2nd Quadrant Channels

Channels
“Para multiplicar,…,
hay que saber dividir.”
(To multiply…one has to know how to divide) -Anonymous

Topics
Definition
Importance of Channels
Examples of Channels
How to select Channels
Channels: Success Factors
Developing Channels
Business Development
Activity
Gestalt of Sales
2009 Copyright

Objectives

At the end of this session the student should be able to:
Define the termChannels
State why Channels are important
Develop a company Channel strategy
Identify three potential types of Channels
Develop and apply an evaluation criteria
Develop an Action Plan to engage a Channel

Gestalt of Sales
2009 Copyright

Definition: Channels
Any means that connects your Company’s
Product / Service with Customers

Who do Customers buy from?
How do they buy?
Which is best for each type of Customer?

In the end…customers Choose their preferred channels
For every problem of the human endeavor, there is always a solution that is neat, simple and…wrong (H. L. Mencken)
Gestalt of Sales
2009 Copyright

Definition: Channels (Cont’d)
Gestalt of Sales
2009 Copyright

In the context of:
A complex sale
Several decision makers
Long sales cycle
Complex functionality
Large investment per contract / sale
Product and professional services
Business to Business

Terminology
Partners
Strategic Alliances
Third Party Resellers
Distributor
Wholesaler
Gestalt of Sales
2009 Copyright

Importance of Channels
Once considered only for “simple sales”:
Retail / Consumer
Commodities
Product maturity from “direct” => “channels”
70% of Global organizations
GNP transacted from 50% => 65% by 2010*
Gestalt of Sales
2009 Copyright

Importance of Channels(Cont’d)
Increased Reach:
Geographical
Verticals
Customers
Establish Market Presence
Co-marketing
Web site cross referencing
Enhance / Build Credibility
Sponsorship
Expertise in sector
Complement the Solution / Offering
Prime / Subcontractor
Teaming Agreements
Full Turn Key projects: H/W, etc.
Lower Cost of Customer Acquisition / Relationship
Promotions
Research
Sales calls
Gestalt of Sales
2009 Copyright

Importance of Channels (Cont’d)
Reduce time to market
Complementary Resources, vgr:
Local => Lower Cost
Special skills
Infrastructure
Local presence: Office
Legal presence:
Contractual obligation
Fiscal: taxes (retention – withholdings)
Post Implementation Support
Gestalt of Sales
2009 Copyright

Examples of Channels
Sales Reps. / Agents
Complementary Solution Partners
System Integrators
Consultants
Hardware Vendors
VARs
Existing Customers
Competitors?
Web based tools
Marketing collateral
Demos / Presentations
Video-testimonials
Training
Direct Sales Force
Internal and External
Account Management
Marketing Department
Gestalt of Sales
2009 Copyright

How to select Channels
Which Channels align best with:
Products?
Customers’ needs?
Target market?
Geography
Vertical
Sales Strategy / Method?
Your company’s vision and commitment to customers?
Revenue objectives
Which Channels are :
Receptive?
Available?
Strategic?
Long term vs. Short term?
Which Channels:
Are more profitable?
Gestalt of Sales
2009 Copyright

Channels: Success Factors
Management
Structured model
Effective communications
Gestalt of Sales
2009 Copyright

Channels: Success Factors (Cont’d)
Decision making:
Speed and clarity
Milestones
Contingency plans
Flexibility:
Negotiating guidelines
Receptiveness to alternatives
Team coordination:
Communication
Pre-scheduled events
Methodology: PM
Common goals
Resources:
Skills
IT Resources
Support team
Gestalt of Sales
2009 Copyright
Market Development
Diversification
Innovation
Penetration

Developing Channels
Training / orientation
Represent your products fairly
Support adequately
Go To Market initiatives / campaigns
Website cross referencing / Trade Shows
Pricing strategy
Complementary
Consistent
Sales process
Parallels customers’ purchasing process?
Gestalt of Sales
2009 Copyright

Business Development
Alternatively, Channels can be managed by a:
Business Development Manager, or
VP of Strategic Alliances, etc.
Responsibilities:
Marketing
Revenue
Product Development
Job description: see sample
Gestalt of Sales
2009 Copyright

Activity
Profile your company and products
Select a product
Identify a (new) target market
Develop a channel selection criteria < 5 characteristics
Identify three (3) potential channels
Rank the candidates according to the criteria
Recommendation: Students will make a 5 minute presentation with 5 minutes for Q&A
Gestalt of Sales
2009 Copyright

Channel Strategy
Gestalt of Sales
2009 Copyright
Using a template similar to this, develop your company’s Channel Strategy

References
How to Develop Your Sales Process - Marketing M.O.
Gestalt of Sales
2009 Copyright
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