It's not you, it's me.

In a recent report, The State of Marketing Budget and Strategy in 2023, Gartner summarised the 2023 challenges marketers face with the statement that “it’s not the dollar in your pocket that counts, it's what it buys”.

I confess that I’m relatively new to the IT channel. My background is in retail advertising which, to be clear, isn’t the glamorous side of advertising, but more down-and-dirty, results-driven.

What Gartner's summary did was remind me of the advertising ‘de-coupling’ revolution of the early 2000s, when major brands separated specialist production and implementation from the highly creative advertising agencies that ruled the industry at the time.

In the case of Ad Agencies, major global brands started to recognise that creative-led businesses were probably not the best people to manage the large-scale production processes necessary for advertising delivery.

Of course, brands also recognised that the margins applied by these creative agencies for production services were costing them an absolute fortune so, by making the change, not only did they considerably improve the delivery process, they made significant cost savings.

Today, it's inconceivable that brands would pass their entire regional marketing implementation budget to an advertising agency expressly chosen for their creativity.

The relevance to the IT Channel

So back to the IT channel and Gartner’s summary. A lot has changed in the IT sector in recent years and the channel is coming to terms with how it needs to shape up in the new world.

Digital business isn’t just important for our customers but is essential for our development and growth. How we invest hard-earned marketing and sales budgets needs to reflect the market we’re in, with ROI an essential factor in how we plan go-to-market strategies.

Just as for advertising, vendor brands are recognising traditional routes to market are inefficient and often result in poor performance, which is why I believe we’re at that crossroads and ‘de-coupling’ is the way forward.

My dilemma with the current channel structure

I faced a dilemma when I started working in the IT channel, some 6 years ago now. When I entered into this new world (for me), I believed that the whole rationale for an IT channel is access to customers, with distribution enabling resellers to sell the products they represent.

Recently, a senior figure in distribution told me that, in the eyes of their partners, the primary value of a distributor is to provide leads.  This is where my dilemma lies.

Counter-intuitively, distributors aren’t exposed to end users (another term I struggle with, but that’s for another time) and are ill-equipped to engage with them. Just like the Ad Agencies of the past, distribution is being forced to provide lead generation services because their vendors want it, their resellers need it and there is a significant margin potential for them resulting from it whether they do it well, or not.

What's the solution?

Demand creation is a complex, multi-disciplined operation that if not executed correctly, results in lost investment and diminishing growth. It requires an in-depth understanding of buyers and how they think, how they engage and how they buy. It certainly bears no comparison with channel recruitment, credit lines and warehousing, the traditional strengths of Distribution.

Is this the time to re-evaluate how you go to market and who’s best suited to deliver the results?

Beware lost investment

One last point on lost investment. Wherever you resource your sales and marketing talent, be mindful that these individuals jointly hold the key to ROI. Marketing’s job is to lead the horse to water, it’s the job of sales to make them drink.

If marketing isn't doing enough to inform better sales conversations, marketing investment will fail. However, if enough emphasis and follow up on sales making the calls at the back end, there will be no business.

The key is removing points of failure by creating a seamless process between teams of people who have a stake in and are accountable for, the end result.  It's the only way forward. 

Resources - The State of Marketing Budget and Strategy in 2023, Gartner

Author:  Max Sherwood, Director, The Amigos Network

email:  max.sherwood@theamigosnetwork.com