BEYOND ONE SIZE FITS ALL...

Drowning Without Channel Segmentation 2.0

by Bob Snyder

Is there anyone here who is NOT segmenting their channel currently?

Is there anyone here who does NOT want to further segment their channel?

WHY DO WE SEGMENT?•We’re imposing ORDER on CHAOS

•To appreciate our VALUE partners

•To build better RULES of ENGAGEMENT

•To reach new subsets, to enable our diversification, to stimulate BUSINESS

HOW DO WE SEGMENT? Geography

Bus. Type

Revenue

Markets Served

Product/Service Offering

Sales Growth

Selling Methods

Competitive Lines Carried

Traditional!

For example, GEO segmentation allows you to cater to yourcustomer’s local appetites...

COKE adapts their machines to local Belgium culture but in a way that might make some other nationalities feel queasy about drinking the beverage

LET’s TAKE A FRESH LOOK

AT SIMPLE SEGMENTATION

Peel a banana and it comes out in one piece...

Peel an orange and it comes out in segments...

Peel a grape and it is a messy business...

No way at all to “peel” fruit salad...

Commodity

SME Resellers

VARs

Solution Providers

Commodity is simple yet you can slice it further

SME Resellers are clearly recognizable but defy easy segmentation

VARs separate easily into clear segments

Solution Providers by definition mix & match solutions

VENDORS WANT SPECIALIZATION FROM THE

CHANNEL

Vendors Want Convenient Boxes...

The trend is for Tier 1 vendors to either encourage (or drive) their channels into specialization...to better control those boxes...

CHANNEL IS A MESSY BUSINESS

“How Messy?” You Ask...

EXAMPLE 1: TAKE A LOOK AT THE WIDE PRODUCT RANGE OF THIS “NATIONAL FORCE”

THEY ALSO SELL SERVICES....managed, infrastructure and professional....

And they also sell SOLUTIONS like Cabling and Document management...

Not At All Like the Vendor’s World...

EXAMPLE 2 : Business software reseller now sells hardware & accessories

ISPs

EXAMPLE 3 : ISP now also sells software

Channel are messy in reality...

EXAMPLE 4: Another software company where you wouldn’t expect any hardware...yet... Tape libraries, DVD jukeboxes and appliances!

EXAMPLE 5: A web solutions company selling also hardware & software

EXAMPLE 6:

• How Tandberg/Cisco decides to segment for videoconferencing... using “specialization” and “expertise”

Segmentation 2.0 is Here

There are changes that put pressure on traditional segmentation:

• The market is wider with new players to consider...

• The channel is under pressure to widen its range...

SO vendors are under pressure to make finer distinctions...

Yet all Your Charts, Data, Dashboards....

...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.

Describing a football team...

...by describing the stadium and the latest scores.

...instead of the TEAM.

We Need Channel Psychologists

...Not because Segmentation Drives us all Crazy in the channel....

...But for “psychoprofiles” that will really reflect your partner and your partner’s business behaviour

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.

We Train Salespeople to Recognize “Personalities”

But we don’t yet recognize that channel partners come with different “company personalities”

We officially recognize all people are different but can be grouped by certain prevalent traits...

What does a Channel Partner look for in partnering?

You will hear...• Marketing opportunities, MDF & collateral

• Product training

• Margin (percentage of revenue)

• Tech Support

• Deal Registration

• Suitability to current portfolio

• Bottom-line profit (total in euros)

• Brand or end user appeal

Companies Have Personalities So while all the answers sound the same...each company’s personality determines what are the real motivating factors...

Do You Recognize These Channel Partner Types?

CREATOR...prefers the excitement of creating markets and launching products

PERSUADER...prefers name brands and craves leadership roles that your company might automatically provide

DATA HEAD...requires numerical justification for every action, must appear cost-conscious at all times

SOCIAL...leans heavy on interpersonal relationships

THINKER...responds best to concepts, well-design plans

PROTECTOR...extremely risk-aversive to any disruption of formula, no matter what reward

SCHIZOID...a company in the middle of a personality crisis where no company culture prevails

Company Culture is Personality That Affects Behaviour

Like human individuals, companies can have complex personalities but normally a few traits dominate management...

Segmenting by Personality of Company is Important

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...

If Cloud Changes Everything....

If Cloud is about re-inventing the industry...

Shouldn’t we be re-inventing the Channel?

Cloud & The Channel

If it’s cheaper, you have to sell more to make a living...

There will be new winners & losers....

White label will make a comeback vs. Brand...

By definition, geographic proximity matters less but won’t customer centricity matter more?

Remind me..what do we call it when too many clouds roll in all at one time?

FOG...

So another category to add to your Segmentation 2.0...

CLOUD.

Do They Get It. Or Not?

SUMMARY1. Fruit can be a very useful illustration

of segmentation.2. We should segment ONLY if it gets us

closer to our channel customers.3. How we segment should be changing.4. It is important to segment to reach

your potential future partners as well as current ones.

5. We should identify & segment by company personality as well.

6. The Cloud will change your segmentation strategy.

7. The Cloud will change your channels.

Commodity

SME Resellers

VARs

Solution Providers

I hope you enjoyed your FRESH look at Channel Segmentation.

The channel is still RIPE with opportunities.

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