Trim your sales, sell away, sell away
If you are a reseller, a value added distributor or even a multinational distributor there are several rules of thumb to consider before you waste your precious margin and points on the swampy ground of marketing and PR.
Don’t trust the vendors to help you out
Our ChannelBiz survey earlier this year showed definitively that companies in the channel want vendors to give them more training and more marketing help. One rule of thumb that is universally acknowledged but seldom spelled out is that you don’t get something for nothing – not in this game. In the so-called ecosystem, it is every man and every woman for himself. Companies in most countries are treated as individuals by the law, and you can be absolutely sure that they act like individuals too, displaying all the traits of self-interest, short-termism, egotism, greed and the rest that we’re all capable of displaying, especially when our backs are up against the wall.
If you’re a channel player, you need to do everything that vendors need to do – meet your sales targets, hit your quarterly numbers, pay your taxes, make a decent margin and incentivise your staff.
There are some vendors that can be trusted – we’ve written about them on ChannelBiz, but the real rule of thumb here is “trust no-one” – or as Intel’s Andy Grove paranoically said: “Only the paranoid survive”. You might be astonished to read this, but if you’re an old hand at this game you know the picture already – vendors will use you, abuse you, will use all the tricks of the East India Company such as “divide and conquer”, and will, generally speaking look at things in terms of the next financial quarter. No five year plan here….
I would like briefly to return to Intel. Let it be clearly understood that the PRs and marketing people at the chip giant are part of the sales group. Used intelligently, PRs and marketing people can seriously grow your business, but never put a) the cart before the horse or b) allow them crazy budgets that they will spend just because they’ve got them. A wise CEO knows how to take the various components of her or his organization and make them all work in unison.
Don’t buy into expensive PR companies
In this section, I am going to give you the benefit of my extensive experience of the channel, of PRs and of the hoops they will put you through. I will be discreet, won’t name any names, but I can assure you that some of these people are still around, and some of them are in very senior positions these days.
A wise CEO – that is to say someone who is not a monomaniac – will avoid the trap of thinking that a very expensive PR will propel him or her into the limelight and get his company on the front page of the Financial Times. I will return to the journalistic side of this in my next section.
Don’t be suckered by highly professional pitches from multinational PRs promising you the earth and demanding huge fees because despite what they may say to you in the pitch, delivering on their promises will not be a piece of cake or a ride in the park. I worked as a marketing guy for a corporate reseller back in the 1980s, when margins were very healthy indeed. The CEO, actually a very wise CEO, decided our company needed PR and delegated that function to the marketing director.
As I’d worked in PR a decade before, I was allowed to sit in on the pitches – as I remember, we had four pitch to us. Two of them were very big PR firms indeed, while the other two were small fry who didn’t promise the earth. The marketing director was suckered into believing that one of the big boys would be more fitting as our agency, seeing as the pitch was so professional – and so on and so forth. The minute he signed the contract – for rather a considerable amount of money per month – we were assigned a junior account manager who floundered trying to deliver any kind of coverage at all. Even Microscope and PC Dealer, big names at the time, wouldn’t bite on any of the releases the big agency put out on our behalf. Let’s face it, which journalist worth his or her salt is going to be interested that a VAD or a VAR or a corporate reseller has started selling a bit of kit, or a bit of software when vendors like HP, IBM, Intel and the like have well oiled machines that put out their own releases on the same products weeks before?
Don’t waste your money on expensive PRs. Know your limitations.
Trust journalists – but only to an extent
It is only the most unscrupulous of journalists who will burn their contacts in the channel and cause death and destruction, loss of jobs, loss of business and the like.
So if you’re approached by a journalist who wants to talk to you about your business or about any other matter, don’t immediately bite and spill the beans. The best kind of journalist nurtures her or his contacts and realizes that one hand helps another, everyone belonging to the same egosystem. The best kind of channel journalist will talk to people and fill them with confidence that their name, their company’s name and their business will not be harmed by any story he or she might write.
In all the many channel stories I have written in my lifetime, only once has someone been fired because of a story I’ve written. In that case, it was because the idiot picked up a copy of PC Dealer, took it to his immediate boss and said hey, it was me that spoke to this journalist. Suicidal behaviour.
People speak to journalists because they have axes to grind. A very senior man at a very big distributor explained to me years ago how the channel worked. He said: “We distributors hate vendors. Vendors hate us because they have to deal with us whether they like it or not. We hate our customers, the resellers, while the resellers despise both us and the vendors.” This harsh truth is worth bearing in mind when you speak to journalists. We are, after all, just people too.
Marketing and marketing collateral
Just like a human athlete, when all the parts of his or her body are working together, guided by intelligence and by passion, results will produce a winning situation.
Have a very clear idea of what you want to achieve from the different parts of your body corporate. Sales people are judged by the targets they hit, and can be considerably assisted by other people in an organization such as marketing folk and modestly paid PRs, whether external or internal.
Say you hold seminars for your customers, for your end users, the people who make buying decisions, the people who buy your kit. The worst thing possible is to pull in a heap of vendors that then just hit the end users with a sales spiel. You must add value with marketing – these people, just like you, have bosses and targets and if they’re going to attend your event, need to be able to justify their attendance in terms of time and of money. Give them something they are not going to get anywhere else.
Deal with your vendors sympathetically, while bearing all the points above in mind. They will support you if you present an intelligence business case and they can see clear benefits from your approach. After all, the vendors have to sell their kit too. When the entire ecosystem doesn’t turn into an egosystem, everyone can benefit from the experience.
ChannelBiz UK has just saved your organisation a lot of money with this How To Guide. Expect more of the same very soon now.