Business technology consumers and the channels that serve them are changing. Three macro forces are driving this change: data explosion, everything cloud and transformative applications. Charting your channel strategy and building the right channel program will be crucial in staying ahead of the rapidly changing world of IT and will make a large impact on your business. This Quick Start blog series will lead you through nine different stages and steps to ensure you have the right strategy, channel and program to get you on the road to sustainable revenue with partners.
Companies tend to think about an indirect strategy when adding more direct sales resources is not a practical approach to building revenue. However, there are other instances that your company could benefit from a channel.
Consider an indirect model if:
1. You need to get to the mid-market to sell your product or service.
The mid-market (SMB, 1-999 employees) offers vast opportunities with a very large segment of businesses falling into that definition. According to IDC, SMB spending on IT products and services amounts to $152B annually, almost half of the global IT spending. Such a large target means one of the most cost-effective ways to be successful is by leveraging channel partnerships.
2. Your product or service is not a stand-alone offering.
Your offering requires other products, services, or companies to deliver a more complete solution. These integration services are provided by end customer connected integrators, the channel.
3. Your growth strategy includes opening new geographies.
According to CompTIA research, outside of North America, the channel and indirect business models represent 80% of the IT industry. Hiring and managing direct sales organizations in remote geographies is a complex and expensive proposition. If your strategy is to build international business, then partnerships should be part of your plan.
4. Your growth strategy includes new vertical markets.
The right channel partnerships can help you navigate new verticals and micro verticals – the sub vertical within an industry i.e. physician’s offices, medical clinics within healthcare. These specialized channel partners know the market and know the relevant applications. Leveraging partners for these micro verticals allows them to reach the client base fast and build a stronger and more differentiated value offering for the client base.
5. Your product/service is bought by a Line of Business executive, outside of IT.
According to a study by IDC, 61% of the current IT projects are funded by Line of Business (LoB) buyers. CompTIA Advisory Boards indicate that Line of Business decision makers are purchasing many of the SaaS applications within developed markets. Decision makers for LoB applications include marketing, finance, or security teams. Because of the channel’s knowledge of the end client organizations and their decision-making process, channel partners may get to decision and implementation faster and more economically.
Each of these scenarios define using the technology channel to reach segmented and targeted end users. The channel strategy defines the targets, the preferred channel partner profiles and the programs needed to create the behavior leading to sustainable revenues.
For more on this topic, download our free e-book, “Quick Start Guide to Building a Channel Strategy.” It is full of ideas, guides and formulas for building a robust channel.
