We have always observed that people who receive things for free are often not appreciative of it or don’t value the item as much. Nothing could be more obvious than in the B2B Technology Channel. It appears that many, many channel partners do not value ‘free’ leads or even leads that they ‘partially’ pay for. What we observe is “Bad sales reps gone wild”. These sales reps seem to behave in a way that we think reflects how and what they receive for “free” often from OEM’s and distributors that can be less than effective. They demand new leads come from their marketing team but are used to receiving invites into existing customers from OEM’s, or as we refer to them as lay downs. But is this their fault or the way marketers are spending the money and executives incenting their sales team?
For Example, when there isn’t a closed deal in the short term, these reps often demand an explanation when the person has clearly told them that they are just evaluating new options right now. Often we also see distributor sales reps interject themselves into the process as well. They can be characterized typically as account managers who are waiting on VAR’s to develop new business. Anything sold through them, actually leads to them receiving commissions. So as a third party, this creates a lot of challenges for the process because these folks don’t control the marketing dollars needed to help their VARS, but because they are tied to the money they tend to only follow the path to the quickest commission. This leads to them inserting unrealistic goals into the marketing plan and being a constant advocate for the VAR as opposed to helping the overall process to be Win/Win for everyone. We don’t disagree with this, however it can create an unrealistic and/or unnecessary level of engagement and they often try to rewrite the rules midstream. With misalignment come many challenges instead of new revenue generation, the key focus of any demand generation effort.
We recently witnessed a sales team from a channel partner literally sit in their conference room with the manufacturers inside sales team to set them up with meetings. They just had to go through the list of companies they wanted and they would then get free calls from the manufacturer. Wow talk about short term gain and long term pain. What behavior does this set for the long haul? What does this teach the sales team at the VAR? I don’t have to work for it and these guys will always support me? What if they close a bunch of deals or focus on other products, if you aren’t there making calls for them are you now a priority? So the fact that channel partners demand more and more of the OEM and the distributor it doesn’t ultimately line up with everyone being invested and creating a Win/Win situation for everyone.
Bottom line is when you don’t have to work for it or invest in it, and then the value shrinks. However, if you have to give up your own money for it, it may tend to mean more to you. Marketing Development funds can be “Marketing Development funds of mass delusion” in our opinion, at times. . Meaning they aren’t ever used and they collect dust or they are frivolously spent or thrown at projects that are not really valued. This can create long term behaviors that hurt or lead to real sales growth not being achieved, because it wasn’t earned directly by the VAR they sometimes perhaps think of how to spend these dollars in the wrong way. If they truly had to spend their own dollars, perhaps they wouldn’t spend it on a golf tournament or a fancy lunch or better yet a high-priced suite at a ball game.
We encourage marketers and CEO’s/Owners in the channel to think differently. Truly look at how to manage your budgets to allow them to be the most effective. Also, how are you setting your sales teams behavior for now and/or the future? If you guarantee one thing or over promise or approach free dollars as something that is not as valuable as it could be then we think you will have long term challenges with potentially short term gains. We would fall out of our chairs if a CEO/Owner of a VAR actually made their sales team accountable for the appointments, which we develop and more importantly made their reps commission on or the lead which they only partially pay for. That kind of thinking may need to be changed as this process can and is often broken from our perspective.