Poor Vendor Processes Are Eating Into Channel Profitability

There’s a lot of demand surrounding cloud services, which is turn is shifting channel partners’ models. Accordingly, technology suppliers must transform the way they engage with their partners to maintain loyalty, increase sales and maximize profitability in today’s business environment. According to research from Relayware, a SaaS-based provider of partnering automation software, 60 percent of channel partners report that suppliers need to provide better systems and processes to enable higher sales through the channel.

Today, cloud services are profoundly affecting how technology suppliers and their channel partners engage with each other. While many channel partners race to integrate cloud solutions into their portfolios, their supplier vendors are grappling with how to best communicate and collaborate with partners as cloud computing changes the model.

The need to administrate their businesses is taking a toll: Nearly half (47 percent) of partners surveyed have revenue of less than $10 million, but 44 percent reported that they work with more than 15 vendors. Another 36 percent say they work with between six and 15 vendors. With that many systems to juggle, more than half of respondents said that sub-optimal vendor systems are negatively impacting partner profitability. Accordingly, marketing & sales tools, training and support are the top three most important capabilities channel partners want from their primary vendors’ systems.

“At a high level, the results from our research confirms what we expected to hear back from channel partners – cloud technology is having a major impact on how they do business with their suppliers,” said Relayware CMO Jim Somers. “But what really surprised us was the financial hit that poor systems and automation is having on their bottom line. What’s evident is that vendors who fail to provide the tools partners need to be informed, up-to-date, and responsive will be pushed aside by those that are easier to do business with.”

Further, nearly half report that the number of systems has gone up over past two years, and only 8 percent say the number of systems has gone down. Nearly two-thirds of partners login to their primary vendor’s portal less than once per day.

Interestingly, nearly three out of four partners surveyed believe their primary vendor has the best systems and automation out of the choices they have, with 65 percent saying that their primary vendor’s partner systems do a good job of providing partner support, business intelligence and custom price quotes. Partner loyalty to a vendor is driven heavily by good technical support and short response times, the findings revealed. Half of survey respondents said that their most strategic vendor was one of the four largest business-to-business technology companies (Cisco, Microsoft, HP and Lenovo).

“The relationship between suppliers and their channel partners should be an open two-way street, but frequently it’s not,” said Relayware chief product officer Veronica Brunwin. “In today’s need it now, need it fast world, having just a partner portal is not enough. More channel partners are voting with their feet and choosing suppliers that offer more modern, cloud-based systems that give the real-time support and business intelligence they need, when they need it.”

 

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