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Show Us the Money

• Date: 24-02-2009
• By: Jessica Davis

Even in a down year, there are strategies that can help boost the top line and strategies that don't. The question is which one is your vendor using?

Nobody is saying that 2009 is going to be a boom year for IT vendors or IT solution providers. But even in a down year, there are strategies that can help companies pull ahead and then there are strategies that take time and effort without much of a payoff on the top line. The question is which one is your vendor using? And will that strategy ultimately support you in your goals for 2009?

If you look at the initiatives that channel chiefs are talking about as they make the rounds to the channel press in early 2009, not all of them address boosting channel partner sales. For example, it's hard to find a channel chief this year that is not talking about a major refresh of his or her company's partner portal. And while that may help improve efficiency and help partners find information and maybe even help them cut costs, there's no direct correlation to increased sales.

A survey of channel executives commissioned by Blueroads last autumn found that of channel chiefs that focused on deal registration and lead management as their major initiatives, 62 percent reported partner revenue growth.

That compares to channel chiefs that focused on activities such as web portal creation and redesign to automate partner communications and those who focused on improved training and collateral. Blueroads found that only 40 percent of these channel chiefs reported partner revenue growth.

In addition, of channel executives who focused on Web portal-type activities, 20 percent said that they failed in their efforts over the past year. Of those who focused on deal registration and lead management initiatives, zero percent said they failed.

As CXO-level executives look for more performance from their channel organisations in 2009, especially if they try to cut costs by shaving their own direct sales organisations, they are going to be focusing on contributions to the top line. Does your vendor's channel strategy for 2009 focus on building revenues for both of you, does it focus primarily on cost cutting, or does it do a little of both?

And if the rate of channel chief turnover in the recessionary year of 2008 is any indication, channel chiefs may very well be headed for an even wilder ride in 2009 if their channel programs aren't delivering the numbers that the CXOs want to see.

So what are some strategies that are working? Fujitsu and Acer are seeing some success with try-before-you-buy programs of placing solutions at customer sites. Fujitsu reports that 80 percent of those sales are closing.

Other vendors are experimenting with zero-percent financing programs for end users and 60-day floor planning financing for solution providers.

In a year where resources may be even more scarce than usual, it's time to prioritise. And that means asking yourself which of your vendors is setting the right priorities.