There is no doubt that changes in the way customers buy technology are creating subtle yet significant changes in the way companies in the industry are going to market. Yet, at the same time, these changes are putting significant pressure on existing channel and partner organizations, processes and capabilities.

In view of this, it is unsurprising that many companies are rethinking the ways they allocate their channel marketing resources and how they utilize marketing infrastructure to scale their channel operations, particularly as they target the increasingly key SMB market.

Whilst we once lived in a product-driven world, this has now undergone a paradigm shift. Customers today want solutions to business problems. As VARs and other channel partners evolve into providers of end-to-end solutions, vendors also have to adapt the way they conduct their business.

The best-in-class VARs and channel partners start with a deep understanding of their specific target market. The first thing they do is to identify their customer’s business issues and needs and develop an approach to addressing these. Their next step is to assemble the necessary "piece parts" from vendors and package them in a solution that includes the VAT or channel partner’s services.  This is in definite contrast to a typical vendor who only sees the universe from his own technology stack.

Best-in-class vendors understand that instead of “pushing” programs from the top down through the channel, companies need to build programs from the ground-up co-operatively with their VARs and other channel partners. Many companies have been doing this for a long time with large enterprise partners. Now, this understanding and changes are percolating throughout the partner landscape and into the SMB market space to include VARs, distributors and other channel partners.

However, it is important to remember that at every stage, vendors must work actively with their resellers to assemble solutions and articulate customer value in terms of the latest industry and channel business models.

Channel Value Engineering – replacing "scatter shot" marketing programs
Allan Adler and Dylan Charles from Crimson Consulting call this new paradigm, channel value engineering. Value engineering is a new model for assembling solutions and articulating customer value in terms of the latest industry and channel business models.

In channel value engineering, vendors format their channel programs to allow channel partners to pick the solutions technology components based on how well the vendors solution resonates with the partners’ solutions and business models. Vendors benefit from this approach because it takes the focus of “laundry lists” of features and the prices of individual components. Instead, channel partners are looking at a vendor's core competency, value proposition to the customers and key messages in the context of their overall solution delivering model to the end user.

By replacing "scatter shot" marketing programs, value engineering processes increase returns on vendor marketing investments by helping partners to harmonize messages and activities for increased effectiveness and faster revenues, leading to both partner and vendor success.

Translating channel value engineering into action
Understanding the channel value engineering strategy is an important first step. However, it is just an exciting idea until you get some concrete value from it by putting it into action.

The first step in executing value engineering is basing programs and associated marketing campaigns on underlying co-marketing principles.

Once you start selling cooperatively, you will naturally have more partner relationships, many more product/solution combinations, and multiple associated marketing programs. To scale, vendors need to develop processes and operational models based on repeatability and reusability. Companies need processes that foster flexibility and agility as well as tools that simplify execution. Allan Adler and Dylan Charles say that vendors here need to create a mass-customization machine for channel co-marketing, especially for the SMB space.

Changing internal processes and organizational structures
Of course, undertaking such an effort forces businesses to change their internal processes and organizational structures.  There has to be a clear need to scale your programs that does not overwhelm your organization and your workload.

A highly efficient and repeatable set of processes are needed for developing, launching and managing programs and their associated campaigns.

These updated processes and tools leverage your existing staff’s skills and allow teams to coordinate effectively at both internal and external relationships. It is an approach that enables large scale programs, saves time, reduces costs and increases market reach.

Building a foundation of consistent and repeatable as well as reusable processes that can be used time and time again to roll-out campaigns is crucial. This leverages vendor staff and resources to deliver more effective programs, more efficiently.

Customers win because implementations deliver value faster when everyone’s singing from the same book. Resellers win because they are positioned in the minds of customers to close profitable business. Vendors win because marketing campaigns build around these models pave the way to higher channel uptake for vendor programs.

Remember, form follows function. As vendors adapt to today’s focus on end-to-end solution delivery, they need to re-shape their marketing processes and infrastructure to the new model. By doing this, vendors can scale, creating channel marketing organizations that deliver the promise of mass-customization which is essential to creating a scalable SMB go-to-market strategy.