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Technology vendors sell directly, through their own sales force or company-owned outlets, or indirectly, through dealers, distributors, resellers and other partners. These indirect sales, along with other business partners, are referred to as “the channel” and are especially important in the technology sector, where the channel continues to account for between 40 and 60 percent of the estimated $1.1 trillion in annual IT sales.
“Many high-tech companies employ obsolete and unproductive channel strategies,” says Paul Rand, director of Ketchum’s global technology practice. “What’s more, fragmented communication across the channel often sparks confusion and conflict. All of this costs millions in lost revenues and profits while damaging relationships and even losing valued customers.”
Says Janet Waxman, vice president of hardware channels at IDC, “Vendors often regard these partners as operational liabilities rather than strategic assets. But interest in the channel is accelerating and, in the not-too-distant future, we predict that Wall Street will judge a tech supplier heavily on how effective—or ineffective—its channel strategy is.”
While public relations has always had a supporting role in channel marketing—Ketchum, for example, has worked extensively with IBM—the industry has rarely taken the lead in developing channel marketing strategies.
But ChannelEdge, Rand says, will give tech firms the knowledge tools and resources to build and sustain successful channel communications initiatives—from fast-start channel and market analysis to quick channel-outreach efforts to propel return on investment.
“The public relations industry is evolving, and this program represents the type of innovation we strive to deliver to our clients,” says Ray Kotcher, president and chief executive officer of Ketchum.
According to IDC research, current challenges to channel strategy include:
Customers are buying—or want to buy—differently than companies are organized to sell The need for a total solution rather than component products is forcing suppliers to form ecosystems that involve many different types of channel and alliance relationships Business partners’ roles and expectations are shifting, triggering frequent channel conflict Fragmented communications across the channel creates confusion, leading to significant lost opportunities Companies find themselves competing with their channel partners Companies run the risk of reducing margins through competitive sales strategies and the inability to sell solutions. As a result, these factors spark miscommunication, outdated programs and disruptive channel strategies, and increasingly trigger public squabbles that grab the headlines.
“Effective channel strategies are driven ultimately by customer need, not vendor business requirements,” says Stephen Graham, group vice president with IDC’s global software partnering and alliances group. “Successful channel strategies never lose sight of this fact and constantly change to remain aligned with the customer.”
ChannelEdge offers programs to assess a tech company’s channel relationships through a comprehensive analysis and audit; to plan an overall direction, position, strategy and communication program, and to execute through programs that range from governing the interaction between partners on a day-to-day basis to a detailed internal and external communications initiative. Each element is measured to ensure it meets the vendor’s business objectives and the program’s goals.
Ketchum and IDC plan seminars in four major cities worldwide later this year to introduce ChannelEdge to technology companies.
