How to describe what the channel does.  Let’s first understand the business relationship.

A manufacturer has a product or a service they would like to sell on the market.  To reach the broadest market there needs to be a large sales force.  One option is to hire lots and lots of sales people, pay them either a draw or a salary and benefits and when they sell, they can make a commission.  Another option is to contract with sales organizations (resellers, VARs, etc) to sell your product and be paid a commission when they close a deal.  In this situation, the investment fro the manufacturer is smaller yet the number of feet on the street selling is greater.  Most organizations have a mix of these two strategies.  There are some sales reps to help drive awareness and sales, but most of the business goes through the channel.

So what are the expectations of the channel?  It is simple, to make a living.  This means that the channel enterprise is sustained on the “commission” they receive from a closed deal.  In order to close a deal, the channel organization must invest heavily in acquiring clients, establishing credibility with the end users so that they are open to hearing about what products the channel has to sell that address their needs.  The channel organization also needs to invest in systems and people to support the marketing and sales efforts of it people to ensure the end user has a positive experience working with them.  Most channel organizations establish relationships for the long term; they are interested in becoming the supplier of all your needs, not just selling you one product.  The relationship is worth more than any one deal.

So what does this mean to the manufacturer?  It means that the channel organization is both your client and your employee.  If you don’t pay your employee, with no guarantee for future compensation, the employee won’t stay.  If you mistreat the channel over one deal, you are mistreating a client who has more to offer than just that deal.  Just as the channel is in it for the long term with the end user, so should the manufacturers be in the relationship with their channel for the long term.  Always ask yourself, what is important to the client and what will make them buy.

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