Channel

Beyond product: aligning with the new channel reality

Continuous engagement and long-term value, rather than just supplying customers with a commodity, are what deliver currency into the pockets of the channel.

Johannesburg, 19 Sep 2019
Read time 5min 20sec
Jacques Malherbe, CTO, Axiz.
Jacques Malherbe, CTO, Axiz.

The Age of the Customer is changing how businesses and institutions behave today. It may seem like splitting hairs: after all, isn’t business always about the customer? Isn’t the customer king? Yes, but there has been a philosophical shift, powered by a customer class with much better access to information. They can make better comparisons faster and cut through the fog of sales talk with greater ease. They also wield this power with a clear awareness of it.

There is good evidence of this in a Salesforce report that compares the buying habits of B2C customers and B2B customers. It turns out that the factors that matter most to consumers matter even more to business buyers.

Good experiences, loyalty and connected processes are more important to business buyers than other consumer types. They are also more likely to share reports of good experiences with their peers and pay extra for a good buying experience. They expect personalised service more than most and will switch to companies that offer a consumer-like buying experience for business services and products.

But this is not a surprise to those who have been encouraging technology channel businesses to adopt service-centric business models. Jacques Malherbe, CTO of Axiz, counts among them:

“The customer journey, as it stands today, is about the collective of touchpoints a customer has with your business. The injection of the customer experience and social channels have made it more complex on how to reach a customer.”

Evolving products and services

Every business offers something in one or both of two categories: products and services. But the significant paradigm shift defining today’s market engagements is that the Age of the Customer expects greater value than just being supplied a commodity. They want the prospects of long-term, service-centric engagements.

It might manifest in the service support for a product, adapting consumption models for a service, even integrating your offerings with their strategy. However you turn this, it’s clear that the "sell today, gone tomorrow" method is no longer tolerated.

“The phrase ‘customer journey’ is abused a lot, but it has a real impact when used properly,” Malherbe explains. “Understanding your customer’s context now and tomorrow is what they expect and how they will judge your service offerings. We frame it as Identify, Recruit, Enable, Grow and Transform. So, our journey with a reseller is not only to figure out how they interact and transact with us and buy goods and services from us, it also deals with this question: How do we participate and enable them to be successful in the end-user market?”

The approach should also be applied to the reseller or solution provider’s engagements with its customers. This is the inflection point for modern sales, lifting the curve upwards and leading towards more business.

But while the philosophy is clear, getting there represents a tough challenge and explains why companies in the local technology channel are struggling.

Aligning with the Age of the Customer

Today’s customers are in a more complex world, and all their access to information has complicated their decision-making. This is the perfect place for resellers and solution providers to step in.

“The customer doesn't suddenly know everything, know how to do everything and can do it all by themselves. They can’t build capabilities and capacity to do it themselves. So, they are looking at some channel function to fulfil certain of those values.”

Resellers are looked to for help, but they then have to muster resources they don’t necessarily have. Distributors such as Axiz frequently find themselves engaged alongside their reseller and solutions partners to discuss transformation strategies and consumption models with the buying customers.

To gain back their advantage, those selling to the end customer need to produce services on a consumption basis, not a project basis. They must rope fragmented offerings into a platform. Platform economies represent a fragmented value chain that can be assembled in different configurations to deliver value.

But services are not profitable if they are only applied for brief moments. Continuous engagement and long-term value are what deliver currency into the pockets of the channel. All this sounds daunting until you realise an ability to scale. To this end, distributors must offer the platforms which their direct customers can use to satisfy their own customer base, says Malherbe:

“There is much more specialisation and more room for smaller companies to punch above their weight class. Recently, we had a conversation with a systems integrator that plans to offer Presales-as-a-Service because they have a strong competency in that field. Presales was once a crucial internal part to sales, but now it can be a commodity service that benefits everyone. Once you look at things in that way, you start seeing the long-term play. And once you apply platform frameworks to it, you can see how even a small channel business can scale to provide services to large customers.”

Customers need more nuanced help to complement their heightened intelligence and buying power. This doesn’t cut channel companies out, yet it certainly requires them to reconfigure if they want to address those nuances. The channel business that realises this can adapt to the Age of the Customer.

Then they should look for appropriate partners. Distributors play an important role, synchronising the motions of international vendors with the requirements of local channel companies. Ask what your distribution partner brings to the table: if it doesn’t let you focus services, build consumption models, put scaling resources behind your efforts and spend more time building relationships with your customers, they are not helping you adapt to the new channel reality.    

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