Why does the Channel think Vendors don’t care?

February 1, 2008

“Everything is just fine!”I just got back from moderating two interesting workshops at DISTREE XXL 2008 in Barcelona, an event where vendors from around the world get to meet distributors from 80 countries.

One of the workshops I ran was a discussion about how an increasing number of vendors, both manfacturers and software vendors are trying to convince their channel partners to sell Services as a Product. As usual, one of the participants was particularly outspoken and had strong opinions on everything, smothering the group with his views. In particular, he seemed convinced that the software publisher (whose name I will withold) represented by a young lady who had flown all the way from the northwest of the USA (get the clue?…) absolutely didn’t care about the channel.

It so happens the reason a significant number of representatives of this vendor were present was precisely to have discussions with as many channel partners as possible to find out how they should develop new Services sold WITH and THROUGH the Channel.

For having spent many years managing Channel operations with major vendors (and many additional years advising vendors on how they can better work with their partners), I know only too well that vendors don’t hate the channel! On the contrary, they seek their feedback, their partnership (and for once, that word really qualifies) to grow business in a mutually beneficial manner.

Pushing Vendors away results in the vendors having to find new solutions and if your Channel doesn’t want to work with you, there aren’t that many other solutions to sell your products to the end user than to go direct or build a new Channel.

At a time when large companies are looking at the financial world melt away like an iceberg (remember…90% is not visible), when emerging markets and countries are going to need to bail us out as we start sinking, vendor survival is becoming increasingly dependant on the Small and Medium Businesses of the world. SME and “Mid Market” businesses rely on their IT Partners, namely the Channel who are in this case their outsourced IT department. Vendors know this only too well and when they tell the Channel they want to work with them, the Channel should listen and not push them away.

Of course, there are clumsy vendors, of course there are stupid territory account managers, but it is too easy and too dangerous to blame a vendor with trying to cheat the channel. Exactly like with the world economy, we are all in the same boat and the channel should not ignore the vendors just because they are big…we all need each other, its called a symbiosis.

Should Carlsberg get a prize for innovative marketing?

December 3, 2007


Carlsberg seem to be specializing in alternative marketing. Last August, they littered the streets of London with £5,000 worth of £10 and £20 banknotes with a sticker on them saying “Carlsberg don’t do litter. But if they did it would probably be the best litter in the world“. Click here to check it out!

  • Cost: 400 green stickers, someone to chuck bank notes on the pavement and £5,000 worth of banknotes.
  • Result: certainly hundreds of thousands of people (if not millions) talking about Carlsberg.

The other day, I received a “Gift” from a Facebook pal: it was a picture of a bottle of Carlsberg. Of course, it was posted to my Funwall, and everyone found it great fun and the bottle certainly started circulating at hyper-speed round the Facebook-world.

  • Cost: you name it! one photo, 10 minutes on Photoshop to turn it into just the bottle, AND THAT’S ALL. We all did the rest!
  • Result: …how many people have a Facebook account these days?

Clever!…sounds like beer makes you smarter!

USB Wine…a revolutionary wine distribution system ;-D)

November 30, 2007

usb-wine.jpgJust found this on the web: USB Wine

USB Wine, download wine straight from the vineyards !
Uploaded by zs2creative

The concept is brilliant, not sure it will work on my laptop because of the limited volume, but I might still be able to download half bottles. I wonder whether this concept could be applied to other products such as paint, toner, maybe even diesel oil or gas?

Try it, you’ll like it, sorry the video is in French, but then, who else could have designed a USB Wine tap! in fact, the story behind the video is real: if you ask to test a download, you will be taken to the Web site of n Internet Wine Boutique…

Smart eh…!

Is the I.T. channel suffering from the E.T. syndrome?

November 29, 2007

human-touch.jpg For many years (ever since I saw the film E.T.) I have believed that distance makes people more aware of what is going on back “home”.

As a Reseller (some say Partner), when you are exposed to the daily difficulties and dangers of life in the “Field”, trying to sell the right solution to your customer, you quickly become painfully aware of what your favorite Vendors should be doing to make you want to sell more of their products.

The frustrating part is that although you have often spent time and energy explaining these simple things to the Vendor’s Channel management team, you are either faced with empathy (and therefore frustration because your contacts cannot help you due to the bureaucratic nature of today’s global channel programmes) or a clear lack of understanding of what seems so simple to you.

As Channel Consultants, we then get hired to tell our Clients what they have already been told by their Partners:

  • Channel Partners don’t all want Leads if they’re not qualified – but some do
  • They don’t all want rebates (as opposed to upfront discount) but some do
  • They don’t all want the Vendor to get involved with their customers – but some do
  • They don’t all want to be able to service the Vendor’s products – but some do
  • They don’t all want online sales training that takes their sales people off the road for 15 hours per month – but some do
  • …etc…
  • …etc…

Do you get the picture? Abraham Maslow, a famous motivational theorist once commented: “If the only tool you have is a hammer, you will see every problem as a nail.” We’ve all heard that one before…

So where did I get this E.T. thing from? Very simple: Vendor’s “Partners” often feel like E.T.: they feel they have been abandoned out in the field, they have been trying to phone home but just can’t get through to someone who will hear them out.

These days, any FMCG Marketing company is capable of sending a personalized direct mail piece to each one of 25,000 households in a database but our Channel Marketing organizations still seem to be trying to cram square channel pegs into round channel program holes, relentlessly applying Henry Ford’s famous “…you can have the Ford T in any color as long as its black…”

Instead of using the phenomenal power and flexibility provided by the hardware and software designed by our own industry, we are regressing, taking people out of the field to reduce costs, thus eliminating the only flexible stage of our relationship with our Channel Partners.

So is everybody doing it wrong? Thankfully not, but when you start probing your partners about who does it right, the same names always come up. And what they are doing is pretty basic: the empower the people who listen to what the Channel wants and they design sufficiently flexible programs and processes to delight more Channel Partners who can pick and choose what they like.


If your processes suck, blame the customer…or how to upset a loyal customer…before finally addressing the situation in a very professional way (amended 19th July 2007)

June 29, 2007

badday.jpgIn the last three years, I have probably rented 40 cars per year from Hertz and therefore belong to the Gold “President’s Circle” (it did make a difference when I got called by one of their their European Customer Services Team Leaders).

A few months ago, upon returning a rental car, I was blamed by the Hertz employee for having tried to hide damage to the front bumper by painting it over with a blue (remember this colour, it comes back later) felt pen. I was allowed nastly looks, cynical mumblings and was absolutely outraged since not only would I never have envisaged doing something like that but I also had no responsibility in the said damage. I got stung for 148.15 Pounds Sterling to repair and repaint a scratch I had absolutely nothing to do with.

This week like many others, I picked up a car from Hertz at an airport station. I got the keys, was told the car had been checked and had no damage and scrambled to where it was parked. The globally-warmed Euro-tropical rain was pouring as usual and I tried to inspect the car for scratches but how do you see anything on a black car when it is raining!

After driving 180 miles I parked the car (still raining) and checked into my hotel. The morning weather was no better and I drove to my appointment. Somehow, the sun came out during the morning and when I got back to the car at 2.00 PM, I noticed what looked like a smudge above one of the headlights. It was tacky and seemed to partly cover some very fine scratches (did somebody use a ScotchBrite on the coachwork?). I immediately called the Hertz station to report the problem and was given the “Party Line”: “Sir, you have until 12 noon to report damage…it is now 2pm, you are too late, I cannot record this damage; you will have to work it out when you return the car”. I explained the whole weather story but it simply felt like hitting a brick wall. The lady finally asked me whether I actually wanted to report something and although I told her I thought Hertz might then use that information to blame me, I did report the scratch

When I returned the car, the guy asked me a lot of questions: was it a long term rental, did I have a SatNav, etc…I realised afterwards that this was because he had a note on his handheld terminal but didn’t know what the note was about. He checked the car, didn’t see the smear and scratches and asked me to go to the station to get my receipt. At the counter, I was told that there was a note that I had reported a scratch but that since the car had just been checked it seemed OK.

That car was made available to me with an unreported scratch and has probably already been rented again by a new unsuspecting customer who is at risk of being blamed for something he has nothing to do with. Ultimately, some poor guy will get caught and will pay for the repairs. Hertz won’t…now to my point about weak processes and policies:

At Heathrow, Hertz’s main competitor (they try harder) has a floodlit and sheltered area at the car park exit, where a person inspects the car with you, signs the manifest with you and only then opens the barrier. There can be no argument. I suggested this in my first letter but probably wasted the ink, paper and stamp.

Another suggestion I made was to impact the employees when a customer reports damage they missed. There could be a bonus for the guy who never misses a dent or a scratch.

But that would be too simple, it would mean they couldn’t blame the customer and get him to pay for the repair. How many times do you think it will take someone before they move to the people who try harder?

Great Customer Service is the ONLY differentiator when you are in the services business. That means you should at least try not to question the good faith of your most loyal customers. They are your evangelists, your influencers…don’t screw with them, or they’ll vote with their feet and tell the world about it.

19th July 2007:

hearts.jpgWell…a few days ago, Hertz Europe contacted me because they had seen this Blog. I had a very constructive conversation with the lady who called me and I explained that I didn’t hate Hertz (I really do find they generally offer great service at a good price) but since my day job is about enhancing customer experience and relationships through better processes, it was evident to me that there was definitely something rotten in the Kingdom of Hertz (by the way, Hertz means Heart in German and I felt rather like Alice in Wonderland saying the roses weren’t red-or was it blue– when they were being painted to please the Queen of Hertz…sorry…Hearts!!!).

To cut a long story short, I provided the lady with as much information as I could and we found that the situation was even more complex than I had assumed. She called me today to say that she had requested a refund and apologized profusely for the way things had been handled.

monkey-looks-up.jpgI promised I would amend the above post to reflect the full story and wished her good luck in improving what is (was?) clearly a weak link in Hertz’s generally outstanding organisation.

I can only say that I am impatient to see the changes Hertz will make to the whole damage assessment process and I know they will find that whatever investments they make will result in a strongly improved customer experience and more profitable business.

Janice, Hertz Europe can thank you for handling this situation extremely well. Lets both hope that your findings result in the necessary improvements.

Why is it easier for Dell to run Influencer Marketing activities?

June 24, 2007

In an indirect channel model, Influencer Marketing is hard work. The main problem for Vendors selling through an indirect channel is that they are not actually in any form of business contact with the Influencer. It could be a Consultancy or a System Integrator, but they are not reselling the Vendor’s products, they are not either necessarily in a business relationship with the Reseller or the Distributor.

So how do you reward an influencer for convincing their client to buy a particular Brand? The only way is to write him a cheque and that is where things get difficult. What audit trail do you have? The Influencer says he convinced the customer to buy your stuff, the Reseller invoiced and installed it, the Distributor bought it from the Vendor and shipped it to the Reseller. You now need to convince your Finance department to write a cheque…not easy.

In a direct sales model, companies like Dell actually invoice the End User that was “influenced”. They therefore have direct visibility of the whole business process and can therefore pay a commission to the Influencer who reported the opportunity.

In the Pharmaceutical industry, the influencer is the Doctor (GP) who prescribes one medecine rather than another. And in certain countries, the Pharmaceutical companies monitor the sales of their branded molecules via the pharmacies situated in the vicinity of a medical practice. This gives them a view of which GP is doing a good job at promoting and prescribing their products. They might then invite the most influencial GPs on a study tour of -say- the Seychelles.

In the IT business, Vendors go to a lot of trouble to influence the Influencers. Its tough, but if you crack it, it really does pay off.

Marketing ROI: Beanz Meanz Marketing?

June 15, 2007

This morning, while working on a Best Practice research I am doing for a major ICT company, I interviewed a Country Marketing Manager who told me the EMEA organization were ROI control freaks.

They approve and hand out marketing budgets at the beginning of the year and then throughout the year, they demand that the local managers complete ultra detailed plans and questionnaire in order to approve every action they are trying to implement with their partners.

Well guess what: when we speak top the channel partners of that Vendor, they tell us they can’t understand why the competition’s channel managers seem to have the authority to discuss, design and authorize a joint marketing activity while this Vendor’s people sometimes take months to get the approval.

In the late 19th century, John Wanamaker, the successful Philadelphia retail entrepreneur famously said “I know that half of my advertising is wasted. I just don’t know which half“. What he meant was that you have to live with that lack of real control. I you try and get scientific…guess what…you’ll kill the half that was actually working.

Marketing is about being bold and confident and somewhat analytic. Finance have to trust our ability to design programs, tools and messages that are going to grow market share, mind share and awareness. ROI is making a lot of money for the companies that say they can help calculate and control it…just google “Marketing ROI” and see for yourself.

The IT Channel: Snap Crackle and Pop…or is it Push, Pull and Influence?

June 4, 2007

snap.jpgHave you noticed how the concept of “Channel” is evolving?

A few years ago, the Channel Partner was the-guy-who-actually-got-your-box-to-the-End-User: Distributors, Aggregators, Importers, Resellers, Retailers, etc..It didn’t matter if you produced Hardware or Software, you still had to get a box to your customer. On the other hand, the Channel wasn’t that involved in Services (or just a little).

Application software came as a dozen diskettes (remember the diskette, 8″, 51/4″, 31/2″, POP!) that might contain up to 900 kilobytes each of data (remember the kilobyte?). You would invariably spend half your evening stuffing diskettes into the computer when it asked for more.

Suddenly, the Internet came of age and with it, e-Everything: e-Tailers, e-Commerce, e-Business have now acquired a significant share of the day to day business and with that change, the way we do business has fundamentally changed. When we talk of the IT Channel today, we have to include a whole spectrum of new players. We now dowload 200Mb applications via ADSL connections and pay the license with the company credit card.

Enter the Influencer family: Consultants and System Integrators, Web Integrators, Telecom Resellers, Network Integrators, ISVs, Specialized and Managed Services Companies, are now considered part of the “Channel” (although they rarely deliver a box to an End User).

As a result of this new granularity, designing a good Channel Program has become increasingly complex and now requires us to go well beyond the “Buy one-get one free” (Push) or “Sell loads and get a rebate” (Pull) concepts that seemed to work before. Instead of that, we now have to design Influencer Programs and guess what…when you ship you product through a traditional channel, it’s really tough to convince your CFO you need to pay a guy who says he actually created the opportunity for you! It’s not a rebate or a discount: if he didn’t buy anything from you, it must be a bribe!

But that’s another story and one of these days, we’ll talk about why Dell is still best placed to influence the Influencers.

Backdoor visits: how easy are you to do business with?

May 29, 2007

whouse.jpg Whenever I visit a distributor, I always make sure I pay a visit to the warehouse manager and invite him to show me anything he believes we could improve. If possible, I would ask one of our logistics managers to come with me, provided they can share the same language. Try it if you have never done it before. You will discover the impact of the cost savings policies your company implements without necessarily realizing that the cost is actually only being transfered elsewhere.

Distributors quite rightly represent themselves as a bank and a conveyor belt between the Vendor and the Channel Partner; a direct extension of the Vendor, so when we change the way we package or ship something, we should remember that our logistical extension is going to have to cope with it. They also need to operate efficiently so we should always make sure that our decisions aren’t at the cost of our Channel and that we are always doing what is best for them. Here are just two real life examples:

  • No more packing list! Distributors across Europe started complaining that we were omitting the pallet packing list, costing them additional time to work out what had been delivered. our logistics center confirmed they were being applied as per the procedure…in fact, the new packer in the Dutch warehouse (lots of warehouses in the Netherlands) was 2.10m (6ft 8in) tall (lots of tall people in the Netherlands) and was simply slapping the label on the top of the shrink wrapped pallet where about 1% of the world’s population could see it. A change to the procedure solved the issue.
  • carton1.jpgFinding the colors. I was once told by an angry warehouse manager that they had to open every carton of 8 toner cartridges they received -and they received pallet loads of them every week- each box taken out for the staff to know which color they were to receive in their system.
    • This didn’t seem to make sense until I found that our logistics center was actually re-using old cartons to ship mixed sets of toner.
    • We then found that the cartons had been designed in such a way that once opened, you had absolutely no way of knowing which color was in each box since the markings on the boxes were on the wrong face of the box.
    • Of course, the mixed cartons were never marked as mixed,that would have been far too simple.
    • Finally, we discovered that rather than recommending or enforcing standard quantities (of 8), we were letting our Partners order free multiples. In our western culture, people tend to order metric multiples of 10 or dozens -never multiples of 8. So we always ended up with a mixed carton.

As a result of the strong relationship we built with the logistics teams of our Partners, our Brand became synonymous of ease to do business with. This invariably got back to the senior management of the distributor who would then use their influence to increase their sales of our products. It became a real win-win situation, reducing both our and their cost of doing business.


“He drinks my coffee…”

May 24, 2007



I was talking to a fellow consultant this morning about how few real Channel Account Managers there are in the business.

How many of our CAMs really understand what makes a Partner want to work with one Vendor rather than another. We had a great laugh about a survey I had commissioned a few years ago.

We had asked a Channel agency to find out how we were perceived by our Partners across Europe. When we asked the owner of a key Channel Partner what he thought of his Account Manager, his answer was four words long: “He drinks my coffee…”

This was about 8 years ago and I notice that the coffee business is booming. How many coffee drinkers do you have in your company…?