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How a Weak Economy Can Present Opportunities for Channel Partners

By Jeffrey Schwartz | April 7, 2023
Weak Economy

Despite the weak economy, IT suppliers can still grow revenues and improve their bottom line. How? By pivoting more sales resources to the channel. With prospects for an economic recovery uncertain, software and hardware providers should be doubling down on their partner ecosystems, according to Bain & Co. executive VP Thierry Depeyrot.

Whether the current economic downturn evolves into a recession, Depeyrot advises channel leaders on how utilizing their partner networks can help extend coverage without impacting their margins. Depeyrot will explain how during the Channel Partners Conference & Expo in Las Vegas during his session, "How to Grow Channel Partner Revenue Through Turbulent Times."

[Editor's Note: See and hear more than 150 channel visionaries and experts speaking at the Channel Partners Conference & Expo. The event also features more than 375 ICT companies in the massive expo hall. Register now for the world’s largest independent channel event, May 1-4, at the Venetian in Las Vegas.]

Channel Partners: In your role advising channel leaders, how are you guiding them with the uncertain economic climate? 

Thierry Depeyrot: The channel is important. It has become even more important as we deal with uncertainty and try to grow despite the challenges ahead. I want to help everyone reflect on the importance of having a clear value proposition from the perspective of the OEM to the general partner or for the channel partner back to the OEM. They need to understand the different components of laying the foundation for growth around capability development. And then finally, they need to know where to focus scarce resources on the right opportunities.

CP: What impact is the downturn having on the channel?

TD: There is a current risk of over-rotating where there’s talk of recession. But that’s not necessarily the practical reality on the ground. There are some sectors that are impacted more than others. Yet there’s growth and good projects happening out there. So there’s the first risk of going too far in defensive mode. The fundamental lies in that vendors want to invest in their customers and installed base even more so when economic times are tough. And obviously, channel partners need to stay focused on the existing installed base and not get too dispersed on acquiring new logos and prospects.

Bain & Co.'s Thierry Depeyrot

CP: What are the typical recommendations you give them? 

TD: There’s often, especially for the larger OEMs, the tendency to view things in a very transactional manner where they say, "If I add a few points of discount here, that’ll do it." And no, that’s not how it works. But that can help. It’s a lubricant in the process and encouragement. But if you don’t have the right way of doing business, the right enablement and support and engagement, it won’t get you where you want to go.

CP: What path will take them down the right road? 

TD: Leaders can do certain things to protect their partner ecosystems and invest in growth. I think a lot of it is about deciding where to focus your resources. It is recognizing that working with the channel and winning in the channel is a long game. Again, don’t over-rotate. Even when times are tougher, you need to keep on supporting your channel. But within that, obviously, everyone has budgets, which they need to be able to hold. And I think understanding how you can deploy incentives to align to joint outcome like favoring marketing and sales activities over the longer-term certification.

CP: How do you recommend they align their incentives and other marketing initiatives?

TD: It’s about aligning with your partners to target the right accounts and plan together. It can also be a very high gain when you include them thoughtfully in the sales process. Enablement matters a lot.

CP: What about from the channel partner perspective?

TD: Partners need to be deliberate about their own vendor ecosystems. I think the most successful partners will not just be thinking of the short-term customer opportunity, but also how different vendors stack together and how to create a better-together ecosystem.

CP: It stands to reason that many suppliers will tap their partner ecosystems more because they have had to pare down their own resources, right? 

TD: That is right. I think it creates a lot of opportunities for channel partners, where the OEMs get pressure on their direct budgets and growth or expansion plans, and many of them tend to flow through the channel. It’s a moment where they tend to rediscover the value of the channel and it's a totally variable resource.

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