A New Strategy for the Channel Sales Leader

A Prescription for a Good Night’s Sleep

Whether you are a channel sales leader or on the leadership team of a VAR, ITSP, or MSP business, the prescriptive approach I’ve outlined below is both relevant and practical. Many of the remedies are hard to palate because change doesn’t come easy. However, I bet Digital Equipment, Blockbuster Video and Kodak would have taken large gulps of the transformation castor oil had they realized that their world was being upended and that they would not survive.

The sad thing is that I’m sure they must have seen some signals that something dramatic was happening in the marketplace. However, like so many times in life, we don’t always believe what we’re seeing and often choose to look away in disbelief.

The sadder thing is that if we simply accepted what we feel in our gut, we would actually know what needs to be done. We just don’t want to admit that we see the early warning signs, and don’t take rigorous action.

Remember, all the companies above believed to their core that they had time to adapt and could quickly pivot and catch-up. It doesn’t matter that things look good right now – the shift in value and importance of subscription-based services is just too compelling to the IT buyer, and things are going to accelerate faster than the industry pundits are predicting.

Change is tough, but having your business erode right before your eyes is a hell of a lot tougher. As mentioned above, the shift in revenue from transaction-based to subscription-based is growing month-over-month and won’t stop shifting – ever. The analysts are saying cloud will be 24% of your customer’s overall IT budget by 2020. I believe it will be closer to 30%!

Sorry, let me step down from my soapbox and get back to prescribing. There’s an approach we’ve seen work hundreds of times and it can be done to scale.

It accelerates partners who move toward the cloud and a recurring revenue business model. In addition, it focuses on business readiness and the leading indicators that are often overlooked.

If the proper leading indicators are understood, measured and acted upon, you can have a segment of your channel partners driving subscription-based services faster than you ever thought possible.

The catch: You’ll need to potentially throw out your playbook, move outside of your comfort zone, and commit to a new approach and framework. Our prescription and approach is fundamentally based on automation and digitization. In most cases, your approach and coverage model cannot scale to deal with the enormity of transforming most of your partners’ business models.

In order to drive the change at the rate and velocity that will be required to ensure you positively impact your top-line recurring and cloud revenue numbers, we prescribe:

  1. Bringing your partners to a Decision Point—are they committed and will they opt-in or out of your program?
  2. Assessing your partners, to scale, to understand their recurring revenue readiness baseline.
  3. Understanding what Gaps exist at the individual and aggregated partner level and what inhibitors are holding them back.
  4. Segmenting your partner base into readiness categories and timelines.
  5. Creating a path, a Plan and a committed timeline to close and eliminate the gaps uncovered.
  6. Providing partners with the tools and resources to transform and make meaningful changes.
  7. Tracking, in near-real time, partner’s progress throughout their transition, so you can enable them on your solution stack at the right time and get them to consistent revenue production.
  8. Delivering various levels of your solution-set designed to allow partners to Map Services they’re capable of selling and delivering, over-time, as they progress up the cloud and recurring revenue maturity curve.

It’s important to mention that most vendors heavy utilize their existing channel account managers to help the partner transform. In most cases these are the same people who are responsible for:

  1. Driving revenue numbers this month, quarter and year
  2. Protecting and keeping the core transactional business in-tact – that’s how they’re incented
  3. Helping the partner deal with exceptions and deal registrations
  4. Etc., Etc, Etc

Why burden them with trying to understand how committed the partner is to move to a recurring revenue friendly model. Understand what gaps exist and how they’ll deal with them, and then finally how long will it take the partner to produce. Oh, by the way, they should do all this in their spare time… See the problem with the current approach and why partners aren’t producing?

An automated and dedicated solution that can operate at scale and perform all the activities above is in order.

In closing, profitable and growing partnerships are the only ones that matter to the vendor, the distributor, and the channel partner. You don’t need all your partners to make the transition now, but you do need a much greater number than you have lined up and identified.

So, create and endorse a new framework that is pointed and surgical in its approach. Once you’ve identified the right partners, align with them and provide them with the support and tools necessary to make the recurring revenue journey with you.

None of this assures you of a restful night of sleep, but altering your approach may give you the peace of mind that doesn’t make you sit-up in the deep of the night wondering how you’re going to cross the cloud and recurring revenue chasm. Here’s to no more night sweats!

Keep Calm and Cloud On…

About the author

George Mellor

George Mellor is the Founder & CEO of KloudReadiness, LLC. Prior to founding KloudReadiness, George co-founded VARcompliance (acquired by Netformx). George has spent his adult life working within the value added reseller and solution provider marketplace driving innovative approaches that positively affected the growth and profitability of several businesses. He’s held senior leadership roles at several solution providers including CBE Technologies, Netivity Solutions (now NWN Corporation) and Charter Systems.

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