Why Most Channel Marketing Portals are Strategically Flawed

About this blog: This blog was first written in 2016 and has been updated in 2018 to reflect recent changes in the way we approach marketing. However, much of what we wrote in 2016 is still relevant today.

Vendor Centric Marketing

Most channel marketing automation systems are vendor centric.

They have been developed for vendors, to be purchased by vendors and do not serve the best interest of resellers, and ultimately they do not work for vendors either.

This reality is only going to get worse, as we will explain later.

The channel marketing story a while ago

Practically every major IT Vendor has a marketing automation system, which depending on your view, they either use to generate and nurture leads until they are “sales ready” or they use as an automated way and thus convenient way for them to engage in mass marketing, ie: SPAM.

Every IT Vendor with a reseller channel wants their resellers to have the ability to generate high quality leads, which is why Marketing Development Funds (MDF) were created.

Some IT vendors have made the connection and started to ask the question: “If our resellers were using marketing automation then surely they would generate more leads for themselves, which means more business for both of us”.

Bravo. You can see how this line of thinking made sense at the time, but this where things got unstuck.

In order to make this happen, some in the vendor community have turned to portal-based channel marketing automation systems that are vendor specific. This is how they work:

The vendor creates a series of campaigns (nearly always based around emails). The content is naturally related to the vendors’ products and the branding mostly has the look and feel of the vendor (with the resellers logo sometimes included on the top right of the email in a rather tokenistic way).

Now that the system is set up, all that is required is for the reseller to upload their customer and prospect data to the system, self-publish the campaigns they want to run, press go and there you have it – a channel marketing automation solution.

So, what’s wrong with that?

What’s wrong with this approach is that it doesn’t actually work very well; certainly not in terms of driving business growth.

If you are an IT Vendor with a subscription to one of these portal-based channel marketing systems then the fact that this approach doesn’t work is going to resonate with you, simply because you know that so few of your resellers use your marketing portal. But you may still be wondering why.

This is the answer: Such an approach is fundamentally flawed because it is not in the best interest of the resellers. Why? Here are 5 powerful reasons:

Reason 1: Resellers want to keep their marketing data in one marketing system

The reality is that most resellers represent multiple vendors and they need marketing programs that promote all the vendors they represent. Portal based, vendor centric, channel marketing systems fail to recognise this reality and are only built around a single vendor, when they should be able to manage campaigns from multiple vendors.

With these single vendor systems, the resellers are therefore obliged to copy their data into multiple vendor systems. This causes all sorts of problems including: emails being sent on different topics to the same prospects too frequently, people unsubscribing in one system then needing to be unsubscribed from another system and contact data modified in one system is not reflected in another. Because there is no “one version” of the marketing truth, it becomes a mess. The resellers know this, which is one reason why they are reluctant to put their best data into these vendor centric systems.

One way to solve the problem would be to give the resellers access to a powerful marketing system and allow them to use it for ALL their marketing programs at no cost. The StrategyMix Marketing system does this. Channel marketing portals do not.

A second reason why vendors can be reluctant to provide their best data is due to perceptions of data security. These portal-based systems are heavily vendor branded, so they look like a vendor system, rather than the resellers own marketing system. This can put resellers off because they worry that their best data might inadvertently fall into the wrong hands – those of other resellers with whom they compete. This is a legitimate concern. It has happened in the past.

Reason 2: Reseller Branding

Most resellers value their brand and their independence, so they want all their communications to look like their own – and not the vendor’s.

This is because most resellers want to position themselves as independent, trusted advisors who can be relied on by their customers to only sell “best of breed” solutions. They do not want to be seen as the puppets of any vendor.

And from a very practical perspective, resellers need to improve their own name recognition in order to establish contact with new prospects. They cannot improve their own brand recognition if their marketing communications are ‘all about’ the vendor. Since the resellers are responsible for making sales, it is they who need to establish contact with the prospects, which is why they need to promote their brand first and not the vendor’s brand.

Reason 3: Reseller Lack of Resources

The self-service model, which is at the heart of portal-based channel marketing systems, is itself a flawed concept simply because most resellers don’t have the resources or time to try to comprehend what they’re supposed to do, decide which campaigns to run and then work out how to set it all up.

So, while they may sign up to such portals, they rarely participate in a consistent way. So, forget self-service.

If the reseller has limited or no marketing resources, then you need a managed marketing process to make it happen, and expensive “Concierge” services, which are overpriced and badly implemented are not the answer.

If, on the other hand, the reseller, does have their own marking resources, then they won’t use the portal because they’d rather use their own system. See Reason 1 – Marketing Systems.

Reason 4: “Digital only” campaigns

The great thing about digital-only campaigns (think vendor white papers) is that they are very easy to setup and run, and relatively cheap because they are based on the mass marketing paradigm of low variable costs (ie: the variable cost of each email is usually zero).

The problem with this approach is the mass marketing paradigm, itself.

It is dying.

Email response rates which have been declining for some time are only going to continue to decline. This is because we all get too many emails of low value and we are too time poor to look at them, so we tend to delete the emails that come from people we don’t know.

This reality has been recently exacerbated, at least in Europe, with the introduction of GDPR.

The question of whether GDPR will finally curtail mass marketing in the channel is an interesting one, which we will address in another post.

Reason 5: The Rise of ABM and Relationship Marketing

As one marketing concept dies, there will always be another that rises up to take its place.

Direct Mail (called Junk Mail by recipients) replaced the door to door salesman.

Digital Marketing (called Spam by recipients) replaced Direct Mail

We believe that Digital Marketing will be replaced by Account-Based Marketing and its natural extension, Relationship Marketing.

If we are right, then this is another reason why Channel Marketing Portals are strategically flawed because they simply do not have the functionality to manage such sophisticated marketing programs.

CONCLUSION

Many IT vendors, including some of the very largest have wasted a lot of time and money buying a product which is strategically and fatally flawed.

The sensible will start to look around for a viable and proven solution.