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One of the most startling revelations about the channel in this industry is how dysfunctional the lead-generation process is and the hundreds of millions of dollars that are largely wasted on the activity.

For proof positive, all you have to do is take a look at the results of a joint Ziff Davis/BlueRoads study of 215 organizations that found that, on average, vendor-assisted leads only account for about 7 percent of the revenue that solution providers generate.

Unfortunately, only 29 percent of their revenue opportunities are created by generating their own leads, while 24 percent comes via word-of-mouth referrals. The other 40 percent of their revenue is generated from their existing customer base.

The real problem here, of course, is the process that most vendors use to process the leads they generate is broken. For the most part, it takes vendors weeks to qualify a lead. And after they qualify it, they spend another week or so trying to figure out whether they should try to take that opportunity direct or not. The end result is that the leads they then deliver to their solution provider partners stink, thereby running up the cost of sales for solution providers as they chase down bad lead after bad lead in order to comply with some vendor program mandate.

This whole situation exists only because vendors mistakenly feel they need to control the lead-generation process, which means the leads have to go through them so they can justify their marketing programs. In the meantime, 36 percent of the solution providers surveyed in the Ziff Davis/BlueRoads survey said that self sufficiency in the lead-generation process would be better achieved if vendors offered higher margins on deals where the solution provider generated the lead. At the same time, 36 percent said they would welcome more “hands-free” lead-generation campaigns, while 34 percent said they wish vendors would spend more time on lead-generation consulting services.

In the interest of full disclosure, Ziff Davis, the owner of eWeek Channel Insider, provides lead-generation services, most notably in the form of the Ziff Davis Web Buyers’ Guide. This site allows vendors and solution provider to load marketing assets such as white papers, podcasts and videos on a search-friendly site for free. It only charges the people who load their content on the site when they want to download the actual leads generated by the registered users who come to the site.

View the Web Buyers’ Guide here.

The problem at the moment for most solution providers is that the leads generated by these types of services typically go straight to the vendor rather than the channel partners, which could be easily resolved if the vendors provided the marketing assets to the solution providers, who in turn would provide that content to the lead-generation services.

Whatever route is ultimately developed, clearly we need another approach to lead-generation management because the current system is little more than a broken social welfare system where the vendors play the role of inefficient government wasting millions of dollars on inefficient programs that result in the people that program was intended to help getting little to no meaningful assistance.

At the end of the day, we need to reform the current channel welfare system to not only provide better support for solution providers, but to also save the vendors who are collectively wasting billions of dollars on this process from themselves.