Soccer star who fell into IT

In an IT career spanning 19 years, Neill Campbell, Lexmark’s channel manager, has seen it all – channel consolidation through acquisition, vendors with no channel strategy falling over ... just about everything.

He has straddled both sides of the channel fence and has some clear thoughts about the roles that distributors and vendors play. “Distribution is about being able to offer high-end value and vendors need to be able to develop a channel and invest in delivering programs.”

He is adamant that vendors without a proper channel program will fail in the marketplace. The distribution part of the channel is very high paced, with products across many vendors.

“While some specialise and concentrate on a select number of vendors – with success – the majority can’t afford to do that.

“Where vendors forget this and try to restrict their channel, they increase their chance of failing. They need to remember the partnerships they have created with their channel. In order for vendors to succeed in the marketplace, they must understand their channel’s cost structure to get their customer to do what they want.”

Campbell believes there is no one single program that will work for all vendors and their channel partners. Rather, “vendors need to allow partners over time to add value, in addition to moving products”.

At the same time, it is important for a channel business to be profitable in its own right, he says. In dealing with customers and vendors, resellers need to choose and work with partners that will help the two meet a financial goal, use alternative ways to address a tight market and have proper Web-based initiatives, he says.

What’s hindering distributors?

Campbell believes a distibutors apacity to invest in new or emerging markets – such investments needs to form part of the vendors go to market strategy and vendors need to reward distributors for their level of investment. These rewards could be in the form of exclusivity, additional rebates/margin, funded headcount or reward for effort.

Distributors like any other business require a level of predictability in their business – not knowing a vendors strategy well in advance and how a vendor will engage in variance segments of the market can have devastating effects on a distributor’s business model. If vendors chop and change from direct to indirect and back again, there will be a lack of confidence from distributors and a reduction in the level of investment they make.

“The role of distribution should be agreed on by both parties and well communicated within each organisation,” he says.

Credit to resellers. and insurers continue to tighten credit limits and this either forces a distributor to offer less credit overall or self insure part or all of the credit risk.
Campbell saus, “Resellers then look for alternative sources of supply and if credit is not available then sales tend to be affected.”

Covering the breadth of resellers in a profitable way. Vendors will continue to want distribution to help address and touch a broad base of resellers. The challenge is how to do this in a cost effective manner. Back-end systems to deliver E-Commerce and web tools are expensive as is headcount for BDM’s or call centre management. It is important that vendors and distributors work in unison so that resources are not duplicated on the same partners.

“There will always be some overlap, the challenge is how to ensure that overlap is minimal,” he says.

Distributors need to be able to predict future trends. As knowing what market segments will be the future sweet spots and ensure that the right product mix and promotions are available to support these segments.

Services opportunities

Like most, Campbell believes there are plenty of opportunities for the channel in the SMB space. He says partners need the right building blocks and the right channel network in place to be successful. “One of my plans for Lexmark is to get our partners skilled up, so they can manage printer services for their end users,” he says.

Campbell says channel players need support from vendors to help them develop their skill sets to sell services and move away from being pure box movers.

“I think there is room for resellers to simply sell products. However,