Distribution's Role in Creating End-User Demand

It's been a while since Gartner published, The State of Marketing Budget and Strategy in 2023, where it nailed the challenges of the current landscape with a striking statement: "It’s not the dollar in your pocket that counts, it's what it buys."

This hit me with a sense of déjà vu, reminding me of the advertising industry’s 'decoupling' revolution in the early 2000s, when major brands separated creative advertising from production and implementation.

Back then, global brands recognised that while creativity is essential, creative-led agencies weren’t the best option for managing large-scale production. They pivoted to specialist production companies to streamline processes and save money. This separation became industry standard because it worked—and I wonder if a similar shift is on the horizon for the IT channel.

The Parallels Between Advertising and the IT Channel

Gartner’s statement got me thinking about the IT channel’s current structure and its growing inefficiencies. Just as advertising agencies struggled to manage both creativity and logistics, IT distributors today face a similar dilemma. They’re increasingly expected to offer lead generation services— a task they aren’t necessarily equipped for because they don't have direct connections with buyers — while still maintaining their traditional strengths in channel recruitment, warehousing, and credit lines.

In advertising, the solution was clear: separate what you’re good at from what you’re not. For the IT channel, this might mean acknowledging that traditional distribution models are no longer enough in today’s fast-paced, digital-driven world. For distribution to continue to receive funding from vendors to manage activity on their behalf, they need to either put it in place themselves or work with specialised partners for demand creation and marketing execution.

To do this it must be recognised demand generation is no longer a stream of emails followed up by a few phone calls dished up in a quarterly package, but a way of life that puts buyers at the centre of the universe.

Where Distribution Can Pivot

The biggest opportunity in this potential shift lies in embracing the change. Distributors have an immense chance to reinvent their value by focusing on core strengths: logistics, partner enablement, and channel infrastructure. Meanwhile, they could collaborate with specialists who are deeply entrenched and experienced in creating and converting demand and influencing onward purchases. This approach could not only improve ROI for everyone involved but also streamline operations by eliminating inefficiencies.

However, distributors need to accept that lead generation might not be their strong suit for this to work. Like the advertising agencies of the early 2000s, they could still thrive, but with a more precise focus on delivering value where they truly excel.

The Opportunity: Specialisation Equals Better Performance

About those buyer behaviours. We’re at a crossroads where the channel has to adapt. Demand creation is no longer a simple task of filling a pipeline; it’s a multi-faceted, research-heavy discipline that requires expertise in understanding buying intent, engagement patterns, and sales-readiness. Distributors that cling to old models may find themselves outpaced by leaner, more specialised competitors.

Distributors can unlock new growth opportunities by decoupling demand creation from traditional distribution roles. Vendors will see better results when they collaborate with experts in lead conversion, while distributors focus on helping partners close deals more efficiently.

Embrace the Change, Avoid Lost Investment

If there's one takeaway from this, it’s failure to embrace change leads to lost investment. Marketing and sales need to work together seamlessly.  This means more than just throwing money at demand generation, but full alignment with specialists who can execute with precision, and accountable in the process.

This isn't just a defensive move to protect budgets—it's an offensive strategy to supercharge growth with their vendors and channel partners. Those who take the opportunity to optimise their efforts will emerge stronger in this new landscape.

So, is it time to rethink how your business approaches go-to-market strategies? The signs all point to ‘yes.’ Just as the advertising industry learned, the channel could be on the cusp of a decoupling revolution—one that holds massive potential for those who recognise the change and seize the opportunity.

 

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

Author: Max Sherwood, Director, The Amigos Network
Email: max.sherwood@theamigosnetwork.com

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