Every mid-tier storage vendor dreams of becoming the next Lefthand or EqualLogic; a multi-million dollar payout or IPO for a company well-built. But with the onslaught of fast moving storage vendors like Coraid, Greenbytes, Texas Memory Systems and Exagrid the task is getting tougher.
Channel leverage is still key. OEMs can’t scale without an increasing number of good channel partners to fulfill the demand. The difficulty is that the days are gone when you can simply architect a solid storage appliance, wrap it in a channel friendly program and watch it explode. Today, every mid-tier storage company has basically the same story–good products (albeit similar) and a great channel program.
So, with the saturation of mid-tier offerings, how can an IT OEM set itself apart and win the “Seed and Feed” game?
First, stop “Pushing on a [channel] String”
Many OEMs find themselves “pushing on a string” when trying to grow their channel programs. They know a strong channel program is critical to scale, yet they go about building it the wrong way. They don’t seem to understand that in today’s self-service environment, their channel partners have little or no chance of finding new customers. Look at Figure 1 below.
Figure 1 – Prospects block out channel partner marketing messages and MDF is wasted
OEMs spend a significant amount of Marketing Development Funds (MDF), time and effort trying to get partners to sell their solutions. The buyers, however, aren’t biting. The reason these marketing funds are being wasted is that end users no longer look to channel partners as the source of knowledge about products.
Storage manufacturers themselves have healthy websites with unlimited information about their products; information that is much more up to date and relevant. Why would an end user waste time in the early stages of a project (a critical time for the vendor that wants to win high margin deals) with a reseller when he/she can research solutions directly with the manufacturer? Answer: They wouldn’t.
Quite simply, VARs don’t create demand any more, they fulfill it.
To solve this problem and get back on track, OEMs must realize that they hold the key to channel growth. A strong channel is built by finding new sales opportunities that can be transferred into the channel for fulfillment, not partner agreements and wasted MDF.
The best way for OEMs to create new partners (seed) and build (feed) existing partners is to put in place a strong program that surfaces sales opportunities and gets them to their channel partners quickly.
Here’s the 3 steps:
The following diagram shows how a pull process works. Since serious buyers always research solutions directly with the OEM, it makes sense that the OEM takes the primary role of “lead converter”. As inbound visitors check out the OEM’s website, strong calls-to-action can entice and motivate serious buyers to respond.
Figure 2 – The pull method places the OEM front and center in lead generation activities on behalf of channel partners
The power of this method is evident when a new, potential customer engages with the OEM. Suppose a prospect responds to the website offer and contacts the sales group of the OEM. With a simple question, the sales rep can “seed or feed”. Here’s how it might go.
This is Bob at SnazzySAN. I approved your request and it has been sent. If you have not received it, please check your spam filter.
May I ask you a question?
Do you have a specific Value Added Reseller you prefer to work with, or no?
Now, if Bob responds with “Yes, I like to work with DataPart, Inc.” and they are not yet a partner you have the opportunity to seed a new partner relationship and bring DataPart into it’s first deal.
However, if Bob responds with “No, I really don’t have a preferred VAR” then you are in a unique position to “feed” one of your existing partners a new opportunity.
Either way, as long as you the OEM is capturing and distributing the inbound leads, you can direct them to where it suits your channel program the best. When you leave it up to your channel partners to find new customers you may find yourself spending a lot of money on co-marketing events with few results.
In today’s self-service environment, IT Original Equipment Manufacturers (OEMs) are turning to a more direct approach to channel building. As buyers resist and ignore channel partner marketing efforts, smart OEMs are picking up the ball and driving the lead generation/capture process. Focusing on great content, strong website offer(s) and a formal hand-off process for new/existing partners can help any IT vendor build a successful channel.