Channel Success
Client: Fortune 1000 storage solutions firm
Situation:
- Needed strong channel revenue growth to exceed corporate goals
- Required a strategic repositioning to gain market share - channels provided 30% of the client’s revenue, while industry analysts predicted that 70% of the industry’s growth would come through channels, and competition was already at 50% to 90% channel revenue
- Excessive sales costs and conflict between channel sales and direct sales
- Poor use of distribution, with virtually 100% of orders being filled by this client
Objective:
- Gain an accurate view of the current channel program: from the viewpoint of employees, channel partners, competition, and customers
- Gain agreement on issues, opportunities, and barriers to growth.
- Recommend steps for market share gain through channel strategies and tactics
Methodology:
- A 360 business performance assessment was applied to the client’s channel program
- Four consultants with channel expertise were assigned by BusinessLaunch
- Conducted interviews with 70+ constituents
- Completed a comprehensive gap analysis as part of developing recommendations
Outcome:
- New revenue sources exceeding $100M in annual potential
- Potential channel partners that could deliver this revenue if engaged by NetApp
- A new channel structure, including two-tier distribution
- A new sales model designed to improve sales rep productivity by 27%
- Realigning areas of overinvestment and underinvestment in the field sales organization
- A new channel program specifically designed to outperform the competition
- Pricing model changes that placed incentives on channel sales and increased margins
- Compensation plan changes that reinforced the behavior needed for channel success
Result:
- The VP of Marketing stated that this was a “world class” piece of research. He went on to say that their channel program was being driven from a level of understanding “around class 101 teachings” whereas the BusinessLaunch recommendations were on a “class 301” level.
- After our research, the CEO employed McKinsey & Company to develop a set of strategic recommendations for the firm. As part of their analysis, McKinsey validated the BusinessLaunch findings and recommendations.
- The magazine CRN featured an article in its September 16, 2002 issue headlined: “[Client Firm] to Channel: We were wrong, we do need you.” A client executive was quoted as saying [Client Firm’s previous channel program] was found to be a great strategy for keeping channel sales low.”
