As IT vendors announce layoffs and restructurings, there is no better time to be a solution provider—that is, if you are ready to be one of the 20 percent driving 80 percent of sales for a manufacturer.
The 80/20 rule is nothing new, but in this ever-changing economy it is more important than ever to be on the right side of this equation. Just as IT vendors are reducing their labor expenses, they are also looking at the contributions from their channel partners and reducing expenses here as well.
A solution provider that is invested in a manufacturer through certification, online education, program participation and revenue contribution is invaluable and will receive the lion’s share of MDFs (market development funds) and co-op payouts.
Begin with the end in mind
Take a look at your sales for 2008. What products were big producers of revenue and profit for you? What products did not move? Businesses looking to grow in 2009 will need to limit their product mix and focus on revenue-producing items.
Contact your manufacturer’s representative
You can bet that companies are in planning and strategy sessions for 2009 and have an idea about what contributions they need from you. Involve yourself in this process; now is when you can gain information on the MDFs and co-op payouts available in the new year. Level setting expectations for both sides can be invaluable as you move forward.
Review certifications
What certifications really drove revenue for you in 2008, and which ones have yet to pay off? Certifications not only involve an upfront investment in cost and education but an investment in time and resources from your business. Consider all options and, when planning with your manufacturers, be sure to ask what is required for top-tier program payouts.
Know your program participation
Your vendors count on a certain percentage of their solution providers to not participate in the programs offered. Interestingly enough, the top 20 percent of their partners always participate in programs. Knowing your program participation can assist you in discussions with your vendor related to additional funding in 2009. Also, check for errors. While you are filing claims with five to seven vendors, they are receiving hundreds or thousands of claims. Crediting your account for the right participation is not always a given.
Review your product mix
Few manufacturers sell only one product. You often have a choice of products to sell, ranging from low price, low profit to high price, high profit. Manufacturers obviously want you to sell at the higher end of their product line. Do you know what your product mix is? If you are the leader in low product sales, talk with your representative on ways to increase your product mix while still maximizing your profits and revenue.
While there is no recession-proof channel technology or vendor, there are tried-and-true methods to increasing your value and contribution to the manufacturers you choose to include in your customer offerings. Participating in year-end reviews and new year business planning can pay off for you both.
Kathleen A. Martin is a regular columnist for Channel Insider.
She is CEO and founder of RocketComm,
a channel marketing services company.