Marketing Channels Making Channel Strategy Work for You

Duane Bailey @duanebailey www.linkedin.com/in/duanebailey dbailey83@verizon.net

Agenda

•  Marketing Channel Basics

•  Why Channels

•  Channel Partner Selection

•  Channel Management

•  Channel Conflict

•  Winning with Channel Partners

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Marketing Channel Basics What Is a Marketing Channel?

The external contactual organization which management

operates to achieve its distribution objectives.

4 elements: 1.  external – exists outside the firm 2.  contactual organization – involved in negotiatory functions 3.  management operates – implies oversight by the firm 4.  distribution objectives – set goals and objectives

Source:  Marke-ng  Channels:  A  Management  View,  2nd  edi-on,  Bert  Rosenbloom,  New  York,  1983,  pp  4-­‐5  

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Marketing Channel Basics Where Do Channels Fit In the Mix?

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Marketing Channel Basics Meet the Players…

Channel  Manager  

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Marketing Channel Basics What Is the Role of a Channel Manager?

A leader with responsibility for achieving and balancing the firm’s and the channel member’s business objectives.

3 elements: 1.  leader – requires attributes of trust, communication 2.  achieving and balancing – means mutual assured success 3.  business objectives – distribution, sales, profitability 6  

Why Channels? Ask Yourself One Question…

Do you know all your customers?

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Why Channels? Consider 4 Perspectives.

1  

2  

3  4  

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Why Channels? The Impact of E-commerce.

True or False?

E-commerce has reduced the number of channel

intermediaries, wholesalers and retailers.

False.

New types of intermediaries have evolved. Can you name some examples?

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Channel Partner Selection What Do You Want to Accomplish?

Hypothetical Territory Goals: •  10% Year Over Year (YOY) revenue growth •  Drive brand preference •  Position brand for future growth •  Expand reseller focus •  Increase overall customer satisfaction rate by 5%

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Channel Partner Selection Recruiting Prospects.

What might you look for in a reseller? •  Demonstrated history of sales and customer satisfaction success •  Potential for increased brand consideration and win rates •  Feet on the street •  Skills needed to succeed in growth markets •  Base of competitive customers and a complementary solutions

portfolio

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Channel Partner Selection Recruitment Criteria. Business Profile:

–  Years in business •  Total: 3-5 •  Selling Legacy Products: 3-5 •  Selling Growth Products: 3-5

–  Number of locations: 1-2 –  Revenue and profitability (3-year history)

•  Total: YOY growth trends; average overall margin of 10-12% •  Products: 70% •  Services: 30% •  Some private-label services and/or willingness to resell manufacturer-

branded services –  Number of employees – indicate # w/ professional certifications

•  Total: 20-50 •  Sales: 5-10 outside; 2-5 inside •  Technical service and support: 4-6 on-site •  Customer service: 2-5

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Channel Partner Selection Recruitment Criteria (Continued). Specialization/Target Markets: •  Competitive products and current percentage of revenue •  Specialization/market coverage

–  Target vertical markets: •  Enterprise (health care, hospitality, legal, financial services and technology) •  Federal, state and local government •  Education (K-12 or higher)

–  Software applications, complementary products  Market Coverage Area: •   Washington, DC MSA (specifically Northern VA)  

Customer Support Plan: •  Includes metrics for measuring customer satisfaction. •  Pre-Sale Support •  Post-Sale Support

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Channel Partner Selection Recruitment Criteria (Continued). Business Plan and Forecast: •  Year 1 revenue plan (minimum $1M at retail equivalent), includes products

and services •  Additional staffing, with focus on acquiring new skill sets •  Training and development •  Professional certifications  

Marketing Plan: •  Promotional plans •  Target Market (Verticals, new vs. base customers) •  Anticipated promotions budget

–  Event marketing and demo equipment •  E-commerce/digital marketing strategy (includes social media)  

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Channel Management Now What?

“Teach them how to fish.” “Inspect what you expect.”

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How can you “teach them to fish?” •  Set expectations •  Know their goals •  Invest time with channel partners •  Deliver on promises •  Provide exceptional service •  Offer partner incentives •  Do joint planning •  Add value to their business

Channel Management Coaching for Peak Performance.

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Channel Management Coaching for Peak Performance. How to “inspect what you expect?” •  Joint sales calls •  Online listening •  Customer surveys and reviews •  Special pricing reviews •  Monthly forecasts

–  Drive accountability to individual performers •  Quarterly reviews •  Annual reviews/contract renewal •  Channel partner score cards

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What are some common causes of channel conflict? •  Lack of trust among channel participants •  Lack of credibility •  Lack of perceived value •  Lack of communications •  Ownership of customer relationships •  Misaligned objectives

Channel Conflict Sources of Conflict.

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What can you do to prevent or resolve channel conflict? •  Know your channel partners…personally •  Treat them with respect, not contempt •  Keep an ongoing dialogue •  Be open and honest •  Stay focused on beating the competition •  Strive for win-win solutions

Channel Conflict Preventing and Resolving Conflict.

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Winning with Channels T.E.A.M.

Together Everyone Achieves More.

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Winning with Channels Key Takeaways. Over the years, I have learned… •  To embrace the channel. •  Channels expand your reach and market share. •  Talking to customers is everyone’s job. •  Channel partners are business owners. •  Trust is your greatest asset. •  Channel conflict is unproductive. •  Multi-channel marketing is fun.

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Questions?

Thank you for your time.

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