Different Channel Partners Means Varying Obstacles

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Different Channel Partners Means Varying Obstacles

Whether I am working with an ITSP (Hosted VoIP provider) or a cloud video conferencing company, the one thing I can count on is that the channel partners will all have different business models.

You can put them in buckets generally, but the fact is that each business model is a different problem or obstacle.

The telecom channel is based on the agent model. Sell our stuff, we pay you a commission, we bill and support the client. When the monthly charge is low (sub $500 per sale) and the sales process is long, will an agent even bother trying to sell it? Will an agent sell services that require network planning or design or pre-sales checklists? Unlikely. Wrong skill set.

Conferencing, Hosted PBX, security and now cloud services have all been minor players in the telecom agent portfolio. How does that change?

Service Providers are still trying to figure that out.

On the other side of the channel are the hardware VARs and integrators. To them, everything is hardware. Their business model demands that hardware (CAPEX) be involved. If you want to sell services, they have to literally be attached to the hardware.

Two very different problems to solve in order to move the needle in the channel. One is how to make it attractive to agents (and easier to sell). The other is how to make the business model work for VARs who have cash flow and sales compensation issues that demand big ticket sales.

Whoever figures the formula out first may just win.

Resellers are a different model altogether. Resellers and MSP's (managed service providers) want a white-label or wholesale service offering. They want to bill and manage the customer. This requires a lot of upfront professional services work, including portal, branding, go-to-market support, planning, training and marketing. All before one dollar of sales is seen.

I think that is why so many service providers like the agent model. Just go sell it -- is so much easier (in theory) that the reseller model. But that model doesn't always work if the channel support is lacking or if the company hasn't figured out how to sell it direct first either.

These are the different sales distribution models that service providers use to sell through channels. Each one is different. Each one has its own set of obstacles that have to be met in order for sales success.

You can't paint the whole channel with the same brush.

Red paint can with brush

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