The customer service experience is changing across all industry sectors. Technology is putting more information and power into the hands of the end user, whose buying journey now starts long before they engage with anyone from a sales team. No matter what we sell or how we sell it, we need to adapt our sales strategies to reflect how our customers want to do business. Nowhere is that more true than in the channel.
In one form or another, channel selling models have been around as long as people have sold things. If it weren’t effective, no one would do it. The power of the channel comes from having more people putting a product or service in front of more customers, to the benefit of everyone in the value chain. What’s changed is the balance of power, and the channel needs to change with it.
The channel is changing because customer service is changing
Research by McKinsey describes how the landscape of customer experience is evolving. The lines between products and services are becoming blurred, and technology has given customers a powerful voice in the purchasing process.
“Today’s consumers do not buy just products or services—more and more, their purchase decisions revolve around buying into an idea and an experience … Given these complexities, the shift also requires an innovative approach to business models and a new look at how companies provide value to customers.”
The data also show that customers will reward stellar service. PwC found that the payoff for providing a great customer experience is tangible: up to a 16% price premium on products and services, plus increased loyalty.
These trends impact our partners profoundly, and the sales cycle looks very different today than it did ten or even five years ago. Similar research by McKinsey found that successful sales teams are investing in the long-term success of their customers.
Adding value doesn’t mean what it used to
At NetApp, we’ve seen this unfold as the channel has evolved. Once upon a time, partners were an extension of a vendor’s sales force, and the partner stood to gain enormously from having the opportunity to sell the vendor’s products. Today, the tables are turned.
We’ve watched NetApp partners evolve and grow from value-added resellers to solution providers that pride themselves on being vendor-agnostic. We have become an extension of their businesses, and we stand to gain as much as they do from our relationship. To the extent that we can add value to what a partner delivers, we put ourselves in better stead to build the long-term relationships that drive success throughout the channel.
What does that mean for the future of channel businesses? It means we need to recognize how our partners’ world is changing, and we must continue to change with it. We have to treat our channel partners the way their customers expect to be treated, and we need to find new ways to add value.
“Dance with the one who brought you”
For companies like NetApp, adding value is about helping loyal partners leverage their strengths by creating new ways to help them evolve and grow. Cloud has opened up new opportunities but not everyone is moving at the same pace. That demands flexibility, as well as products and services that meet a range of needs.
This echoes findings by Canalys, which noted that organizations are embracing digital transformation at different rates, which means they need to constantly adapt their business and sales models. And they’re going to be choosy about whom they work with.
“They will want to work with the vendors that enable them to digitally transform, and in effect, help them enable their customers to navigate the digital transformation journey. But partners will always be driven by the need to grow revenue and stay profitable — and these will remain the most important factors for them when choosing vendors to partner with.”
That’s exactly why NetApp’s partner-first approach was built on our understanding that we do better if our partners succeed. Over 80 percent of our $6B-plus in annual revenues at NetApp are driven by our partners. From our 2018 Partner Profitability Study, we know that partners earn up to $7.41 for every $1 of NetApp product. We also know we need to keep earning that business; we need to show our channel why it’s worthwhile to keep us as a dance partner.
Listen to what the channel is telling you
If you approach your channel business from a partnership perspective, you’ll learn most of what you need to know by listening to what the channel is telling you. For example, by listening to our partners, we learned that they need more ways to stay profitable. That led us to decide that our channel partners will be the primary sales tool for NetApp’s new AFF C190 All Flash Storage Array. In doing so, we are being proactive and enabling our partners to lead with NetApp in new mid-market segments with the same market-leading technology.
There are four key things you can do to enable your channel to be the best extension of yourself:
- Listen to your channel partners: encourage feedback and action it
- Enable them technically: support them with training and development that makes it easy for them to stay on the leading edge
- Enable them to sell: use tools and processes that make it simple for them to do business with you
- Enable them to market: give them products that they can turn into branded services that will help them meet their customers’ needs
Put more simply, get out of their way but be there when they need you. Our partners know their business. They’re the best judge of what they need. With open two-way communication, the channel can deliver exceptional products and services that meet the expectations of today’s customers, to everyone’s benefit.