Influence on the Partnership: Changing the Paradigm in Channel Segmentation

A Question of Fit

How would you rate your approach to channel segmentation? Is it fit for purpose, and empowering partners to deliver the strategic vision? Or has it become increasingly impractical for shaping a rich and dynamic pool of supporting capabilities?

For a growing number of IT vendors, their categorization of partners is no longer meeting the demands of the business. It’s a growing problem, and one that typically begins with the ‘traditional approach’ to segmentation, and a determination to place partners in buckets based on their skills, capabilities, and areas of expertise. Buckets containing distinct labels such as value-added reseller (VAR), systems integrator, or the ubiquitous catch all: ‘solution provider’.

Shifting Partner Profiles

This desire to designate a partner by ‘fit’ may connect nicely with the strategic plan, but it’s also becoming increasingly disconnected from the realities of IT service delivery. To begin with there’s the fact that such definitions don’t necessarily equate with how the partners view themselves. Instead, they will frequently look to mix and merge terms to better address their own specific capabilities and positioning.

Then there are shifting market dynamics to contend with. Forces that require organisations to regularly reimagine themselves and their position within the wider IT ecosystem. Take hardware-centric vendors moving their model to services, software-centric firms embracing the cloud, or even the new channels forming in response to growing interest in the Internet of Things (IoT).

Evolving Business Models

Such change to a company’s offerings and services does of course make it difficult to fit them neatly into traditional channel categories. Take the print market for example, where established VARs focused on ‘shifting tin’ (and providing services ‘close to the box’) are now adapting their model to support higher value application services – such as document management, accounting, and security.

Then there’s the emergence of a new breed of partner, such as those ‘born in the cloud’ who threaten to rip up the rulebook completely. Their business model allows for the provision of end-to-end subscription-based solutions spanning all areas of the technology mix – making them the proverbial square peg in any vendor’s segmentation model.

A World of Influence

So what can be done to address this dilemma? Well, first vendors must accept that ‘old world’ thinking is no longer appropriate. This includes the realisation that vendors are now unable to exert the same level of influence over partners as they once did. In other words they cannot expect to dictate terms, or insist that partners engage with individual programmes based on a ‘forced fit’ that does not benefit them as much as the vendor.

Influence has shifted from being primarily vendor-led to partner-led. Consequently, the tables have turned and partners are now able to hold vendors to account for the overall commercial success of the relationship. In fact, it’s this partner influence that has fast become the key to defining a new paradigm in channel segmentation. Influence that can be arranged into four principle elements, explained in the table below. Elements that relate to the largest enterprise as equally as they do to the smallest SMB partners.

The Confidence to Progress

It’s at this point that certain vendors can lose faith, disengage from the conversation, and choose to stick with what they know and what they’re comfortable with. The factoring in of these ‘partner influence’ elements can feel like a problem too difficult or complicated to solve, and requiring too much heavy lifting to re-cast existing programmes into the new mould. Yet frequently this is not the case, and the reality is that each of these elements are already being addressed by leading vendors in today’s channel environment. What’s more, there are numerous examples where this can be demonstrated.

Take the growing popularity of Deal Registration that has seen the emergence of mechanisms aimed at rewarding partners on their overall influence on the sales cycle: Refer; Co-sell; Resell; Implement. Or using the customer’s satisfaction levels in relation to the partner’s performance as a contributing factor in both certification and confirming partner status. In addition, there’s also a noticeable increase in the use of social media aggregation services to track and rate a partner’s industry footprint.

Delivering Potential

So if these elements are already understood and being explored to varying degrees of success in partner segmentation, the question of course is “where’s the problem?” The answer lies not necessarily with a lack of adoption, but rather with the collective use of all four elements in tandem. This suggests that what’s actually missing is a cohesive way to bring all the elements together under the single ‘Influence on the Partnership’ principle. Only then can we expect to change the paradigm, and to create opportunities for developing more meaningful forward-thinking segmentation frameworks.

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