Sometimes you’ve actually got to meet your customer
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Sometimes you’ve actually got to meet your customer

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Sometimes you’ve actually got to meet your customer Sometimes you’ve actually got to meet your customer Presentation Transcript

  • Sometimes you’ve actually got to meet your customer David Jenkins; i2i-management.com St John’s Innovation Centre; 8 Mar 11March 2011 managing sales channels 1
  • An outline of today’s workshop• How do you motivate buying decisions?• You don’t have a business if there’s no mechanism for enabling potential customers to make buying decisions and motivating them to do so in your favour.• This interactive workshop reviews the options, including the web, direct sales, distributors and franchises, provides a framework for choosing the right ones and explains how they should then be managed.March 2011 managing sales channels 2
  • Please note that it’s not about selling It’s about managing sales channelsMarch 2011 managing sales channels 3
  • This is how the workshop will proceed• Building the model – Where do we meet the customer? – Choosing the right channel• Direct sales, distributors, agents and franchises• Using the web – You can use the web for anything ...• Where does marketing fit in? – What should marketing be doing?• Channel conflict• Getting helpMarch 2011 managing sales channels 4
  • And what right have I to be here today?• Been there ... done that ... got the gold cards• Lived in a few places• Worked for some companies• Managed different sales channels• Used the webMarch 2011 managing sales channels 5
  • And forgive me ...• My background is B2B with a focus on products• This workshop should not be so limited and should embrace BtoC (and in fact CtoC) and services as well.• My language is going to be tilted towards BtoB and products but that will not be to exclude the rest.• Please challenge me if you think that I’m not getting the balance right.February 2011 doing business internationally 6
  • meeting the customer: what exactly does that mean? discover develop deliver market sell supply service or design• This is the value chain which I’ve just rediscovered• Just about every business can be represented this way. Just change the sizes of the boxes• So if this is what a business does where does it meet the customer, where does the buyer meet the seller ... discuss!March 2011 managing sales channels 7
  • Where does marketing fit into this scheme? discover develop deliver market sell supply service inbound strategic Internal tactical operational relationship marketing marketing marketing marketing marketing marketing• Marketing people will hate me for this but marketing is a resource function like HR and finance.• It takes place where ever the marketing resources need to be managedMarch 2011 managing sales channels 8
  • In the beginning we were all sole traders• Business people would interact themselves directly with customers• That’s little different to having a direct sales force todayMarch 2011 managing sales channels 9
  • And then came the middle man• Manufacturers especially would sell their products through ‘shops’• Shops are in effect distributors.• Shops exist in the same way todayMarch 2011 managing sales channels 10
  • And some of these engaged in eCommerce • Selling products without direct person to person contact is little different to what we call eCommerce • The point is there is no meeting and the customer makes his or her buying decision on his/her ownMarch 2011 managing sales channels 11
  • There was even a little marketing• I guess marketing used to focus on promotion• People must have thought about products, prices and place (channel)• They just didn’t call it marketingMarch 2011 managing sales channels 12
  • This suggests a model for today• Where do we meet the customer (if at all)?• Whose resources do we use? location remote meeting place customers site own own eCommerce site branded outlet direct sales resources 3rd party portal grocers shop distributionMarch 2011 managing sales channels 13
  • Today I’m going to focus on web and direct vs distribution• Meeting places clearly continue to be important• They exist for both B2B and B2C location remote meeting place customers site own own eCommerce site branded outlet direct sales resources 3rd party portal grocers shop distributionMarch 2011 managing sales channels 14
  • Choosing the right channel Which channel fits which business? ...discussMarch 2011 managing sales channels 15
  • The choices today are really no different to what they were then Web: route of • Obvious for software, low value items, BtoC and CtoC • Challenges you to ‘drive’ customers to you choice for many • There is no physical meeting between buyer and seller today • High fixed cost, low variable cost Direct sales: • Best for high value and/or technical items challenge of • You need to find the potential customer • Lots of control but issues of fixed cost and roll out managing people • Low fixed costs and rapid roll out possible Distribution: best • Same challenge of finding the potential customer of both worlds? • But mega management challengeFebruary 2011 Routes to market
  • Direct sales, distributors and franchises • Hands on management Direct sales • Develop best practice • Management by influence Distributors • 3 golden rules • Management by contract Franchises • Who’s the customer?March 2011 managing sales channels 17
  • Direct sales: managing what we do; develop best practice sales supply service Are we calling on Are we shipping Are we responding enough people? promptly? when we are needed? Are we calling on the Are we shipping Is our response right people? reliably? effective? Are we effective in our Are our customers Are our customers calls? satisfied? satisfied? Are we winning Are we keeping our Are we getting repeat business costs low orders?March 2011 managing sales channels 18
  • Your own sales+supply+service teams: learning how to do it cost per suspects per repeat buys as build awareness suspect quote; demo a % of the generated and trial stats installed base revenue per generate suspect develop prospect build relationship unit of installed base sales service productivity secure order service customer productivity measurements measurements quotes per supply order; the install equipment % sales to new productivity win:loss ratio customers measurementsMarch 2011 managing sales channels 19
  • Distributors: the 3 golden rules Don’t think of your distributor as a customer; its customers are your customers Don’t expect your distributor to do any serious marketing; it’s a sales, supply and service organisation Don’t expect your distributor to do anything for you if it doesn’t make a decent marginMarch 2011 managing sales channels 20
  • Distributors: the practicalities• However hard you try to influence them they are still independent• You will always be competing with other principals for resources• The distributor owns the customerMarch 2011 managing sales channels 21
  • Franchises: nice work if you can get it; think critical mass• A franchise is a hybrid.• On the one hand you have people dedicated to your products/services• On the other hand they’re not your peopleMarch 2011 managing sales channels 22
  • Agents are just a part of the channel• They just keep a look out for you• There’s little loyalty and they simply take a fee for introducing business• Good agents are fine but poor ones might drain you of resourceMarch 2011 managing sales channels 23
  • However you do it you’ve got to manage it Direct sales • Manage your own people • Manage the relationship Distribution • Manage your champion • Manage their people Franchise • Manage the relationshipMarch 2011 managing sales channels 24
  • Using the web: you can use the web for everything ... discussMarch 2011 managing sales channels 25
  • Using the web: you can use the web for everything • Be clever; make it easy for prospects to find youmarketing • Use every opportunity to highlight your presence • Your web-site is your catalogue sales • Make it easy for people to make the right buying decision • Classic eCommerce supply • Make it easy for people to buy from you • Your web-site makes it easy for your customers to stay with you • cement the relationship ServiceMarch 2011 managing sales channels 26
  • Where does marketing fit in?• Think of the 4Ps – Place: that’s channel and that’s what this is all about – Price: think especially about margins earned by distributors – Promotion: where does this take place? – Product: what’s the channels’ role in new product development?• For services people also talk about: – Process: how is this service delivered? – Physical evidence: how will the customer know that he or she has experienced the service? – People: what’s the role of people? How do we train, resource, manage and reward them?• What should marketing be doing? ... discussMarch 2011 managing sales channels 27
  • Where does marketing fit in? Back to the value chain • What’s the role of marketing? • Building awareness Sell • • • Generating leads Supporting sales activity Setting prices Supply • Establishing service standards including availability • Defining the process • Providing the physical evidence Service • Reinforcing relationships • Stimulating repeat purchasesMarch 2011 managing sales channels 28
  • Channel conflict: when to get it, how you manage it• In the simplest case of direct sales only ... – you’ve got to make sure that your sales people stay on territory. – that’s easy. You manage it.March 2011 managing sales channels 29
  • Channel conflict: when to get it, how you manage it• In the simplest case of direct sales only ...• If you’ve got 2 distributors ... – you’ve got the same issue – but you’ve got EU law to worry aboutMarch 2011 managing sales channels 30
  • Channel conflict: when to get it, how you manage it• In the simplest case of direct sales only ...• If you’ve got 2 distributors ...• You may be mixing direct + distribution ... – be clear about the rules relating to house accountsMarch 2011 managing sales channels 31
  • Channel conflict: when to get it, how you manage it• In the simplest case of direct sales ....• If you’ve got 2 distributors ...• You may be mixing direct + distribution ...• If you mix physical and web business ... – get the pricing right. – it won’t be easy.March 2011 managing sales channels 32
  • A final thought before we leave distribution? Why do it?• It’s a specific example of a more general question: should we do this in-house?• Go outside if someone else can do it better and it’s not an important strategic process.March 2011 managing sales channels 33
  • A final thought before we leave distribution? Why do it?• It’s a specific example of a more genera question: should we do this in-house?• Go outside if someone else can do it better and it’s not an important strategic process. what sort of process is this? standard across special to us industry how well do we do it? well keep it in house consider in-sourcing badly weve got a problem! consider out-sourcingMarch 2011 managing sales channels 34
  • Where to go for help• Distribution – Business Link http://bit.ly/eDeof8 (focus on export)• Franchises – Which Franchise? www.whichfranchise.com – British Franchise Association www.thebfa.org – Franchise directory www.theukfranchisedirectory.net – Business Link http://bit.ly/gRXTtF• eCommerce – Business Link http://bit.ly/fYltURMarch 2011 managing sales channels 35
  • David Jenkins i2i@davidjenkins.org.uk www.i2i-management.com +44 1223 236232 or +44 7739 759859 Skype i2i-management Twitter thisisi2iMarch 2011 managing sales channels 36