Sales Channel Strategy for Business Success Pt 2

Create Multi-channel Strategies

The channel spectrum that has evolved in most markets is characterized by a wide spectrum of choices, ranging from highly efficient, logistics oriented channels to highly focused, service oriented businesses. Few manufacturers can assure optimum market presence by selling via only a single channel type. Market share leaders will include a variety of channels in their mix and provide a differentiated offering through the channel to reflect the unique characteristics, needs, and market value of each channel type utilized.

Make Smart Choices in Channel Selection

One of the key changes occurring in most channel classes is consolidation. It is rare to find the true independent operator today. Given this consolidation, you run a higher risk than ever before associated with a poor choice of channel partner.

There are fewer alternatives to offer you market presence and share if your existing relationship does not work out. Winning channel managers address this risk through a more considered approach to channel selection. More time is spent up front defining the ideal characteristics of a channel partner. These characteristics usually include financial and management capabilities to support growth, sales and marketing capability to support your programs and goals, and operations considerations to help drive efficiency.

Tackle Channel Conflict Management Strategically

In an environment where multiple channel strategies are normal, conflict management should be considered an integral part of the strategy planning process. A fair and impartial approach to channel management helps control conflict through a variety of ground rules, around access to brand, product authorization, and economics that reflect the role of the channel. Clear policies and consistent enforcement of authorization, channel standing and termination provide the most level playing field for your channel partners, allowing for effective conflict management.

Use Channel Pricing to Manage Market Complexity

You may still base your channel pricing on volume. This approach fails frequently in the environment where you utilize multiple channels with significantly differing business models. The volume based approach invariably favours the logistics oriented channel over the service based models. This leads to channel conflict and puts strain on relationships with the service based channel model.

A more pragmatic approach to channel pricing is a value based compensation model. This approach places a value on each of the functions the channel performs for you, allowing your overall payments to the channel to more directly represent their role in your go to market strategy.

Create Programs for Strategic Advantage

The most successful businesses take the time to assure their programs offered through the channel partners are linked to market dynamics. These programs are carefully designed within the context of the market map. Then you can expect a much higher return on the resource investment.

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