How does a successful vendor, with a well establish core product, channel and customer base go about launching a second, different solution successfully?

In the “Good old days” tech vendors used to have several different ways of incentivising and funding market making with the channel. The most common way of encouraging Distributors to assist with Scale-Up activities was to create a “special project” or set aside Partner development Funds (PDF). It wasn’t unusual for these pots to consist of tens of thousands of dollars.

The funding could be used by Distribution to create a market building project consisting of technical and sales resource, marketing campaigns and events to create initial demand for the new solution. Once the bridgehead was established, and enough demand created, the early adopters would be joined by the masses and product margins and ongoing MDF would sustain the 2nd phase of channel development.

Unfortunately, such discretionary funding is now quite hard to come by and VAD’s have to work extremely hard to secure it or hide it under some other guise. 

Senior Execs in the Vendors (mostly in the USA) don't seem to value mid-term success over short term goals, probably because of market pressures, their own targets and the fact that they change jobs every year. They, and the systems they watch over don't allow local execs on the ground to falter from this course.

As a result, I'd guess that 95%+ of all marketing investment is spent on short term initiatives.

So, this is all understandable and regrettable, but, it hasn’t solved the problem!

How does a successful vendor, with a well establish core product, channel and customer base go about launching a second, different solution successfully?

Before we look at solutions, we need to understand why second fronts often fail for these established vendors. Here are 5 common mistakes that I see vendors making today…

>Over-complicated messaging: Start with WHY does this new solution exist or WHY someone would pay $x for it.

> Failure to appreciate that channel partners also need to know why. Messaging is required to cover this.

> Not enough profiling is undertaken to clarify what a perfect end-user or perfect      channel partner look like. Marketers often talk about buyer personas when considering an individual, but the same also applies to the corporate entities that you want to engage.

> Disruptive vendors start with a clean slate and no baggage. Established vendors sometimes over-rely on their incumbent channel and therefore aren’t as nimble. They dance around trying to change behaviour and encourage transition, without considering that it’s just a bad fit for those partners.

> Market making IS NOT the same as market scaling, so why treat it the same? Disruptive vendors create processes, funding models and channel strategy to achieve their growth aspirations, they don’t try to re-use systems designed to enable or manage a different, often contradictory purpose like high volume sales growth.

The UK banking industry is a perfect example of how things turn out if you fail to recognise these points. Traditional behemoths are being outmaneuvered by upstarts like Metro Bank, Virgin Money and First Direct, because the newer players have understood their clients well, developed the right products, market them well and have systems, processes and a go to market model that is streamlined and efficient.

In one of my next blogs I will look at some ideas to solve this issue.