How Does Your Customer Want toBuy Your Product from your Channel? ü Same day ü Delivered and installed ü Downloaded ü Bundled with other products ü As a service ü … 30
Types of ChannelsDirect Indirect Licensing – OEM – VAR – Reseller – Distributor 31
Distribution Complexity Global Systems Evangelists Systems Integrators WANs MainframesMarketing Complexity lu me Direct Sales r Vo Minis g he Hi LANs VARs PC Servers d ed Desktop PCs e Ad Retail alu rV Printers ig he Keyboards H Web, Telesales Service Technicians Toner Solution Complexity 32
How Do the Economics Work in Diﬀerent Sales Channel?
How Are Channels Compensated? – Commission – Percentage of sales price – Discounted pre-purchase 34
Channel Economics: “Direct” Sales List Your Revenue Price End Consumer DiscountsCost of Goods Profit + SG&A + R&D(Supply Chain)Selling: Cost of Sales, which includes salaries, advertising expenses, rent, and allexpenses and taxes directly related to producing and selling productGeneral: General operating expenses and taxes that are directly related to thegeneral operation of the company, but dont relate to the other two categoriesAdministration: Executive salaries and general support and all associated taxesrelated to the overall administration of the company 35
Channel Economics: Resellers List Your Revenue Price End Consumer DiscountsCost of Goods Profit + SG&A + R&D Reseller(Supply Chain) 36
Channel Economics: Distributors/Resellers List Your Revenue Price End Consumer EU Discounts DistributorCost of Goods Profit + SG&A + Reseller(Supply Chain) R&D 37
The Channel as a Customer– Some products are embedded in others (OEM)– Some products are resold by others (VARs)– Some products are distributed by others– Who’s the customer? 38
Channel Economics: OEM or IP Licensing List Your Revenue Price End Consumer EU Discounts Distributor Distributor Cost of Goods Master (Supply Profit + SG&A + R&D Reseller Chain) Cost of Goods Profit + SG&A + Reseller (Supply R&D Chain)Your Product Becomes Your Customer’s Cost of Goods 39
How Are Channels MoKvated or Incented?– Money! – what makes them the most?– Training– Marketing to the channel– SPIF (Sales Performance Incentive Fund) • pay the channel’s sales rep a bonus 40
Customer Archetypes Drive Get/Keep/GrowWhat’s their role?How this person is evaluated / promoted /compensated?Who are they?Buyer’s namePosition / title / age / sexHow do they buy?Discretionary budget (name of budget andamount)What matters to them?What motivates them? Lab Manager: BrianWho inﬂuences them?What do they read/who do they listen to?