Sell Direct or Indirect: That is the Question

Vendors have a couple choices when it comes to the IT channel. They can sell direct to users or build in value by adding distribution and channel partners who know the tech market.
Building a Channel_Blog

Vendors have a couple choices when it comes to the traditional IT channel. They can sell direct to users and hope for the best or build in value by adding distribution and channel partners who know the technology market inside and out.

Indirect channels offer access to specific vertical markets, a foothold in remote areas, and the chance to integrate different solutions to offer bigger, better ideas for their clients, said CompTIA faculty member Gary Bixler, who previewed a new 90-minute educational module during the Virtual Communities & Councils Forum on March 17.

“Most mature vendors will employ a mix of direct and indirect—not one or the other,” said Bixler. “The question is, ‘What is your optimal channel go-to-market strategy, direct versus indirect?’”

CompTIA developed a Building a Channel module to help emerging technology vendors evaluate and make go or no-go decisions about building an indirect channel for their goods and or services—and how you can add value to the equation.

“We want people to walk away with the types of IT channels to consider, advantages to see if they build a channel and what does the money look like, investments and profit potentials for the investor and the partners,” Bixler said. 

Get Conversations Going

Building an indirect channel takes a lot of investment, time and work, but the payoffs are worth it to companies that want to scale into new markets and fill in skills, expertise and credibility gaps.

“There are clear examples where an indirect IT channel can help a company be more nimble, quicker, and that can be a really important aspect of a business,” Bixler said. 

Vendors and partners play key roles in the Technology Buyer’s Journey, Bixler said. CompTIA has combined the expertise of all its members to create this first of five lessons that help people consider all aspects of the traditional IT channel, and how it can help sell products and services.

The module walks vendor leaders through five challenges related to indirect IT channels:

  • Business growth
  • Productivity
  • Skills development
  • Staffing
  • Need for faster time to market (TTM) and return on investment (ROI)

“Those are five key issues that many companies are kind of grasping with when they come to this point, when they’re seriously thinking about whether we invest in and launch a channel for our business,” Bixler said. 

Get to Know the Pain Points

Successful partnerships, he said, require you to consider the key sources of revenue and expense for channel vendors and to help leaders decide on a couple of key questions before they can make that critical go or no-go decision. Key questions include:

  • Will this help us scale into the markets we want?
  • Will a channel fill in the skills, expertise and credibility gaps?
  • Are we prepared to make the investment to design build and launch?
  • Does this align with the long-term goals?

The 90-minute module also covers key discussion triggers, what channels can and can’t do for business, how to measure success related to revenue, expenses and profit. Then the module dives deeper into cash flow, the sales pipeline, and misconception for vendors who choose to work through a distributor.

“One of the misconceptions is that ‘We don’t need people.’ You’re going to need staff,” Bixler said. “You’ll need distributor managers to set goals and measure and enable and support those distributors or you’ll need those people to manage your channel from sales or partner account managers.”

There are important things companies need to know before trying to sell through an indirect IT market, like the importance of developing channel-specific marketing. “You need true channel marketing to the channel and through the channel that talks about the why and when and where and how you’re going to make money,” Bixler said, “and here’s some co-branded materials to help sell it.”

Access Virtual CCF On Demand

Missed CompTIA’s virtual Councils & Communities Forum? No worries, you can watch the whole event here

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