As the Internet continues to play havoc with the traditional IT sales process, resellers are discovering a hard truth. Customers are flocking to interactive Web 2.0 communities being introduced by their vendors, downloading vendor videos from YouTube, “friending” their vendors on Facebook, and following their vendors on Twitter. Lured by the popularity of social media sites and the proficiency in which many vendors are starting to develop direct customer relationships, resellers are finding that the informational cord that used to bind them tightly to their customers has been severed.
From a market perspective, this is happening for all the right reasons. Customers get huge benefits by meeting their vendors on-line: better access to information, peer-to-peer networking, faster problem resolution, and easier vetting of new products and services. Besides, what is their alternative? All they can do with their resellers is find a website , download a data sheet, and call their sales rep for more information; a very time consuming process in today’s hyperactive marketplace.
If they are going to survive, resellers need to take a hard look at their on-line capabilities and vendors have to help. Let’s start with the basics – reseller websites.
Original web 1.0 websites are static and one-dimensional. They were meant to be used by people who were just learning the basics of email, internet, and on-line communications. These websites use “frames” to display documents and files that could (originally) be downloaded over dial-up lines and visitors (customers) were expected to download the information and then leave the site. Today there are more than 100 million of Web 1.0 sites, many of them set up and managed by channel partners. They look outdated and are difficult to use. Outdated web sites are slowly suffocating the channel as vendors just watch their resellers struggle.
Many vendors have moved to next generation web 2.0 websites, which allow visitors to do more than retrieve information. These sites are interactive, interconnected, and multi-dimensional. Their goal is to engage customers (stickiness), to give AND receive information through blogs, wikis, forums, RSS feeds, videos, social networking and more. They engage customers and satisfy more of their needs. Many web 2.0 sites have already evolved into full-blown communities, managed by the new Social Media organizations of IT vendors.
Customer buying behavior has changed a lot since resellers created first their web sites a decade or more ago. Purchasers are now in social media sites, getting product information, educating themselves about vendors, and comparing prices before resellers even know that a sales opportunity exists. Many end users even expect to purchase their products on-line and have them shipped without dealing with a salesperson at all! In other words, a significant (and growing) percentage of the market has moved into an interactive world that makes one-dimensional Web 1.0 reseller sites irrelevant and even annoying.
According to recent Channels of the Future research, SMB resellers give their own web sites a lowly 4.08 rating (out of ten) as to their effectiveness as a marketing or sales tool. Most reseller web sites are still lacking basic web site features like RSS feeds, blogs, wikis, or even forums. In fact, less than 14% of resellers have incorporated any Web 2.0 functionality at all! To make it worse, reseller employees are personally using Web 2.0 tools like social/business networking, blogging, and virtual communities much less than people working for IT vendor companies. The eventual result: resellers are increasingly absent from the sales conversation and vendors are moving ahead to build direct marketing relationships with their end-user customer base. Can direct (on-line) product sales from vendors or aggregators be far behind?
Channel Partners that cannot conduct their own on-line dialogue with customers are allowing their vendors to suck the air their marketing opportunities. The result, a slow death for channel partners.
Michael Dubrall is the Managing Director of Gilwell Group, a research and consulting company that researches “Channels of the Future.” He is a regular contributor to Channel Champion and other industry blogs on the subject of next generation partnerships. Join the Channels of the Future group on LinkedIn and visit www.gilwellgroup.com.