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10 Rules for Channel Success


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A presentation given to the Vancouver Technology Indistry Association in 1998. These rules are still valid even now. Some of the technology to enable them has changed since then but the spirit lives on

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10 Rules for Channel Success

  1. 1. 10 Rules & 1 Step to Channel Success There is no silver bullet to guarantee success. You must customize product, marketing, and support to meet the needs of a diverse set of customers. Make no mistake, the channel is a strategic approach to business, not a quick fix for something you cannot sell Paul Rickett, VARKETING! 1998
  2. 2. Channel Experts “ Paul knows what he is talking about - listen to him ” Bryan Nieder, VP Channels, Electronic Arts <ul><li>18 Years channel experience; VAR, ISV, Distribution </li></ul><ul><li>Clients include: IBM, Dell, Great Plains, Siemens Nixdorf, Digital Equipment, EDS </li></ul><ul><li>Over 100 articles in VARBusiness, Software Marketing Journal, SCO World, SI Business </li></ul><ul><li>Seminar Series: Product Launch, 3Rs of Selling Through VARs, 10 Rules of Channel Success </li></ul>
  3. 3. The Channelsphere Expansion is driven by technology change Attrition does not balance out expansion
  4. 4. Segmentation
  5. 5. VAR Qualities <ul><li>PLUS </li></ul><ul><ul><li>Brand Loyal </li></ul></ul><ul><ul><li>Creates whole product </li></ul></ul><ul><ul><li>Technically capable </li></ul></ul><ul><ul><li>Strongly influences buyer </li></ul></ul><ul><li>MINUS </li></ul><ul><ul><li>Conservative </li></ul></ul><ul><ul><li>Profit driven </li></ul></ul><ul><ul><li>Not amenable to control </li></ul></ul><ul><ul><li>Weak in marketing </li></ul></ul><ul><ul><li>… .AND does not like to be called a VAR! </li></ul></ul>
  6. 6. Channel Calculus Quantifying the business proposition pp=v((pf*(rp*eos))+(lsp+lpp)) VARS are profit rather than revenue driven
  7. 7. RULE 1: Deliver a Quality Product <ul><li>Bugs kill…. </li></ul><ul><li>Differentiate VAC product from other channels </li></ul><ul><li>Product includes </li></ul><ul><ul><li>Packaging </li></ul></ul><ul><ul><li>Support </li></ul></ul><ul><ul><li>Downstream revenue </li></ul></ul><ul><ul><li>Sales materials </li></ul></ul>
  8. 8. RULE 2: Keep Selling Direct <ul><li>Know how to sell your own product </li></ul><ul><li>Demonstrates need </li></ul><ul><li>Channel leverages your activity </li></ul><ul><li>Provides better market intelligence </li></ul>Channel should expand market not just reduce cost of sales
  9. 9. RULE 3: Channel is a Strategic Commitment <ul><li>Management must commit to channel </li></ul><ul><li>Invest in people to manage it </li></ul><ul><li>Set goals </li></ul><ul><li>Channel friction indicates positive coverage </li></ul><ul><li>Allow time for channels to ramp </li></ul>
  10. 10. RULE 4: Allow for Multiple Strategies These may run concurrently with different VAC segments
  11. 11. Relationships Change over Product Life Adapted from Geoffrey Moore, “Inside the Tornado”
  12. 12. RULE 5: Execute Well <ul><li>More Important </li></ul><ul><ul><li>Actual Profit </li></ul></ul><ul><ul><li>NFR </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Tech Support </li></ul></ul><ul><ul><li>Delivery </li></ul></ul><ul><li>Less Important </li></ul><ul><ul><li>Discounts </li></ul></ul><ul><ul><li>Collateral </li></ul></ul><ul><ul><li>SPIFFs/Rebates </li></ul></ul><ul><ul><li>Sales Support </li></ul></ul>
  13. 13. RULE 6: Minimize Pain Factor <ul><li>Terms of business </li></ul><ul><li>Fulfillment </li></ul><ul><li>Responsiveness </li></ul><ul><li>Support </li></ul>Good exception handling is a great loyalty builder
  14. 14. RULE 7: Use VARCOM <ul><li>Communicate directly to channel </li></ul><ul><li>Customize to segments </li></ul><ul><li>Cover entire spectrum </li></ul><ul><li>Co-market like crazy </li></ul><ul><li>Clearly state value proposition </li></ul>Reach the influencers in the VAC selection process
  15. 15. RULE 8: Get Commitment <ul><li>Qualify & Certify </li></ul><ul><li>Money commitments mean action </li></ul><ul><li>Train them </li></ul><ul><li>Have mindshare </li></ul><ul><li>Product buy-in favours sell-through efforts </li></ul>Use commitments to raise entry barriers
  16. 16. RULE 9: Profits come from Repeat Business <ul><li>80/20 Rule rules </li></ul><ul><li>Tier programs for recognition and reward </li></ul><ul><li>Know your cost and payback metrics </li></ul><ul><ul><ul><ul><ul><li>Mindshare is everything </li></ul></ul></ul></ul></ul>
  17. 17. RULE 10: Constantly Evaluate <ul><li>Listen </li></ul><ul><li>Adopt </li></ul><ul><li>Adapt </li></ul>A sales is not a sale until you know who the customer is
  18. 18. Rule Recap <ul><li>1. Deliver a quality product </li></ul><ul><li>2. Keep selling direct </li></ul><ul><li>3. Channel is a strategic commitment </li></ul><ul><li>4. Allow for multiple strategies </li></ul><ul><li>5. Execute programs well </li></ul><ul><li>6. Minimize pain factor </li></ul><ul><li>7. Use VARCOM </li></ul><ul><li>8. Get commitment </li></ul><ul><li>9. Profit from repeat business </li></ul><ul><li>10. Constantly re-evaluate </li></ul>
  19. 19. VAC Success is not Magic <ul><li>Bend the rules when appropriate </li></ul><ul><li>Multiple channel strategies will co-exist simultaneously </li></ul><ul><li>Pay attention to segmentation </li></ul><ul><li>Have sufficient stamina to stay the course </li></ul><ul><li>Execution is everything </li></ul>
  20. 20. STEP 1: Put VARKETING! on your Team <ul><li>Channel strategies don’t come from a book </li></ul><ul><li>Experience and diversity count </li></ul><ul><li>Take the Audit </li></ul>