Since the beginning of time as we know it, (ie. the invention of software) there has been a great battle called "Competing With The Channel."

The Vendor/Channel relationship seems to logically be a benefit for both the Vendor and the Channel patner. A "Win-Win" as scholars would call it.

HOWEVER, as those who have been involved in Vendor-Channel relations, you know that logical doesn't always pan out. Often times it seems that the channel is competing with the vendor for deals.

Let me take a look at the issue from both the Channels side and the Vendors side. I'll discuss some of the Good, the Bad and a little of the Ugly from both sides. Perhaps giving some insight that may reduce the "channel conflict."

VENDOR - THE GOOD:
A vendor has two ways to sell their product, Direct Sales and Indirect, or Channel sales. The Direct Sales route is more costly, however gives the vendor more control over leads. The vendor sees the channel (indirect) partner as extensive of their "sales" arm.

The vendor offers a solution to customer problems and/or challenges. These offerings would make the channel partner's customers happier and more satisfied.

The vendor has leads/opportunities that they can follow-up on (Direct Sales) or pass to a channel partern (Indirect Sales.) The vendor expects the channel to give the same attention to the prospective lead as they would.

CHANNEL PARTNER - THE GOOD:
Through utilizing the channel, the vendor is able to significantly expand their sales reach. The channel partner is a "local" presence, offering the ability to make on-site customer visits. They also have sales and engineering/support staff.

Channel partners often have a "core" set of customers that are the heart of their business. Through hard work and great service they have earned loyal customers.

Channel partners are always looking for ways to offer more value to these loyal customers. So vendors products can accomplish that. Channel partners also like expanding their business and bringing in new clients.

VENDOR - THE BAD:
Vendors often make the incorrect assumption that the channel can sell their product as well as they can. Forgetting that they themselves have had a lot of training and experience selling their specific product.

Although most channel partners are smart and savey (that's why they are in business)that doesn't mean they become experts in selling a new product overnight.

The vendor tosses a lead or two to the channel partner, sits and waits for a sale, and is often frustrated nothing happens. They figure it is just easier to sell it themselves, and keep the channel out of it.

CHANNEL - THE BAD:
Channel partners are usually innundated with vendors wanting them to sell their products. It can be easy for them to get pulled in many different directions.

They do have good intentions of following up on the leads and approaching their customers with the new solution. However since there are so many things competing for their time, somethings get put on the back burner. Also, since they've had limited experience with the new product, and since it's been several days since the "training", they can't quite remember how to position it, or why it was so cool.

Sometimes the channel partner is activly persuing the lead, but is not taking the time to update the vendor. The vendor persieves lack of response as lack of interest.

THE UGLY
I'm not breaking this out between vendor and channel. It takes both sides to create the "UGLY."

The vendor has not done a good job of training, mentoring and following up with the partner. Therefore, they assume the partner is not interested in selling their product. So rather than sending leads to the channel, the vendor takes them direct and assumes the channel partner will never find out....

The channel partner's customer eventually has an issue that the vendor's solutions solves. The channel partner pitches the solution, only to find out that the vendor has already sold to them....UGLY!

Another scenerio is that the channel partner has been working the customer, just not keeping the vendor updated. Again a customer's need is identified and the channel partner suggests the vendors solution. The customer checks out the vendors website, downloads some information and calls the vendor for pricing.

Sometimes the customer then purchased directly from the vendor OR the customer asks the vendor for pricing. Then they ask the channel partner for pricing.....yes, we have UGLY again.

So what's to be done? How can we limit the Bad and the Ugly? Well, that's a discussion for next time!