The right tool for the job
“If the only tool you have is a hammer, you tend to see every problem as a nail.” In one sentence, American psychologist Abraham Maslow may have summed up the challenges of channel marketing.
Whether it is recruiting, communicating, training, engaging or retaining, channel marketing is all about partner relationship management. The danger for vendors is thinking that all channel relationships are the same. They aren’t. Vendors that rely heavily on channel partners to sell products face a wide range of challenges when it comes to working with individual partners efficiently. The more resellers and products, the more challenging.
To grow, you must recruit new distributors, new resellers, and new strategic partners. But first you have to identify them. Data and predictive analytics, sell-out data and market research can reveal potential target groups, market segments, new product ideas and geographical characteristics. Once you know a partner’s strengths and weaknesses, you can leverage the information to uncover potential growth areas, recognize and develop sales opportunities and actively promote partner recruitment.
Communication is key to the development and maintenance of all interpersonal relationships, private or professional. However many vendors do not communicate regularly with their partners. When they do, it may only be to address a problem. That is taking a negative approach to communication and only strains the relationship. Channel marketers should nurture their partner relationships through regular communication using a combination of news, questionnaires, real-time communication, and 1:1 marketing. Doing so helps maintain partner interest in solutions, and creates stronger business relationships.
Channel partners must be identified that are best suited to the vendor’s sales strategy. That requires having a mechanism in place that is able to identify the current skillsets of each channel partner and then creates the opportunity for them to maintain and update their skills through real-time and on-demand webinars, webcasts, online training, and certification.
How well you know what motivates your resellers and how to engage them is critical to growth. Incentive programs do work. In a study by Maritz Motivation Solutions, the vast majority of channel partners surveyed reported being more willing to sell a manufacturer’s products and services if they were offered a rewards program, and added that incentives went a long way to increasing loyalty to the vendor. An incentive program that offers a mix of enticements (market development funds, rebates, rewards, gamification) has become best practice.
Now that we have established that incentives work for resellers, they won’t for the vendor unless he is able to gain insights into channel performance (pipeline, sales, margins, ROI) and generate sales. That requires reporting. Some channel managers are left to input data into their own spreadsheets and manually import data from various systems or other spreadsheets. By the time the data is finally collected, the information may already be outdated and the manager will have invested time that could have been spent on more strategic activities. Companies geared for the 21st century use business intelligence to generate automated reporting.
Relationships do require work. However, good partner relationship management software can give the tools needed to fine-tune channel activities, and bring insights and manageability into partner channels. Enhanced with business intelligence, it can increase the transparency of partner selling behavior and unleash cross upselling potential.