Good day and thank you for taking a moment to view and listen to my philosophy of channel management through Value and Clarity. This is a brief overview and not intended to be an authoritative treatise on channel management…but rather a quick look at how to define what a channel is and some ideas on how to start addressing the needs of the players within it. My aim is not to make you an expert in every nuance of managing a channel, it’s to provide some food for thought as you move forward in your market.
During this presentation we’ll begin by taking a quick look at my bio and from there delve into what I mean when I talk about channel and value. Next we’ll explore the mechanics of a channel and define the elements that make it up. Once we have those pieces together, how to approach the task of channel management and being able to define it’s varied elements, we’ll then move on to strategies for making your channel more effective. No conversation on channel would be complete without discussing how to implement change so we’ll examine that and wrap up with trends in the profession.Finally, I’ll visit the topic of ‘Clarity’ and why it is essential to your success with channel management.
I am a business professional and former US Marine. Upon Honorable Discharge in 1996, I gravitated toward software and have been successfully employed in the technology sector ever since. I am presently employed as the Channel Manager for Smead Software, a division of Smead Manufacturing. I manage and work with over 300 dealers and 27 direct sales resources. Channel resolution, training, contracts, sales, presentations, GSA, recruitment, coop marketing…I’ve done them all successfully with software for a manufacturer. I was hired specifically to be a brand champion and ease conflict as Smead introduced a direct sales channel for the first time in their 100 year history. I regularly perform negotiations between our dealer channel and direct sales resources as well as help them both work together to close business. I am a brand champion like no other and I have the experience, energy and enthusiasm to move the needle for any channel.
In its simplest characterization, of course, your channel is the distribution network for your product or service. My definition is somewhat different in that I focus not only on what it DOES but rather what it IS….which is VALUE.If I were to hazard a guess as to why you are viewing this presentation, I would be pretty safe by placing money on the bet that you have trouble with your channel…they don’t rep your line very well, you don’t like their business practices, they think that you don’t do enough for them…and on it goes. What that all stems from, I believe, is a fundamental misconception that all you do is produce a good or service and all they do is sell it. When in truth what you both do is provide VALUE…one to the other. Your widget is not just a thing, it’s prosperity for the families of the people who are selling it and their business is not just a storefront it’s an opportunity for you to provide more and better prospects for your company and to the people who work for your organization.When you approach your channel in a fashion that respects VALUE…not only the value to your bottom line, but also the value to their bottom line…what you get from your channel are sustainable, long term PROFITS.
Nowthat we’ve established our perspective, let’s take a closer look at the mechanics of a channel.It all starts with you. The ‘you’ being your primary face to your channel partners. Maybe that’s a Channel Manager, perhaps an inside account manager or external sales force…in any event it’s important to establish right up front who has the point position on working with you channel partners. They need to have a clearly defined set of goals to reach and the tools to help them be successful. We’ll talk about that more in a minute.Next, I have delineated VARs, or Value Added Resellers, as a loose way of defining your dealers. They may be sophisticated integrators, laser focused boutique shops or maybe they’re general in nature and you are one of their many lines of business. In any event, they are the businesses that sell your offering and every one of them is unique in their own way. Consequently, you need to deal with them all and you also need to deal with them all individually. One common way to slice this onion is to assign them to a subcategory that is roughly equivalent to bronze, silver and gold based on their capabilities. They may OEM your product or maybe they are a SaaS model that uses your technology, but they are without a doubt the most demanding part of your distribution.I have also indicated on the slide a third channel which I define as ‘Patrons.’ Patrons are the most overlooked channel as they rarely ever sign agreements or sell anything directly for you. But in terms of the ‘hand that feeds the mouth’, they are a remarkably impactful group. These are the folks in the user groups, the industry experts and let’s never forget, your own customers. They are an indirect channel, if you will, but arguably the most important tributary in your channel’s ultimate success.
With the pieces of the channel puzzle defined, let’s take a closer look at some of the art of making those elements work. At the core of your channel is, of course, your direct organization. Regardless of what it is that you’re selling, you need to know first who’s selling it and then how it’s being sold. While this may be an oversimplification and the execution of any plan can be difficult…it is no more complex than knowing your product and understanding how its appeal can best be presented by a sales agent. What you have at your disposal to enable the understanding and acquisition of your product is where to begin Channel Management 101.For the sake of this presentation, we’ll assume that you are a Channel Manager of a typical manufacturer and that you have both direct sales people and a dealer channel. There are some essentials that need to be addressed and we’ll go over them from 50,000 feet to give you an idea of how to organize your planning. As a Channel Manager, you need to carefully allocate your personal focus and rely on your corporate team members to assist you in aligning the channel. I believe that a good channel person needs to have a bit of the diplomat in them and that your sales cycle never ends…and sometimes selling your own team is the biggest challenge. In short, you are the maestro and this is your orchestra…you need to have a vision of where you are going and be able to coax, influence and occasionally demand your way to success.Above all, you must be the Brand Champion. You are the face of your company and product to the world and your energy around that needs to be top notch. Sales resources, be they internal or external, must see you as the fount of enthusiasm and feed off of your leadership. Another way to put it is that they must be sold on you. The product will be what it is, but it’s your perspective on it that sparks the flames of success.
Any one of these elements is fertile terrain for an in depth discussion…In the interest of time I am going to outline a few of the key aspects that will require your attention.Sales (Literature, Defined Territories, Production Data and Quota system)This is first chair in your symphony, your selling effectiveness begins by knowing the framework and personalities that work within it.Marketing Resources (Value Proposition, Campaigns, Coop Budget, White Papers, Tradeshows, Website, Leads)This is the rhythm and melody of your orchestra and vital to your success.Product Management (SME, Thought Leadership, Innovation, Positioning)Knowledge of your organizations view toward the market and strategic differentiators in your product will help you communicate to dealers how to position and sell it.Technology (CRM, Intranet, Hardware)You must have a centralized repository for your channel to access tools, information and support. Likewise, you need to utilize a CRM to coordinate your efforts.Administration (Contracts/Dealer Agreements, Business Plan, Educational & Training Material, Fulfillment)Clearly defining how to cross the T’s and dot the I’s will create a solid foundation and is truly square one…Professional Services (Delivery, Installation, Training, Help Desk, Development/Engineering)This is where your focus on quality control will pay dividends…you need to include this team in your message delivery because while sales may be the first chair and marketing your virtuoso, services is the depth and quality of your offering.
This is where the Champion Channel person must truly shine: finding, recruiting, motivating, training and retaining channel resellers or VARs. Our partners are truly the focal point for all of our activity and it is crucial that you maintain your focus on not only their value to your company, but also your value to their organization. Think of all the effort that it takes to find them and it is immediately obvious that you have to create a win/win mentality. In sales, the axiom of ‘Our best prospect is one that is already sold’ should be your guiding principle. Stated plainly, your dealers are your customer.One of the common mistakes that I see is the philosophy of ‘If you want to sell more gas, you need more gas stations.’ In a certain light, this is true…but from a more holistic angle fewer, more robust relationships ultimately bears better and arguably, more fruit. It also makes your task of unifying the message and maximizing your brand impact more effective.It is as important for a partner to find and promote their value proposition as it is for you, the vendor. Consider how you may be able to optimize your dealers by helping them understand their own value add. Perhaps it’s price, speed, or accessibility but in any event the bottom line is that the market can be murky for end consumers and you can add tremendous value by orientating your approach toward dealers with an eye on maximizing their value proposition via your support.Dealers in your channel should also have the certifications required to promote both themselves and your product. As the vendor, you need to make the certifications comprehensive and provide marketing support for those who have completed it such as certified logos for websites and business cards and a partner finder on the corporate site. You also need to do your part to promote the services that should be offered with the product or set of products.
Most channels benefit from different levels of service from partners and therefore require different levels of certification and service from you, the vendor.Premium Partners represent your company’s entire product and services portfolio, receive the most favorable pricing, automatic product registration within assigned geographical territories and preferred status in a lead-share program. Intermediate Partners are regionally-focused and specialize in end to end offering of a limited product set. A Basic Partner may offer product on demand only or referral for service.All partners should participate in Market Development Funding and Volume Incentive Rebates, and have direct support and purchasing relationships with your company.Partners truly have to differentiate themselves in the current market and economy which becomes even more difficult if your competing partners are getting the same air time from your company. This also provides a framework for you to move dealers upstream and provide a path to increased profitability from your product set.
As I stated at the outset, this is the often overlooked element and perhaps, in my opinion, the single biggest factor in exponentially changing the game for your channel. It is quite common for different segments of a business to operate in a silo mentality… where sales takes care of the front end, Services perform implementation in the middle and support is handled by admin on the back. While it is an operational necessity to focus, as an effective channel manager your requirement is to draw together all of the elements to move the needle. Patrons, therefore, are a big part of how you can force multiply your dealers. You need to have an active presence with the people using and evaluating your product. This can be accomplished in a variety of ways both obvious and subtle. To name but a few:Do you help your dealers sponsor active user communities in their territory?Have you considered foundations and trusts that directly or indirectly participate in your vertical segment?What would the outcome be if you actively courted industry analysts?How do you help upsell existing customers?When is your next scheduled thought leadership event/article/forum?This can be a truly enjoyable endeavor. As you help to burnish the image of your company and product you are also expanding your dealers influence and profile in their community. It can also be a challenge to justify the expense of targeting this area so you should make certain to document long term metrics of specific activities. Another consideration is to actively solicit your channel for ideas and support participation.
Channel Management Basics
Channel Management<br />The Basics of Value & Clarity<br />Presented by Fred Newcome<br />