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Fresh Look at IT Channel Segmentation

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A discussion of IT channel segmentation and the shift to Segmentation 2.0...include "a fresh look," what channel partners want, what's missing from traditional segmentation, and a few notes on impact of cloud.

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Fresh Look at IT Channel Segmentation

  1. 1.
  2. 2. Drowning Without Channel Segmentation 2.0<br />BEYOND ONE SIZE FITS ALL...<br />by Bob Snyder<br />
  3. 3. Is there anyone here who is NOT segmenting their channel currently?<br />
  4. 4. Is there anyone here who does NOT want to further segment their channel?<br />
  5. 5. WHY DO WE SEGMENT?<br /><ul><li>We’re imposing ORDER on CHAOS
  6. 6. To appreciate our VALUE partners
  7. 7. To build better RULES of ENGAGEMENT
  8. 8. To reach new subsets, to enable our diversification, to stimulate BUSINESS</li></li></ul><li>HOW DO WE SEGMENT?<br /><ul><li> Geography
  9. 9. Bus. Type
  10. 10. Revenue
  11. 11. Markets Served
  12. 12. Product/Service Offering
  13. 13. Sales Growth
  14. 14. Selling Methods
  15. 15. Competitive Lines Carried</li></ul>Traditional!<br />
  16. 16. For example, GEO segmentation allows you to cater to yourcustomer’s local appetites...<br />COKE adapts their machines to local Belgium culture but in a way that might make some other nationalities feel queasy about drinking the beverage<br />
  17. 17. LET’s TAKE A FRESH LOOK<br />AT SIMPLE SEGMENTATION<br />
  18. 18. Peel a banana and it comes out in one piece...<br />
  19. 19. Peel an orange and it comes out in segments...<br />
  20. 20. Peel a grape and it is a messy business...<br />
  21. 21. No way at all to “peel” fruit salad...<br />
  22. 22. VARs<br />Commodity<br />SME Resellers<br />Solution Providers<br />
  23. 23. VARs separate easily into clear segments<br />Commodity is simple yet you can slice it further<br />SME Resellers are clearly recognizable but defy easy segmentation <br />Solution Providers by definition mix & match solutions<br />
  24. 24. VENDORS WANT SPECIALIZATION FROM THE CHANNEL<br />Vendors Want Convenient Boxes...<br />The trend is for Tier 1 vendors to either encourage (or drive) their channels into specialization...to better control those boxes...<br />
  25. 25. CHANNEL IS A MESSY BUSINESS<br />“How Messy?” You Ask...<br />
  26. 26. EXAMPLE 1: TAKE A LOOK AT THE WIDE PRODUCT RANGE OF THIS “NATIONAL FORCE”<br />
  27. 27. THEY ALSO SELL SERVICES....managed, infrastructure and professional....<br />
  28. 28. And they also sell SOLUTIONS like Cabling and Document management...<br />
  29. 29. Not At All Like the Vendor’s World...<br />EXAMPLE 2 : Business software reseller now sells hardware & accessories<br />
  30. 30. ISPs<br />EXAMPLE 3 : ISP now also sells software <br />
  31. 31. EXAMPLE 4: Another software company where you wouldn’t expect any hardware...yet... Tape libraries, DVD jukeboxes and appliances!<br />Channel are messy in reality...<br />
  32. 32. EXAMPLE 5: A web solutions company selling also hardware & software<br />
  33. 33. EXAMPLE 6: <br /><ul><li>How Tandberg/Cisco decides to segment for videoconferencing... using “specialization” and “expertise”</li></li></ul><li>Segmentation 2.0 is Here<br />There are changes that put pressure on traditional segmentation:<br /><ul><li>The market is wider with new players to consider...
  34. 34. The channel is under pressure to widen its range...</li></ul>SO vendors are under pressure to make finer distinctions...<br />
  35. 35. Yet all Your Charts, Data, Dashboards....<br />...are like a painting of a photo of a sculpture. Moving farther and farther from the reality... but you assume you have captured the image.<br />
  36. 36. Describing a football team...<br />...by describing the stadium and the latest scores.<br />...instead of the TEAM.<br />
  37. 37. We Need Channel Psychologists<br />...Not because Segmentation Drives us all Crazy in the channel....<br />...But for “psychoprofiles” that will really reflect your partner and your partner’s business behaviour<br />
  38. 38. This test had noting to do with psychological profiling. We just wanted to make sure we’re not adding an idiot to our Preferred Partners.<br />
  39. 39. We Train Salespeople to Recognize “Personalities”<br />We officially recognize all people are different but can be grouped by certain prevalent traits...<br />But we don’t yet recognize that channel partners come with different “company personalities”<br />
  40. 40. What does a Channel Partner look for in partnering? <br />You will hear...<br /><ul><li> Marketing opportunities, MDF & collateral
  41. 41. Product training
  42. 42. Margin (percentage of revenue)
  43. 43. Tech Support
  44. 44. Deal Registration
  45. 45. Suitability to current portfolio
  46. 46. Bottom-line profit (total in euros)
  47. 47. Brand or end user appeal</li></li></ul><li>Companies Have Personalities <br />So while all the answers sound the same...each company’s personality determines what are the real motivating factors...<br />
  48. 48. Do You Recognize These Channel Partner Types?<br />CREATOR...prefers the excitement of creating markets and launching products<br />PERSUADER...prefers name brands and craves leadership roles that your company might automatically provide<br />DATA HEAD...requires numerical justification for every action, must appear cost-conscious at all times<br />SOCIAL...leans heavy on interpersonal relationships<br />THINKER...responds best to concepts, well-design plans<br />PROTECTOR...extremely risk-aversive to any disruption of formula, no matter what reward<br />SCHIZOID...a company in the middle of a personality crisis where no company culture prevails<br />
  49. 49. Company Culture is Personality That Affects Behaviour<br />Like human individuals, companies can have complex personalities but normally a few traits dominate management...<br />
  50. 50. Segmenting by Personality of Company is Important<br />To the same degree that we train salespeople to adjust to an individual’s personality in order to communicate better, to close deals and to formulate working relationships... <br />
  51. 51. If Cloud Changes Everything....<br />If Cloud is about re-inventing the industry...<br />Shouldn’t we be re-inventing the Channel?<br />
  52. 52. Cloud & The Channel<br />If it’s cheaper, you have to sell more to make a living...<br />There will be new winners & losers....<br />White label will make a comeback vs. Brand...<br />By definition, geographicproximity matters less but won’t customer centricity matter more?<br />
  53. 53. Remind me..what do we call it when too many clouds roll in all at one time?<br />FOG...<br />
  54. 54. So another category to add to your Segmentation 2.0...<br />CLOUD.<br />Do They Get It. Or Not?<br />
  55. 55. SUMMARY<br />Fruit can be a very useful illustration of segmentation.<br />We should segment ONLY if it gets us closer to our channel customers.<br />How we segment should be changing.<br />It is important to segment to reach your potential future partners as well as current ones.<br />We should identify & segment by company personality as well.<br />The Cloud will change your segmentation strategy.<br />The Cloud will change your channels.<br />
  56. 56. VARs<br />I hope you enjoyed your FRESH look at Channel Segmentation. <br />The channel is still RIPE with opportunities.<br />Commodity<br />SME Resellers<br />Solution Providers<br />
  57. 57. CHANNEL MEDIA EUROPE, publishers of industry news & analysis for EMEA resellers & solution providers....<br />www.IT-sp.eu<br />www.ProAVbiz-Europe.com<br />www.ConsumerIT.eu<br />www.On-CE.eu<br />www.ECInews.eu<br />www.DigitalSignageNews.eu<br />www.MobileChannels.eu<br />

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