The evolution of B2B channel partners in technology businesses
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Highlights
Changing business models are driving B2B channel partners to handle multidimensional roles. They need to work in tandem with technology enterprises to accelerate business growth for their end customers.
In this article
Abstract
The success of most technology organizations rests heavily on having a reliable channel partner ecosystem. With changing trends across semiconductor, networking, and other technology companies such as Cisco, Intel, Motorola, and more, and evolving end-customer expectations, the role of channel partners in customer engagement is also evolving. Partners were traditionally involved in various functions of the customer engagement cycle, from creating awareness to post-sales support.
However, customers are now looking for new business models that offer personalized solutions and faster realization of benefits. With these changing business dynamics, the role of channel partners in generating customer value is evolving from being merely transactional to being more strategic. Technology companies need to redefine and enable the support, structure, and operating competencies that channel partners need to deliver exceptional customer experiences.
Impact on channel partners
Technology companies are at the forefront of innovation to deliver purpose-driven solutions across industries, and this is changing how products are created, offered, and delivered to customers. In addition to these changes in the product offerings mix, new business models are being adopted in the technology industry, which will help these enterprises differentiate themselves in the face of intense competition. Such business model change will also shift customer focus from product ownership to product-as-a-service accessibility.
These new business models also require that tech enterprises put customer experience at the heart of their business strategies, as customer lifetime value will drive the growth. With digitalization comes a new generation of customers who demand best-of-breed, domain-centric, personalized, and outcome-focused customer experiences that ensure speed and convenience across the customer life cycle.
Figure 1: Changing customer demands for product offerings
These evolving industry trends and customer expectations demand a change in the role of channel partners. The existing business processes across channel management are complex for both tech companies and channel partners and are roadblocks in adoption of any change in customer engagement. The need of the hour is for technology companies to upskill their partners and simplify and transform their existing customer engagement processes with a goal to deliver superior end-customer experiences.
As the behavior of B2B buyers changes, low-touch, digital, and omnichannel buying options have become primary requirements for most customers. Today, customers are choosing B2B self-service portals over interacting with sales representatives for ongoing purchases and other repetitive activities. If they do engage with sales representatives, customers then prefer consultative, personalized interactions. This also saves time for sales representatives and account managers, allowing them to focus on nurturing the customers and their complex needs. These changing customer requirements and behaviors are driving technology companies to embrace new engagement models using automation. These enterprises are also redefining the roles of their partners to add greater value to overall customer experience. As an example, a European global technology company redesigned its customer engagement processes using the latest digital technologies. It reinvented its engagement with more than 2,800 global business partners to deliver iconic experiences to its customers.
Some questions that arise due to these changing dynamics:
• Are partners becoming dispensable?
• Are they equipped to handle the latest business trends?
• How can technology companies bring them up to speed?
As customer-centricity is key to driving more business, there is a critical need to strike a balance across customer requirements, partner engagement, and business approach.
Redefining channel partner roles
Conventionally, partners had well-defined roles such as resellers or distributors in the overall customer engagement model, with limited responsibilities. Resellers sourced products from manufacturers and sold those products to end customers, earning profits in the process. On the other hand, distributors facilitated the supply chain, acting as a link between the manufacturer and the end customer. However, with technology companies focusing more on customer-centricity and modernization, partners are expected to handle multidimensional roles with a broader set of responsibilities and contribute more to the value chain.
Resellers are now redefined as value-added resellers, who do not merely sell products but offer holistic packages with added services and features of their own. Distributors are now being replaced by marketplace orchestrators, who can create more opportunities through different channels and expand into new markets faster with industry-specific capabilities, local expertise, and strong customer relationships. System integrator (SI) partners are emerging in the place of traditional service providers. SI partners have access to new products and feature release information, training, and technical support that can be leveraged to create superior quality solutions.
Evolving expectations
As companies focus on customer-centricity, expectations from channel partners are changing across the life cycle, from awareness to post-sales service. Traditional approaches of lead generation have been augmented using low-touch digital solutions, which provide customers with self-service capabilities, reducing their time and effort in finding the right solutions to meet their needs in their industry context. These enterprises are now looking for partners to deliver consultative expertise and personalized engagement to their customers to help them understand the solutions in their own context over and above the self-service solutions.
As customers are no longer looking for one-size-fits-all solutions, partners are expected to provide highly personalized, bundled solutions. This can be a complex request for partners who used to sell off-the-shelf products. In this scenario, partners should be upskilled to understand a customer’s changing requirements and products with greater insight. Such an enhancement will help them configure and provide first-time-right solutions. Technology companies must invest in training and performance programs to make the partners more conversant in the technologies, business models, products, and services.
Partners should also be equipped with necessary tools such as cognitive product selectors, guided selling capabilities such as ecommerce, configurators, upsell and cross-sell recommendations, intelligent pricing, tailored workflows, and more. Connecting these capabilities through automation enables straight-through processing, improving partner productivity, reducing deal cycle time, and improving overall partner experience in addition to enhancing customer experience.
To accelerate their innovation, partners must create and revamp their value-added services and post-sales support capabilities to align with the innovation cycles of technology enterprises. These will help partners differentiate themselves from others and improve customer stickiness. To illustrate, partners can curate and innovate personalized training programs on the solution packages offered by the technology enterprises. These programs can differentiate customer success in the face of competition.
Figure 2: Transformation of B2B partner roles
Best practices for channel partner relationships
Technology companies must build their strategies based on mutual benefits and the efficient use of a channel partner’s expertise. A partner-empowered and customer-centric operating model is the need of the hour to achieve a competitive edge. Below are some standard practices that can be imbibed in the changing business models to stand out from the competition, build lasting customer relationships, and sell efficiently through channel partners:
Accelerated business growth
Change is inevitable with ever-evolving customer buying patterns and engagement preferences. To ride this wave of transformation, technology companies and channel partners need to innovate and adapt rapidly. Partners need to be made aware of the transformation vision clearly so that they can work closely with technology companies to create their own ecosystem and serve end customers more effectively. In short, both need to strengthen their relationships and work in synergy to assist customers, which in turn will translate their aspirations into reality, thereby accelerating their business growth.
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