The GOALS of the manufacturer and those of the distribution channel are often at odds.
The channel wants to focus on high-margin products and increase total sales, while manufacturers want channel partners to promote the whole line and increase market share for the manufacturer’s brands.
Channel partners want more autonomy and exclusive access to end users, while manufacturers want more control and their own access to end users.
Partnerships help resolve these issues by enabling both parties to focus on end users’ needs and agreeing on strategies that build shared profit across the entire channel.
Everyone has opinions about how best to segment and target channel partners. Ultimately the goal is dealer, distributor or customer loyalty but getting to that point often requires a variety of strategies.
This chart shows a classic segmentation of dealers or dealer reps:
New or low-performing reps who need simple onboarding strategies to support and engage their efforts.
Lower-middle performers who may need training to find their fit with your brand or products.
Higher-middle performers who have found a way to gain some momentum in your direction and should be rewarded for their efforts.
Retaining top performing reps requires a mixture of all of these strategies, plus a healthy amount of recognition for their efforts.
High performing channel partners demonstrate a variety of characteristics:
They have clearly defined goals for representing your brand and selling your product.
They have the necessary knowledge and skills.
They are aware of how they stack up and how they can improve to meet their goals.
They are emotionally engaged with your brand.
They are focused on the right sales and marketing activities.
They understand the relationship needs to benefit both partners.
But what about the rest of your channel partners? You can reach out to middle performers and get them moving in your direction with a few simple strategies. But it all comes down to sharing common goals for success.
Shared goals can only be accomplished through strong business relationships that demonstrate:
A high level of trust
A common understanding of marketplace issues Joint business activities
Shared resources and best practices