A 'Demand' Generation

One critical differentiator between the very best solution providers and the run-of-the-mill ones is their ability to plan and handle costly demand generation activities that result in sales increases for them and their vendor partners.

These "very best" solution providers are winning plenty of new customer accounts with little or no assistance from their vendor partners. That's no small matter in a mature market where many vendors are singing the praises of solution providers that are focused on selling solutions rather than fulfilling vendor-centric product orders.

The big problem for these cream-of-the-crop VARs is that far too often, vendors have failed to structure their channel programs to reward demand-generation activities.

A good many channel programs, particularly in the personal computer segment of the market, are outdated. They have a late 20th century feel—that is, they were established with back-end rebates that simply reward sales volume rather than a particular solution's total net income potential for both the vendor and the VAR. The big direct marketers or e-tailers have no problem getting millions of dollars for direct marketing pieces that often are tossed into the trash by would-be customers. But a VAR that is driving new solution sales business through more innovative activities often is left out in the cold. That's just insane at this stage of the industry, when customers are buying solutions rather than committing to pure product refreshes.

Vendors that want to capture the heart and soul of the fastest-growing VARs and benefit from their robust demand-generation capabilities have got to set aside more funds that drive net new sales or open new doors. One way to solve this problem would be for vendors to set up a demand generation channel chief whose be-all and end-all mission is to work closely with these best and the brightest independent VARs. This needs to be someone who has a healthy budget and can get funds easily and quickly into VARs' hands.

Right now, there just isn't a big enough focus on these demand generation activities. What's more, the funds often get held up. More than a few VARs get sponsorships or co-op fund approval and then have to chase the vendor to retrieve the cash. That's ridiculous. It's time for vendors to get with the demand generation of VARs.