It is essential that the compensation plan for a sales organization reflect management objectives. Even in the best of circumstances, however, the control that vendors can exert over channels is tenuous when compared with that over a direct sales force. They must attempt to influence without having authority. Control of channels is difficult due to many factors, including:
The majority of VARs represent the offerings of multiple companies.
Some companies may compete with their channel on certain opportunities by trying to take the business direct.
The VARs’ interests come first. Relationships work best when the manufacturer’s offerings align with the VARs’ business strategy and expertise. If the VARs’ core business is consulting services, they will focus the majority of their sales efforts in this area. For such companies, representing products may be viewed as a way of generating consulting opportunities. Another VAR may want to generate a higher volume of product sales and have little or no appetite for consulting.
VARs representing multiple companies often focus on whatever vendor’s offerings are easiest to sell at any given time (i.e., the “hot” product).
Some VARs have relationships with a relatively fixed group of customers, and may not exert much effort actively pursuing new accounts.
Poor design or execution of channel strategies are common, which—given the circumstances listed above—shouldn’t be surprising. Companies establishing indirect channels may fail to realize that in addition to handing over their offerings, they are inadvertently getting into the same business as Customer Focused Selling—that is, providing sales training for their business partners. Most of them are not up to this challenge, with whatever training they provide treating their offerings as nouns.