Exclusively Speaking

Several vendors offer incentives to keep their dealers loyal. Exclusivity programs offer channel partners various rewards such as increased discounts or more leads for their agreement not to offer competing products. The original logic had to do with mindshare. If the dealer is exclusive to a brand or vendor, then it will stay focussed on that brand or vendor. From a vendor's perspective, exclusivity programs align the definitions of success and profits between dealer and vendor.

The problem today is that dealer success and profits are not so easily aligned with a single vendor any more. For one, product sales represent a decreasing slice of the revenue pie, and secondly, dealers are expected to offer the best solution. It is highly unlikely that the best solution can consistently come from the same vendor.

The days of the single vendor dominating the entire communications solution are over. UC systems inherently need to play with other systems, and encouraging dealers to keep their head in the sand isn't helping the customer, dealer, or even the vendor imposing it. We've seen this movie before - it was called the Bell System.

I have not seen any exclusivity programs that were mandatory. The ones I have seen are more carrot than stick. Though still, it is an obsolete model. Times have changed, and vendors need to look at their partners as more than a cash register. Vendors that focus on partner success will win the long game.

We know sales can be tough, and we know that no vendor offers the best solution to every customer. So why encourage partners to fail? If brand X isn't right for the customer, the partner either walks away (losing an opportunity) or pitches an imperfect solution damaging credibility or potentially denying the prospect of a better solution.

The million dollar question is: are UC VARs dealers or trusted advisors? I expect the Chevy dealer to tell me Chevy's are best, but I expect more objectivity from a trusted advisor.

These programs force dealers to trade short term gains of exclusivity incentives for the long term gains of diversification. Too many vendors fear "diversification" for multiple reasons. They want to share secrets, they want mindshare, they want loyalty - but what they really want is a profitable healthy channel partner.

The prescription here isn't to add new vendors, but to challenge the artificial boundaries imposed by exclusivity programs. VARs need to weigh the rewards of exclusivity against the benefits of a broader line card. Of course, the problem with adding multiple vendors is each brings its own minimum sales commitments and costs. Those costs can be too much for small dealers, and that's why exclusivity programs thrive with SMB brands.

Last week ShoreTel recognized Black Box, a communications system integrator, with an award for achievement in customer satisfaction. "Black Box's exceptional Net Promoter Score reflects an industry-recognized world-class level of professionalism and customer care in all aspects of the customer experience. Black Box ensures that customers are not only satisfied, but delighted with ShoreTel products and services," said Don Joos, vice president of global services for ShoreTel.

Black Box was also recognized earlier this year by Cisco. It received a Customer Satisfaction Excellence Gold Star from Cisco in 2012, and a customer satisfaction award in 2011. Black Box also received two top sales awards from AVST in 2011.

Clearly, not being exclusive to one vendor works for Black Box. Even with vendors that offer exclusivity incentives such as Mitel. This fact sheet states "Black Box Network Services is the largest Mitel Solutions dealer in North America with design, implementation, and support capabilities throughout the United States and Canada." The firm received a Silver Tech Award from Mitel in 2010. Black box renewed a major five year agreement with Mitel in 2012.

In 2008, Black Box also agreed to offer UC solutions from NEC, but also passed on its exclusivity benefits. The firm quickly became an NEC Triple Diamond associate and renewed its agreement in 2010.

Black Box features several more partners on its website including Aastra, Alcatel-Lucent, Polycom, Siemens Enterprise, and Toshiba. Adding this many partners isn't practical for most dealers/SIs. Black Box did over a billion in revenue in 2012. The firm has 194 offices in 141 countries. It even earned a spot on InformationWeek 500 List of Top Technology Innovators in 2012.

The sea of prospects is too small to limit a UC business model to just one vendor. There are optimal category leading solutions for contact center, hosted services, wireless integration, messaging, and more. Exclusive dealers need to take a hard look at the arrangement.