According to our database, 67% of Channel Managers leave their jobs for one reason or another within 3 years. While that number by itself is not a sign of their failure to succeed, it does paint a dismal picture of the channel.
We have been in touch with over 4,000 channel managers over our 25 + years of doing channel development work. We get to see some of the data as to the turnover in these job positions. In many cases they change jobs to advance and in others they are fired. Sometimes, its a wonder why some still have their jobs.
Typically, there is some executive like a VP of Channel or a Channel Chief overlooking the game. In most cases there is a Channel Country Manager and some Regional Channel Managers (a.k.a. Channel Sales Reps, Channel Development or Channel Account Managers). There are also Distributor Channel Managers whose job is to keep the distributors happy. There are also others positions like Channel Marketing Coordinators who I guess coordinate things and somewhat new are the Partner Success Managers. It’s a job category that seems to be redefining itself as the roles of channel marketing change.
Today, the job has mostly to do with sales instead of actual marketing. Some even believe that there is no difference between sales and marketing.
A Channel Manager has 2 primary goals:
- Recruit new channel partners
- Motivate current channel partners to sell more
While these are the fundamental end-goals, how they achieve them has changed. Yet, many Channel Managers still do the same things that they did in the past expecting a different result. You could keep trying to hammer in a square peg into a round hole, but in the end, it will take a lot more effort and the end-result may not be what you want. Many Channel Managers struggle simply because they have not updated their channel thinking for today’s market.
Here are just 5 reasons why they fail:
- Distributor is the only strategy, tactic and program. First I must say that some distributor programs are fantastic! Many are not! Some distributors do a great job! Many do not! If I were a vendor, I would definitely do some marketing with my distributors. Unfortunately, some channel managers still believe that by pouring in all their marketing efforts into their distributors will grow their channel sales. To some degree you could make the case for this, however, market share shifting between distributors is the most common result. Having your products easily available is important but most savvy channel experts know that their investment is more of a pay-to-play distributor tax. They also understand that it is counter productive in the long term when you invest everything into a system that has numerous competitors in the same warehouse. Eventually your sales rep becomes part of the disti-system and perpetuates the dream. That said, distributors do play a vital role in supplying demand and financing the channel partners, although even this role is being challenged with Cloud and related SaaS suppliers. Betting 100% on distribution can be a reason for failure of channel managers.
- A-La-Carte marketing activities. When you cherry pick marketing programs, you have to pick right and you have to also do it right. When only budget dictates the type and level of an activity, it may not be enough to yield the ROI. Sometimes doing too little yields the same result as dong nothing. In the past, Channel News media was used as a primary vehicle for generating awareness and attracting prospects. This has changed dramatically (we know as we also run a news media organization). That said, getting your message into the news media helps in the long run. However, most Channel Managers are under pressure to get instant ROI so they do tend to ignore news media to their long-term peril. Social media is another avenue that Channel Managers are taking, but this is not a replacement for news media and for every two vendors that do social media right, eight are not. In a way, investing in news media is a necessary thing even though you may not see or be able to measure ROI. Many do activities that put them face-to-face with channel partners, which is probably the most important activity that they could do to grow their channel base. Unfortunately, the results are only as strong as your weakest link so if your field sales performance is poor, then your recruitment closing rates will also tank. That said, it’s a good thing anytime you get your company in front of potential partners. Too often, Channel Managers also forget to get feedback from their partners and prospects as to what they could do to improve. They simply do not listen very well. Channel Managers fail when they do not get the right mix and intensity of channel programs.
- Sign and hope. Every heard this before? “Everything you need to do business with us is on our partner portal!” They assume that once they sign up new partners, they can just sit back and the partners will sell. Without proper nurturing of the partners, it will eventually lead to failure. Proper on-boarding of the partner is critical and this process really never ends. Pushing a weak partner to sell your product is most likely bound to fail. Helping your partners to improve their weakness so they can better sell is the correct path to success. However, this is heavy lifting for any Channel Manager so it is something that they typically must ignore. Unfortunately, weak business-practice partners is the main reason why 80% of signed-up partners flat line in sales.
- Build it and they will come. Having a great product is not enough. Having good channel programs is not enough. Having good margins is not enough. Having a good partner portal or mobile app is not enough. Having a cool mission statement is not enough. Having some social media networks is not enough. These are all good to have, but nothing will be as important as getting credible field representative to build relationships and partnerships. If you had to do only one thing, it should be to invest in the right field sales reps. That can make up for a lot of shortfalls. That said, you must support them and feed them new prospects as once they run out of contacts to work, they run out of fuel and motivation to grow. While good sales reps can help their channel partners to sell, remember that they are not marketing experts so without real marketing activities to generate qualified leads, partner sales will eventually stall.
- Channel philosophy is muddy. You have to be clear as to being direct or indirect. If you are a hybrid, your terms of engagement must be clear and verifiable. When you are 100% channel, it encourages partners to believe and therefore motivates them to do more. If this fundamental belief is not present, people tend say one thing and do another. Instead, you will become opportunistic so you only get sales when there is no other choice. These days channel partners understand that protecting their customers is their biggest key to their future. Channel Managers who choose to dance around this topic will not win in the channel. Sure you can spin-doctor this by saying its giving the customer choice, but just ask any partner who have a bad experience with deal registration and you will see the flip side of the story.
Of course there are lots of other activities that Channel Managers do such as prospect list acquisitions, partner communication tools, channel marketing programs, incentives, deal registration, marketing automation etc. This is a very complex and demanding job and most executives never appreciate the true value and hard work that Channel Managers bring to the company. In many cases they are given limited budgets with unrealistic goals that simply end in poor results and frustration. You could also say that a lot of Channel Managers fail because their management failed to properly fund and support their jobs. Channel Managers with a higher level of support from their executive team tend to be more successful.
The high churn in Channel Managers paints a story that I will let you come to your own conclusion. At some point the “marketing” component in Channel Marketing got overshadowed by the need for immediate sales. When you take proper marketing out of the equation, it is more likely that sustainable sales will not come.
Today, channel marketing requires a “buffet” of things to get the job done right. It requires constant innovation to adjust your strategy as the channel changes, twists and turns. Channel managers have a very difficult time in picking which channel programs will be successful. Doing a little bit of everything maybe the same as doing none. Channel Managers who invest smartly and heavily in the right areas usually wins.
After 25 years in building channel businesses, we have seen just about every reason why Channel Managers fail. We also know that next era of the channel development is already here. To help Channel Managers meet this bold new frontier, we are offering something that the industry may have never heard of before. It’s called Channel Marketing-as-a-Service (CMaaS). For a monthly fee, you get the full buffet of things you need to grow your channel partner ecosystem. The only goal is the end-result. Instead of burdening Channel Managers with daunting tasks of constantly evaluating and selecting the right activities based on their budgets, we pick the right programs that will get the job done and we execute with real-time adjustments. We removed the guesswork! We are focused on ROI. We believe this is the future of channel marketing and it’s going to change the way Channel Mangers work and achieve more success!
Ask us how!