July 30, 2008
How will you measure your business?
Selling though a channel fundamentally changes your access to market intelligence. If you are not prepared for it, you will lose visibility of where your products are going, who is buying your products, what are they purchasing, how many and when etc…Channel partners are usually happy to share most of this information with you, provided they are certain it will not be used to play against them. If they don’t trust you, they will share the information after the sale has occurred; if they trust you, they often involve you in the sales process and always inform you of what they are working on. It all comes down to whether your sales commissions are “route-to-market-neutral”, which means that the sales people get a commissions regardless of who invoiced the customer.
- Does your distribution contract require POS (Point of Sales) reporting? This is something you can insist on.
- Most distributors expect to see their reporting costs paid for (0.5%)
- Do you know what reports you need and how often you would like them?
- Have you developed or acquired the tools to collect and analyse the information
- Have you identified the people who will be responsible for producing the market intelligence?
July 1, 2008
Part 3: How will you roll-out your plan?
Working through a channel doesn’t mean you can just relax and wait for it all to happen. On the contrary, your initial efforts will need to be significant if you want your channel sales to take off.
Build the right team to work with your channel
- Consider recruiting an experienced channel manager rather than promoting one of your direct sales people
- If you can afford it, create a channel marketing position
- You can adjust your order management team
- Channel partners are good at using on-line tools. Are yours ready?
Is your finance organization ready for a different business model?
- You will be collecting larger amounts with different payment terms and different payment “habits”. Resellers are often strapped for cash…
- You will be paying out money or making credits in the form of Co-op advertising support or Market Development Funds. This doesn’t happen in a direct model
- You might need to pay finder fees to people you aren’t actually trading with such as Influencers (this concept is one of the most difficult for financial departments to cope with)
Can your marketing policy and organisation handle the requirements of your channel strategy?
- You probably need to re-balance your marketing budget
- Your partners will expect support through co-operative and market development funds (Co-op and MDF in channel lingo)
- At some point, you will need to build your brand and product awareness in the channel, should you plan a Marcom budget for this?
- How will you help your channel promote your products on their web sites?
If you actually ship stuff:
- Check your packaging (cartons, cases, pallets, containers, etc…)
- Check your part–numbers (UPC codes are sufficient)
- Does your price list provide for volume orders?
- Are your logistics ready for a change of pace?
- Do need the logistics you had up to now?
If you sell software:
Can your systems report by whom the revenue was generated
If you provide services
Can your channel partners resell them (do they have a part number)?