Marketing ChannelsMaking Channel Strategy Work for You

Duane Bailey

@duanebailey

www.linkedin.com/in/duanebailey

dbailey83@verizon.net

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Agenda

• Marketing Channel Basics

• Why Channels

• Channel Partner Selection

• Channel Management

• Channel Conflict

• Winning with Channel Partners

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Marketing Channel BasicsWhat 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: Marketing Channels: A Management View, 2nd edition, Bert Rosenbloom, New York, 1983, pp 4-5

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Marketing Channel BasicsWhere Do Channels Fit In the Mix?

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Marketing Channel BasicsMeet the Players…

Channel Manager

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Marketing Channel BasicsWhat 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

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Why Channels?Ask Yourself One Question…

Do you know all your customers?

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Why Channels?Consider 4 Perspectives.

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2

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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 ManagementCoaching 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 ConflictSources 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 ConflictPreventing and Resolving Conflict.

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Winning with ChannelsT.E.A.M.

Together Everyone Achieves More.

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Winning with ChannelsKey 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.