Riding Out The Storm
By Peter Switzer

Riding the financial storm with your channel partners (how vendors and partners optimise their costs and help each other).

As worldwide spending on Information Technology slows, distributors, vendors and value-added resellers (VARs) need to help each other ride through the economic storm. There are times when a crisis can lead to change. The recent economic downturn appears to have caused all parties in the channel to think differently about the concept of collaborating. In the face of a softening of the market, channel partners are discovering that collaboration is the key to finding ways to reach a broader market at a lower cost.
In previous downturns, there’s been a belief that focusing on direct initiatives saves more money than investing in channel relationships. As growth in IT spending once again slows, however, an opposite trend is emerging. The days of being able to grow a product, division or entire company without first enriching others are coming to an end. More vendors are strengthening their channel commitment to attract new partners, increase sales and save money at the same time.

Tough economic times should lead to more communication with SMB customers

During an economic downturn, businesses naturally look to cut costs and leverage existing resources, and this often leaves channel partners feeling discouraged. Even when faced with the cost-cutting measures of SMB customers, channel partners can work together to deliver continuing business, provided the right delivery mechanism for their unique value proposition is in place (the Go-to-market).

Just like every sector of the international economy, SMBs have been hit hard by the recent financial downturn, but where firms close down, others start up. The SMB market is adaptable and can provide limitless opportunities for the channel with continued investment in targeted programmes for the sector.

The keys to effective channel collaboration
Promote the brand of the channel to SMB customers 

While the concept of the channel is often thought of as a big business issue, at its core the channel is made up of small IT resellers who represent the "little guy", small business. Many SMB customers faithfully support and buy from their local resellers, dealers and retailers because of professional association, friendship and social ties.

The well-established growth in the SMB sector is what creates growth in the channel and distribution. A small business that doesn't have an IT person depends on a reseller to sort through all 000that. That's where the channel adds enormous value and why new technologies are driving the growth.

Negotiate for better pricing

It's hard to earn a substantial price break when you're negotiating as a small business.  Working together, the channel could select a few individuals to negotiate on behalf of the entire organisation. Volume purchasing yields better pricing, and assists the channel in realising additional profit.

Partners share
Getting people to change means the difference between the future success or failure of any channel relationship.  Sharing strategies, results and future direction is crucial if any change is to be lasting.  Nobody can buy their way to channel management best practice, there needs to be a shared vision of what channel partners have to accomplish. The most elusive, yet essential element of best practices is getting buy-in from channel partners. 
By collaborating, channel partners are able to educate the public on the value of their brand. The channel gives small businesses the reach required to make contact with the buying public. Through working together to negotiate for better pricing, the channel can achieve greater profit on the newly generated business. 

Prior to collaborating, however, it’s crucial for the channel to communicate. At a time when there is genuine interest in working together, the requirement for change is a really strong reason.

The message to partners right now is to keep focused and think of how their solution can help their customers take costs out of their business to increase productivity to be more competitive. There may be actually no better time than now for partners to start having conversations with their customers. Partners should stick to their core competencies and what they do well. That's how they can be successful.

No matter how tough times are, it’s important to get channels as efficient as possible. Focus on keeping business connected to its channels. Removing process or system-based barriers gives your business the best competitive weapon of all when times are tough: the ability to accurately and rapidly respond to your customers’ needs.