Photo of Timothy GilbertTimothy Gilbert is an author, speaker and consultant to start-ups and technology companies. He led global marketing and sales for brands like IBM, Kaplan and Toyota. He was named Chief Marketing Officer of the Year for his work in educational technology. Gilbert holds degrees from Johns Hopkins University, Regis University, and the University of Wisconsin-Madison.

Written by

Timothy Gilbert
July 17, 2019

Channel Partners in LATAM: Relationships, Not Technology, Drive Growth

A view of the Chilean skyline with the city and mountains in the background

From Mexico to Chile, Latin America is comprised of 46 countries—each having distinct cultures and needs when it comes to technology. While the gross domestic product (GDP) of Latin America and the Caribbean have grown faster than many other developed nations, the combined GDP of LATAM represents perhaps five or six percent of the global economy. This relatively modest economic footprint, coupled with political instability and sometimes regressive taxes and legislation, have cast shadows on LATAM in the minds of some vendors.

What remains inarguable is LATAM’s vitality as a target for channel partnerships. Each country without exception is trending with increasing urbanization. Major brands continue expanding their distribution and operations throughout the continent. What is more, compared to EMEA or APAC, LATAM’s physical proximity to North America makes entering the market and maintaining a consistent presence more convenient and less costly.

The attraction of Latin America

Meanwhile, Brazil remains the ninth largest economy in the world. Tried and true industries throughout LATAM, like finance and telecom, tend to adopt newer technologies on timelines in step with the United States. This is not to suggest that fintechs should enter LATAM by solely investing in Brazil. Rather, coming to know the nuances of each market within LATAM opens doors to opportunities for vendors large and small, selling leading edge or old school technologies.

From a technology maturity perspective, LATAM on the whole tends to trail the U.S. by two or three years in the adoption of new solutions. Many LATAM channel partners are still transitioning into cloud-based models, away from hardware and software sales. While enterprise customers or banks may pull them forward, the majority of LATAM’s channel partners have some trust issues when it comes to new vendors and new products.

Keep in mind that adoption of cloud-based services significantly lagged behind Europe and North America for nearly half a decade. It was not until Microsoft introduced Office365 that the Value-Added Resellers (VAR), Independent Software Vendors (ISV) and Managed Service Providers (MSP) saw major movement in various business-to-business cloud categories. Giving this example some color, keep in mind that just 22% of Latin Americans had internet access in 2008. In 2018, it had leapfrogged to 56% and is now projected to surpass 61% in the near term.

Channel options: two-tier vs. service providers

Compensating for LATAM’s tendency to warm up to new technology, some vendors skip the two-tier model and seek out major service providers. Giants like Telefónica and América Móvil deliver hosting and other services in multiple countries. Vendors successful in making a business case to one of these large telecoms can bundle their solutions and sell through the telecoms.

But solutions of complexity—like enterprise applications or more involved cybersecurity solutions—are best represented by one of the many boutique channel partners to be found in LATAM. While a large Internet Service Provider (ISP), like Telefónica, can make an incredible splash and rapid penetration, a specialized business intelligence suite for import-export firms, for example, would have no place in their stack.

For those with more involved technology, it will be specialists and experts on the ground in cities like Bogotá or Santiago who know the particular needs of their regions. Anyone having conducted business in LATAM also will confirm that the trust built during long-term relationships by partners like these are sewn into the fabric of both the business and personal sides of things. So, if your new marketing technology widget requires special configurations unique to a region’s culture, regulation, taxes, and so forth, the way business really gets done can be very country- and city-specific. It may be best to secure a well-established partner, even if they are smaller and you have to find several to cover the territories.

International relations 101

From the channel partner’s perspective, those issues of trust and relationships can be critical to vendor success. Any channel partner worth their salt will want and need to hear (and soon see) that you are not just sticking a toe in the waters of LATAM.

They will ask questions or relate stories about the investments they make in new partnerships, the red carpets (and red tape), and the other techniques they have deployed to navigate the politics or ups and downs of their economies. This is not so much storytelling; the bottom line is that the LATAM channel partner cannot afford the risks of plunging into supporting and driving your brand unless you come in neck-deep alongside them.

In fact, more than money, they value your time and authenticity. Are you willing to truly listen and understand what it will take to sell and service in their backyard? The upside can be, if you follow through, purchasing trends in LATAM are well-known to repeat and persist longer—all to the long-term benefit of trusted business partners and their vendors.

Additional Resouces:

Photo of Timothy GilbertTimothy Gilbert is an author, speaker and consultant to start-ups and technology companies. He led global marketing and sales for brands like IBM, Kaplan and Toyota. He was named Chief Marketing Officer of the Year for his work in educational technology. Gilbert holds degrees from Johns Hopkins University, Regis University, and the University of Wisconsin-Madison.

Written by

Timothy Gilbert

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