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The Evolving Role of Channel Marketing

Presented by Channel Management Professionals

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Objectives

• To help the Channel Marketing team create a “baseline” for the channel marketing function

• To identify areas of potential interest and growth

• To discuss how roles can/will evolve

• To identify how stakeholder requirements may change

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Agenda

• An Organizational Perspective– How/where channel marketing reports– Different models and rationales– Pro’s and con’s– Trends

• A Functional Map– The “roots” of channel marketing– The “gray zone” -- roles and functions that may be migrating to

channel marketing– The gaps – functions missing in most organizations– The borders – roles and functions that most likely will never

migrate to channel marketing

• Topics for discussion

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The Two Faces of Channel Marketing

1- to -1 initiatives

Partner Program

Infrastructure

Customized joint marketing initiatives for

the “critical few”

Consistent policies, requirements, benefits and management across a broad range of partners

Channel Marketing

includes both responsibilities

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Organization: WHERE Channel Marketing Reports is a Function of the Company’s Ability

to Perform in a Multi-channel Environment

STAGE I

STAGE II STAGE III

?

STAGE I - a company has little experience/comfort with channels

STAGE II - multiple channels well-integrated into the company’s culture and understanding

STAGE III - cost is a primary driver of all organization design

•move to centralized marketing

•Keep as many customer-facing resources in the sales organization as possible

The three stages of channel organization

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Organization: Stage I – Channels is a Separate

OrganizationVP

Marketing

Product Corporate

VP Sales

Direct Sales

Sales Ops

VP Channels*

Channel Sales

Channel Marketing

Ops

In the early stages of a company’s marketing through channels, many organizations give “channels” a separate organization:

•Clean “line of sight” to and from senior management

•Separate commitments to and from product teams

•Ability to develop processes and policies specific to channels

*In some companies, this title also has responsibility for Business Development/Alliances

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Organization: Stage II – Most Organizations Quickly Evolve to a Single

Reporting Structure

VP Marketing

Product Corporate Channel*

*Communications only

VP Sales

Sales Ops

Direct Sales

Channel Sales

Channel Sales

Channel Marketing**

or

**strategy, programs, policies

A single reporting structure:

•Promotes channel harmony

•Encourages joint planning and teaming

•Uses support resources efficiently

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Organization: Stage III – Cost is Driving

Channel Marketing’s Migration to the CMO

CMO

Product Corporate Channel

VP Sales

Ops Direct Channel

Channel Strategy

Cost is driving scale and specialization decisions at every level of the organization. For Channel Marketing, this often means:

•A change in reporting to the CMO (a relatively new position created to emphasize the importance of marketing to the organization)

•A renewed emphasis on professional tools and techniques that have been developed over the past 10 years

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A Typical Channel Marketing Organization

• Traditional functions within a Channel Marketing organization:– Field marketing (for each region)– Demand creation– Indirect channel marketing– Channel development– Global alliance marketing– Direct channel marketing

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Functionality: Today Channel Marketing is Increasingly a Critical Bridge between

the Product and Sales Teams

• The evolution of the channel marketing function:

THE ROOTS

THE GRAY ZONE

THE GAP

THE BORDERS

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Functionality: Channel Marketing’s ROOTS are in Communications

THE ROOTS

Traditional Deliverables of Channel Marketing

Deliverable With help from:Communications•Newsletter Marketing Communications

Demand and Lead

Generation •Product reviews Product & Solutions Mktng•Analyst briefings Marketing Services•Lead gen programs Marketing & Sales Opns.

Sales Support •Sales literature & fee Product & Solutions Mktng

structure Marketing Services•Solutions reference Product & Solutions Mktng

catalog Marketing Services

Event Planning•Trade show coordination Marketing Communications•Cross channel events Marcom & Strategic Mktng

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The Challenges to the Traditional Channel Marketing Organization

THE GRAY ZONE

Increasingly, Channel Marketing is called upon for some or all of the following deliverables:

•Market analysis and metrics

•Channel satisfaction

•Channel economic analysis

•Channel strategy definition

•Process and systems definition and management

•Reporting infrastructure development and management

•Development of partner program and components

•Channel relationship management

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The “Gray Zone”: Increasingly, Channel Marketing is Called Upon to Centralize

Activities

Function Historically Performed by:

Market Analysis & Metrics–Competitive channel strategies and tactics–Shared market research

Market Intelligence

Channel Economics-Functional compensation

-Discounts, rebates, commissions, etc.

-Trade-off analyses (Given equal effectiveness, which channel category costs less?)

New function – no one has historically done this, but it is becoming increasingly important

Channel Satisfaction Surveys Channel Sales

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The “Gray Zone”: Increasingly, Channel Marketing is Called Upon to Centralize

Activities

Function Historically Performed by:Channel Strategy Definition (global, recruitment, funding, differentiators)

Channel Sales

Process and Systems Definition and Management•Contract management•Problem escalation procedure•Conflict management policy•Qualification process•Co-op reimbursement system•MDF management•PRM system data management•Partner Hotline

Product teams and/or channel sales

Sales operations

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The “Gray Zone”: Increasingly, Channel Marketing is Called Upon to Centralize

Activities

Function Historically Performed by:Reporting

•POS (Point of Sale) – what specific customers the channels sell to

•Competition

•End-user names

Sales Operations

Development of Partner Program and Components

•Training and Development–Product–Sales–Channel managers

•Certification program

•Technical newsletter

•Discount Structure

Sales

Product/sales

Product marketing

Channel sales

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The “Gray Zone”: Increasingly, Channel Marketing is Called Upon to Centralize

Activities

Function Historically Performed by:

Channel Relationship Management•Advisory boards:

–Product advisory boards

–Partner advisory boards

–Executive level boards (senior execs from both vendor and partner)

Channel Sales plus:

Product Marketing

Channel Marketing

Channel Marketing

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The Gap: Most Organizations Continue to Have Two Major Gaps in Their Go-to-

Market Functions• End-user segmentation – understanding how

target end-user segments purchase software:– Who– What– Why– Where– How– When

• Channel Segmentation – understanding each channel’s underlying business model

“buying behavior” segmentation

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The Gap: The Importance of End-User Segmentation

•Who is buying

•Decision-makers and influencers

•Why are they buying

•What are they buying

•“product” vs. “solution”

•Front market vs. aftermarket

•When are they buying

•Budget cycles, etc.

•Where are they buying

•Channel preferences

•How do they buy

•AVL (Approved Vendors List)

•VPA

•Centralized vs. decentralized

•Identify the correct targets for marketing messages

•Create meaningful messages

•Develop powerful sales tools for the channel sales team

ALLOWS CHANNEL

MARKETING TO:

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The Gap: The User-Defined Channel Template Sets the Stage for Channel

Marketing’s Value-Add

PRE

SALESALE

POSTSALE

ON-

GOING

Demo

Needs assessment

Config assistance

Bundling

Installation

Terms

Training

Tech Support

Updates

New product information

Allows Channel Marketing to:

•Recommend and develop appropriate channel selection metrics

•Recommend and develop appropriate support programs

•Track channel success by critical functionsEnd-User Requirements during the Buying

Process

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The Gap: The Importance of Channel Segmentation

•Channel size

•Business mix

•Product mix

•% of revenue from our product category

•Brand mix

•Genesys share of category

•Customer mix

•Geography served

•Resource mix

•Margin expectations

•Set reasonable expectations for channel performance

•Create compelling channel value propositions

•Create program components that add value to both the company and the channel partner

ALLOWS CHANNEL

MARKETING TO:

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The Borders: Many Functions Will Probably NEVER Migrate to Channel Marketing

Function Owner• Proactive Channel Recruiting*•Business plan development and management in the field*• Incentive Plan Program participation estimates•Channel advisory board relationship management*

Sales

Sales

Sales Operations/Finance

Sales

•Technical support•On-line order entry and status•Budget to actual sales measures•Backlog management process•Product development

Tech support

Sales operations

Sales/sales operations

Sales operations

Product/Engineering

THE BORDERS

THE BORDERS

*Channel Marketing plays a key role in developing the infrastructure to support these activities.

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Summary and Discussion

The Roots The Gray Zone

The Gap The Borders

Where does the team fall on this functional continuum?

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Questions for Discussion

• Where do you see the team’s role heading:– How might this impact the skills required of the team– How might this impact the way the team will need to

work with other parts of the organization– How will this impact resource requirements? What

needs to be different:• Today• In the future

• What are the current strengths of the team?• What are its greatest challenges?