Hosted Communications Providers Looking to Boost Growth through Effective Channel Programs

June 3, 2014 at 2:47 PM

Fonality recently announced a new Marketing 360 channel program:

This new initiative demonstrates hosted communications providers' growing recognition of the importance of an effective partner channel in accelerating growth and improving customer service. My recent research on distribution strategies in the North American hosted IP telephony and UCC services market reveals that hosted/cloud providers are using a variety of partners including master agents (e.g., TBI, Intelisys, etc.), distributors (e.g., Ingram Micro), various traditional telecom system dealers and services resellers, data VARs, systems integrators, IT services providers and consultants and even moving companies and other businesses that act as agents. Business models vary from white-label relationships to simple resale, value-added services, commission-based agents, and so on.

Since hosted/cloud services have proven most appealing to small businesses, relatively small, local resellers with IP telephony expertise, good customer service and existing relationships with businesses in the area have been most effective in selling hosted IP telephony and UCC services. However, most hosted providers have partnerships with master agencies and distributors, which then use their own partner networks to reach end users. This helps scale the business faster and more economically.

The majority of hosted service are still offered by more traditional telecom resellers, but mostly those that have embraced the cloud model and understand its value proposition. Successful partners are the ones that can employ a more consultative approach whereby they truly understand customer needs and can propose options that best meet customer needs. This model is very different from one-time sales of traditional equipment, which used to be common practice among some resellers.

Data VARs, systems integrators and more IT-oriented companies are increasingly tapping into this market. They are still lacking some skills required to properly implement and manage real-time communications solutions, but some are investing in training and operational restructuring to be able to add voice and UC to their services portfolio.

Service provider approaches to their channel vary. Some are looking to acquire and entice partners through generous commissions and revenue sharing. Others are focusing on education, marketing collateral, and help with lead generation. Overall, most providers are looking to expand their channel as an effective way to grow and grab market share in an extremely fragmented and still nascent market. Some providers, however, are focusing less on the number of providers and more on the quality of the channel—the specific partner mix and capabilities. Only few providers have made a deliberate choice to sell only directly.

Going forward, access to a competent and loyal channel network will become a critical success factor in this market. Partner relationship sand capabilities will play a key role in both accelerating customer acquisition and improving customer support, which can help increase customer satisfaction and reduce churn.

What do you think? What do an effective partner channel and a successful channel strategy look like in the hosted/cloud communications market?

Tags: cloud UC, Fonality, hosted communications, hosted IP PBX, partner channel