Who Presents Vendors with the most Lucrative Opportunity: Customers or Channel Partners?
In channel terminology, making the distinction between customers and partners may seem like a rhetorical, irrelevant comparison. But, in fact, there is an objective difference in defining a vendor’s revenue generation model that goes beyond the level of communication, offered incentives, market segment, or geographical location.
To better understand what goes into determining such a contrast, you must first step inside the mind of a vendor.
For vendors, implementation of a consistent and fruitful revenue generation model is primarily the main objective in B2B success. Unsurprisingly, getting to that point is a time-consuming, frustrating and expensive process. The process is an accumulation of trial and error and the ability to efficiently recognize strategies that failed and functioned.
One of the biggest hurdles in defining a vendor’s revenue generation model is determining not only who to sell to but, how to sell. In other words, who presents vendors with the most lucrative opportunity: customers or channel partners?
How to differentiate customers from channel partners in order to implement a revenue generation model
Channel customers become interested in a product based on the justification of price versus value. Customers don’t usually seek to develop verbal or onsite communication with the vendor. Customers also don’t usually participate in joint marketing efforts (other than possible sales incentives or rebate programs).
Short or long term customers may perceive the vendor as a means to fortify their market value as an individual enterprise.
Vendors do their best to understand their business model, consumer base, value proposition, and pain points.
On the other hand, customers find little to no value in better understanding their vendor other than the product or service in which they sell.
Partners become interested in working with a vendor based on the justification that the margin from reselling the product outweighs its initial purchase.
Channel partners work diligently with the vendor to understand both their business model, bottom line, value proposition and internal best practices in go-to-market strategy.
Vendors view partners as an extension of their own business. Additionally, the independent sales team means lower cost in resources and manpower for the vendor.
Vendors work proactively with partners to educate and develop meaningful, tangible connections. In other words, vendors deploy consistent resources to ensure partner has the greatest possible opportunity to profitably and consistent sales. Some vendors build partner portal platforms as a means to transfer, inform, communicate, offer incentive opportunities, store/aggregate data, automate rebate funds, documentation, gamification and digital PDF’s of best practices. Vendors are conscious to avoid the frustration and damaging effect of channel conflict. Therefore, vendors invest in designing robust parameters to mitigate such risks.
There is an objective alignment between partners and vendors. This is an alignment in which strategic communication and business development operations in a cohesive process; a goal of acquiring new opportunities, converting leads, and growing market share via a two-way mindset.