Dylan Charles, a guest writer for eWeek's Channel Insider, recently commented on some of the changing dynamics occurring in the computer reseller channel in an article titled, "Where did all of the VARs go?" He stated that:

1.  "According to a recent State of the Channel survey conducted jointly by Ziff Davis Enterprise, publisher of Channel Insider, and Crimson Consulting Group, a full two-thirds of solution providers' revenue is now coming from services..."
2. "As part of the movement away from a technology-centric strategy, solution providers are no longer selling only into the IT organization-today they target business decision makers first"
3. "Participants in the solution provider survey also indicated that among all of their company's business objectives, increasing new customer revenue was the most important. Yet, most admit that while technical acumen and services delivery are their company's strong points, marketing ranked last in the list." despite that fact that "...two-thirds of solution providers in the survey indicating that they generate more than half of their revenues from their top three customers"

While the article does a good job pointing out the problem, let's just say we disagree with how to solve it.  The article suggests that sales will increase if more leads are generated by marketing. While this might help, it typically doesn't move the needle. That's because the top 20% of sales reps in the channel will be able to close at least some of them. However, the real problem is sales execution for the other 80% of the reps.

Let's face it, as a manufacturer, there are two primary strategies for improving channel sales. One strategy is to increase the number of channel partners within a particular market and by leveraging the efforts of the top 20% of the resellers sales force, manufacturers will see a bump in sales. Dell's recent announcements and strategy are indicative of this proven approach.

The second strategy focuses on improving the sales execution and performance of existing channels. Barry Winer and Gerhard Gschwandiner point out a critical point in a their recent article "Winning Formula" in Selling Power Magazine (October 2007) where the core 60% of any sales force (including channels) represents the greatest opportunity for boosting sales performance. Most channel executives would agree, but the question is how? The answer is surprisingly simple, though a bit more difficult to execute in the channel....as Figure 1 below illustrates.

Figure 1:

Most manufacturers turn to "training" the channel to solve the problem. Sales, like most disciplines, is about developing and executing a repeatable process that can be measured and improved upon. Most manufacturers are trying to help there channel through product training tied to value propositions. Others have gone so far as to offer "sales process" training and tools from some of the leading companies in the field. However, core sales performers can not execute either one because of two key reasons. First, most core sales performers are not able to contextualize the link betwe      en value propositions and the sales process together. Therefore, the information, while understood in the training room, is not executed properly in the field by core performers.  Secondly, most sales managers in the channel (and direct for that matter) are not very good at coaching and developing reps in general. Most front line sales managers are top performing reps who were promoted to a position that requires additional and different skills than what made them successful as a rep.

To be successful, manufacturers must help their channels build go beyond training by developing sales cultures around a repeatable and measurable process. It's true that this is a boundary that has rarely been crossed in the past. However, there are leading manufacturers who are successfully achieving this and if you want to solve the problem of getting the channel to sell more, it makes sense that you fix the root cause first before wasting money on marketing and lead generation programs that will never be executed properly in the field.