK.pdf

Those of us in the Channel world know intrinsically that channel partners are not all created equal. As a manufacturer, you may have inherited or built over time, a reseller partner map that no longer reflects your business priorities.  As a reseller or integrator of products, you may have added so many products to your service offerings that your sales people no longer know what to sell. But what do most companies do about it?

The ROI tool you use can be a complicated math formula or a simple report card. I recommend three factors to consider in making these ‘keep/don’t keep’ decisions:

Cost – actual and hidden, should determine profitability

Influence – getting what you pay for

Compatibility – If they’re “just not that into you” don’t waste your time

And a common business model:

• Coverage – do your partners extend your reach into the market?
• Products – do your partners represent the best products for your customers?
• Price – are the products priced correctly for your market?

Whether you rate them with a 1-2-3 scale, A-B-C or a top to bottom ranking system you will clearly see that not all partners are created equal.  Then you need to do something about that.  Start firing the non-productive partners just as if they were non-producing employees and reallocate those investments into your best partners for a greater return on your investment.