Channel Conflict Still Rampant, Partners Say

Got a complaint about how your vendor deals with channel partners? Get in line.

A new channel performance study gives vendors a failing grade when it comes to how they drive business through their channel partner programs. The study, the Channel Performance Outlook Study, compiled the opinions of 500 indirect channel sales executives, distributors, resellers and other channel representatives. It was conducted by the CMO (Chief Marketing Officer) Council and commissioned by BlueRoads.

Channel partner complaints included lean lead rates, unqualified opportunities and ineffective marketing campaigns. Partners also cited ongoing channel conflict and minimal, if any, cooperation between channel and field marketing groups.

"There’s a lack of trust that exists," said Dave Murray, executive vice president at the CMO Council. "Often that lack of trust centers around the customer and who owns the customer."

Murray said the study showed that 70 percent of resellers surveyed across a number of industry sectors did not find vendor marketing effective.

"That’s a pretty damning data point there," he said.

Among the study’s other findings:

• Less than 7 percent of resellers say vendors are their most valuable source of leads
• Only 19 percent said vendor leads were highly actionable
• A full 46 percent say vendor field marketing reps never or infrequently team with them in cooperative selling
• Nearly 40 percent of resellers say they experienced significant, or at least some, conflict or competition with vendor sales organizations.

Around the issue of leads, Charles Watson, vice president of marketing and sales at BlueRoads, said that many vendors believe they are doing a good job with providing the channel with leads when the reality is actually quite different.

Watson said that at a recent conference, a woman from a reseller company, who described her relationship with the vendor as "good," recounted how that vendor’s marketing organization gives leads to the direct sales team first. The direct sales team then skims the best ones and the rest go to the channel.

"That’s really common," Watson said, "even when companies feel like the channel relationship is OK. But the thing that happens is channel partners get the C and D and E level leads, and when they try to convert those opportunities, there are no opportunities there."

Watson and BlueRoads advocate a more equitable approach, starting from the top down.

"Until the head of the direct sales team and the channel chief are true peers and treated with equal weight in the organization, everything else is just about the mechanics of running the channel but without ever solving those harder problems," Watson said. "The channel is treated as an afterthought."