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)?
June 24, 2007
In an indirect channel model, Influencer Marketing is hard work. The main problem for Vendors selling through an indirect channel is that they are not actually in any form of business contact with the Influencer. It could be a Consultancy or a System Integrator, but they are not reselling the Vendor’s products, they are not either necessarily in a business relationship with the Reseller or the Distributor.
So how do you reward an influencer for convincing their client to buy a particular Brand? The only way is to write him a cheque and that is where things get difficult. What audit trail do you have? The Influencer says he convinced the customer to buy your stuff, the Reseller invoiced and installed it, the Distributor bought it from the Vendor and shipped it to the Reseller. You now need to convince your Finance department to write a cheque…not easy.
In a direct sales model, companies like Dell actually invoice the End User that was “influenced”. They therefore have direct visibility of the whole business process and can therefore pay a commission to the Influencer who reported the opportunity.
In the Pharmaceutical industry, the influencer is the Doctor (GP) who prescribes one medecine rather than another. And in certain countries, the Pharmaceutical companies monitor the sales of their branded molecules via the pharmacies situated in the vicinity of a medical practice. This gives them a view of which GP is doing a good job at promoting and prescribing their products. They might then invite the most influencial GPs on a study tour of -say- the Seychelles.
In the IT business, Vendors go to a lot of trouble to influence the Influencers. Its tough, but if you crack it, it really does pay off.