or’s Point Of View
How channel partners should handle support.
Those of you, who have jumped to the conclusion that, this article does not relate to the channel, couldn’t be more wrong! What we are going to discuss, are the very things any vendor, must have planned and provided for, before you ink any kind of relationship with them.
Mind you, if a vendor has not provided for even one of these things — then you as a channel partner, will either have a very dissatisfied customer; or a very satisfied customer, but the cost of the keeping him satisfied will have to be fully borne by you. (Keeping in mind, that you were not expected by the vendor to do the same, in the first place!)
Needless to say, vendors have the highest stake in ensuring that the end user always gets the necessary support. Hence they have to plan and provide for the same from the ‘blue-print’ onwards, and above all they also have to ensure that the channel partners complete ‘the act’ happily and successfully.
The moment a vendor thinks of launching a product/service, the first thing he should do, is to have a plan that ensures customer support at all times and the necessary provisions should be made accordingly. This calls for putting in place the right kind of backbone in terms of infrastructure, resources and manpower to do the needful. Once the same is in place, the requisite training on ‘How to be an effective trainer’ should be provided to the staff members responsible for the operation. It is necessary that the trainers should fully exploit the investments made for the purpose — and mind you all this must be done before the vendor takes his first step to approach the esteemed customer. (Which in this case is the channel partner)
Be wise with price
While deciding on the pricing of a product, a vendor rarely takes into consideration the fact that the channel partner has not only to deliver, install and conduct training but also to provide support during the warranty period. At times even the post-warranty support pricing are either kept vague or unattractive ensuring that the channel partner is disinclined to provide the support. We did have a phase in our industry where the customer took unlimited support for granted but both the customer and vendors were responsible for that situation.
Today with fast maturation of the customer and the industry, both appreciate that support has a cost and hence has to be paid for. In this scenario it becomes absolutely essential for the principal to ensure the following:
a) Price the product with sufficient margin for the channel, so that channel partners happily provide support.
b) Communicate to the customer about the extent/cost of support during the warranty as well as post warrant period.
For the purpose of better customer support, vendors should offer ‘margin spread’ instead of continuing with the practice of gross margin currently being offered to channel partners, and the ‘margin spread’ should be spread over three phases.
The ‘margin spread’ should be a sum total of sales margin, warranty support margin and post warranty support margin on maintenance. You should offer these on the successful completion of each and every responsibility. The smartest way to ensure that a channel partner provides the customer with the ultimate support at all times, is a simple technique of allocating margins of the ‘margin spread’ in such a manner that the channel partner feels that support is the business!
Training the way to success
Training the channel partner assumes great importance since the end-user is totally dependent on the channel partner for the first level of support. The trainers of the vendor should not only be excellent in product training but should be able to motivate and convince the channel partners to provide high quality and prompt support to the customer at all times.
This is very difficult to achieve since the channel partner normally has a short-medium term view of support and the vendor has to keep long term as well as short-medium term view in focus. However, this problem is automatically solved if the ‘margin spread’ takes care of short-medium-long term and proper training to supplement the same is provided.
The next step is a simple step of ensuring that the channel partner is always provided with sufficient and correct inventory of material that will help them to provide prompt first level of support to the customer. Apart from this, the vendor must back up the channel partner with an efficient supply chain management. If the vendor provides the channel partner with all the above support then all can be rest assured that the esteemed customer will always be looked after and ‘ever after’.
I firmly believe that given the right inputs and motivation to all concerned in the entire chain; be it the vendor or the channel or the customer, there is no way anyone will be left dissatisfied, at least due to lack of support!
– Sanjiv Mehta
Views expressed are those of the author who is the Managing Director of Cirrus Electronic Systems Ltd. He can be contacted at