Better Leads Make Better Channels

Every where you go these days in the channel, you hear the same refrain from the vendors: we’re looking for a better class of partners.

What that means is that most of them are not really all that interested in recruiting more partners in volume. Instead, what they really want to do is pick off a few of they key partners that drive the most amount of profit and revenue for their rivals.

Alas, not many of them are willing to do much more than make a few phone calls in the hopes that somebody will take a meeting because they are annoyed enough with one of their rivals to sit through a pitch.

As a result, most of channel management teams within the vendor community spend their days restructuring their portals, tidying up their training programs and managing the allocation of market development funds. What very few of them actually do, much to the chagrin of their partners, is figure out how to create an effective lead generation system for their partners.

In a nutshell, that pretty much summarizes the conclusions of study of channel chiefs conducted by Blueroads, which makes partner management software that it wants vendors to invest in. The core of the Blueroads argument is that investments in systems that manage leads and deal registration programs is time and money that is a whole lot better spent than all the money that goes into corporate portal upgrades.

That all might be true except for the fact that the vast majority of vendors don’t have any effective process in place for generating leads in the first. Therefore, automating a process that doesn’t have a whole lot rational structure underneath it is somewhat hard to justify.

That brings us to the crux of the problem. As the economy continues to soften, vendors will want to rely of channel partners more than ever to find and close new deals. But what partners want most from vendors are quality leads. According to the Channel Insider 2008 Midyear Outlook survey of economic and market influences on the channel, solution providers say more leads and better leads rank second and third behind technologies with higher margins as the vendor support they need to grow business.

The vast majority of the leads that come in, however, were created by a telemarketing company that asked four or five basic questions in a two-minute phone call. Those leads are then passed back through the corporate marketing department, which then passes them over to sales for review. After the direct sales force is done cherry picking the best leads, the remnants are usually passed on to the channel. You can imagine how hot those leads must really be by then. Of course, this all assumes that the vendor has any real capability to manage whatever leads come, which surprisingly is not that case in some of the biggest name companies in our industry.

Given this all too common scenario, it’s little wonder that vendors are having a hard time recruiting quality partners. They do next to nothing to help them actually sell anything, so it becomes almost impossible to justify the cost of switching from one vendor to another unless the incumbent vendor really screws up on product quality or pricing.

The good news is that process associated with generating quality leads is improving, even as those leads become harder to come by. But the vendors have done very little to keep pace in terms of developing this critical business skills and we all know that channel chiefs are sometime two to three times removed from the lead generation process itself.

What all this means is that not only can vendors not find quality partners to recruit; they can’t even develop their own set of quality partners. None of this ever going to change until the vendors look within their own sales organizations to come to terms with the real problem. What’s required is a strategic approach to sales management that truly values the channel as something that needs to be enhanced as opposed to simply maintained. So unless that channel organization is focused on driving leads to partners, it’s basically little more than a partner maintenance operation.

Mike Vizard is a member of the Ziff Davis Enterprise Market Experts group and regular columnist to Channel Insider. He can be reached at michael.vizard@ziffdavisenterprise.com.