Danny Deganis bio photo

Danny has been working in indirect channel sales and product marketing since graduating from the University of Toronto in 1993. More than 20 years of this time has been spent developing and selling complex technology solutions in both Canada and United State across a range of technology subject matter areas including data protection and disaster recovery, cloud and hyperconverged infrastructure, software services, and mobile networking technologies. Danny is a proud associate member of the Canadian Channel Chiefs Council.

Written by

Danny Deganis
June 10, 2020

Key Challenges Facing Channel Chiefs in the Post-Pandemic Landscape

Key Challenges Facing Channel Chiefs in the Post-Pandemic Landscape

Technology industry Channel Chiefs are currently facing many challenges as they strive to meet their business objectives, retain experienced staff, and survive amidst the uncertainty caused by the COVID-19 pandemic.   This first segment, of a 2-part blog post, examines some of these challenges while Part – 2 will offer Channel Chiefs some ideas about how they may uncover and capture channel opportunities during these challenging times. 

 

The “New Normal”

Much has been written about the Covid-19 pandemic and the economic impact of the shutdown. As market experts attempt to offer predictive insights about business prospects for the remainder of 2020 and 2021, phrases such as “new normal” have become overused to the point of irritation amongst many in the business community. The term oversimplifies what has become a period of profound pain, change, and anxiety about the future.  

While the technology industry has certainly not been insulated from the economic disruption, the sudden and large-scale move by thousands of organizations to an employee work from home model, at the outset of the pandemic, served as a live proof of concept for several market-leading technologies; vastly accelerating their rate of adoption across a broad range of industry verticals.

Business activity from March through May 2020 appears to suggest that sales of SaaS applications, cloud infrastructure, mobile end-point devices and security, and collaboration applications have fared  well during this period while also providing a revenue boost to for associated products and services.  

Since much of this business activity was a reflexive response to an immediate need in the marketplace, the business outlook for the remainder of 2020 and 2021 remains highly uncertain for industry executives facing a multitude of critical questions and challenges as they attempt to safely reopen and reset their channel operations.

 

Some of the top questions and challenges for industry executives during the COVID-19 pandemic include:

  • How honest and accurate is the current sales pipeline through the end of 2021?  If deals are dropping or pushing into uncertain close dates, how will you fill the top end of the funnel and advance new opportunities towards closure?
  • With hundreds of live events canceled and face-to-face meetings halted, will virtual marketing, webinars, and other collaboration tools fill the void? Have partners and customers already become overwhelmed as every vendor adopts the same tools and approaches?   How will your webinar or Zoom meeting invite stand-out from the other 20 your channel partner or customer received from other suppliers this week?
  • How will Channel Chiefs balance the need to achieve and maintain internal KPIs while balancing their external SLAs for service and support, and customer experience?
  • What are the full range of business consequences and implications associated with moving millions of employees out of office environments to a work from home model?  How do you maintain your competitive advantage with so many variables, restrictions, and disruptions?
  • Do current plans and procedures adequately address the risks to the health, safety, and morale of both returning staff and remote workers? Do they address the likely impact on operations associated with the potential loss of key personnel to illness until a vaccine or cure becomes available?
  • How will vendors meet all their business obligations while customers and partners are working through their own business challenges? 

 

Maintaining Relevance

Maintaining relevance has increasingly been emphasized as a key requirement for vendors within the crowded and ever-changing technology marketplace. One might argue that vendor attributes such as empathy, understanding, and cooperation will increasingly have more weight, in the eyes of solution providers, than traditional factors such as the latest technology.  Solution providers facing desperate and uncertain times can be expected to gravitate toward suppliers that facilitate the necessary leadership, burden-sharing, and engagement to help them survive and thrive.  Business relationships formed during these times of extreme challenge can be expected to strong and enduring.

Vendors, distributors, and master agents can all expect to face increasing demands for assistance from channel partners. Resources such as dedicated account reps, enhanced channel programs, innovative solution financing options, and other critical partner support initiatives will take on a whole new significance for solution providers. Consequently, channel partners can also expect to be called upon to demonstrate much higher levels of commitment to their suppliers in exchange for access to these valuable programs and tools. 

 

Dramatic Consolidation of Channel Partners

North American Channel Sales teams tend to be extremely lean.  Revenue forecast expectations and available channel resources also tend to have an inverse relationship which is generally not in the Channel Partner Account Manager’s (PAM) favor.  This reality makes recruiting and enabling new and existing channel partner relationships a risky proposition for Channel PAMs lacking the time, resources, and necessary skills to effectively devote to these tasks.  

Many vendors have also resigned themselves to passively accept the common notion of Pareto’s 80/20 principle as an immutable natural law.  Sales focus and resources are increasingly concentrated towards Gold and Platinum channel partners who are perceived to have the potential to deliver revenue results.  Vendor PAMs inevitably focus almost exclusively on the largest accounts within their territory as the best chance of hitting plan and surviving to face another quarter.  A common outcome of this reality is that, over time, vendors accumulate a list of hundreds, if not thousands, of partners within their CRM who have not been in contact with a channel salesperson for a year or longer.   Partner recruiting, engagement, and enablement is increasingly being left to Channel Marketing to solve and manage with their growing arsenal of digital marketing tools and techniques which can at times become impersonal, overused and therefore indistinguishable across vendors.  

The rapid pace of consolidation that has been seen within the North American solution provider community is only expected to increase as many firms fail to recover from the global shutdown.  As M&A activity and bankruptcies accelerate, many Vendors will be confronted with the troubling realization that far greater than 80% of channel partner revenue comes from fewer than 20% of activated channel partners – the reality may be much closer to 90/10 or worse for some vendors. 

Channel Chiefs facing this type of scenario might want to rethink the readily accepted notion of the 80/20 rule of channel sales as they develop their plans for the remainder of 2020 and beyond as this not only presents a tremendous risk to their business, but also represents an incredibly lucrative missed opportunity to build significant channel loyalty and revenue from a broader base of actively participating partners. 

 


 

ABOUT CGS CHANNEL PARTNER ENABLEMENT

CGS has been delivering Channel Enablement services for more than 20 years to some of the largest names in the technology industry.  Our teams are comprised of seasoned professionals with decades of channel experience utilizing proven methodologies and tools that consistently achieve annual revenue growth exceeding 30% for our clients.  The information provided here is intended to share the benefit of our knowledge and experience with industry leaders as they work through these challenging economic times.  Learn more about our Channel Partner enablement offering.

Danny Deganis bio photo

Danny has been working in indirect channel sales and product marketing since graduating from the University of Toronto in 1993. More than 20 years of this time has been spent developing and selling complex technology solutions in both Canada and United State across a range of technology subject matter areas including data protection and disaster recovery, cloud and hyperconverged infrastructure, software services, and mobile networking technologies. Danny is a proud associate member of the Canadian Channel Chiefs Council.

Written by

Danny Deganis

BPO study reveals biggest challenges for growing tech companies