Much of today’s commerce is built on a go-to-market strategy leveraging Channel Partners – relationships that provide revenue for all participants and extend the reach of all brands. Whether you look at Financial Services, where a product (mutual fund, index fund or ETF) is offered through Financial Advisors, or the roofing industry where roofing products are sold through contractors, the model has existed and flourished alongside direct sales. Different industries refer to their Channel Partners with different labels: channel, reseller, distributor, alliance and partner. A company basically chooses to “outsource” a company’s sales activities across some portion of a customer’s lifecycle.
A paper titled “The Extended Sales Enterprise: Channeling Better Results” by Peter Ostrow, Aberdeen Group (April 2011) showed how Partners help achieve Best-in-Class performance:
- “107% of overall corporate attainment of sales quota compared to 74% for Industry Average companies…”
- “5.4% average year-over-year increase in channel sales lead conversion rate (lead-to-close); compared to a 2.1% increase for the Industry Average…”
- “4.6% average year-over-year increase in overall deal size, versus 2.2% for Industry Average…”
It’s a solution that provides unique challenges including de-centralized marketing needs, integration needs and technology needs. While many companies focus on the indirect sales aspect required to generate enthusiasm and top-of-mind consideration by the intermediary, I also like to focus on core brand emphasis across the chain and to the ultimate consumer.
Maintaining the Master Brand
Companies like LG or Intel have mastered the co-branded marketing methodology, strategically positioning their brands in the consumer brain to develop continuity of relationships for years to come. Others, such as Ingersoll Rand, have chosen a different approach, developing brand through stock market activity, acquisition and product quality rather than consumer outreach. Yet their suite of solutions is sold through Channel Partners and Dealers. With Partner populations often numbering in the thousands, it can be difficult to control data, skills deployment, operations across geographies, product lines and volume. However, a strong set of rules, training, sound pricing, motivational tactics and easy-to-use technology with clear communications makes the challenges manageable and growth oriented.
The brand relationship between the Dealer/distributor and the corporate brand and the product brand poses unique marketing challenges and requires multi-year business and marketing strategy to be in lock-step. The combined strategy requires a complicated set of rules for marketing that ensure recognition and growth while putting a strong emphasis on customer experience and profitability.
Distribution of marketing materials has changed immensely over the past couple of years, and most corporations have robust sales and marketing portals dedicated to the success of their Partners and Dealers. The materials range from co-branded advertising campaigns to product literature to full-blown collaborative marketing and sales strategies. Moreover, the advent of social media marketing has allowed corporations and their Partners to create a well-developed network of online content dedicated to generating SEO for their sites. Considerations include rules that govern overlapping sales territories so as to not waste resources having Dealers compete against each other… working to achieve a somewhat harmonious balance.
A robust media array allows for demonstration of product and industry knowledge, consideration of end-user needs and advanced customer service. The limitations of social media, however, require more focus on branding so that distributed messages retain core brand message and values. Online media channels are somewhat fragmented and possess both abbreviated consumer attention and viral opportunity. I recommend that brand strategy, content strategy and digital strategy consider potential interactive scenarios, responses and crisis communications. Within highly-regulated industries, coordinated teams must be educated as to what they can and cannot say online, what disclaimers must accompany all advertising communications and how and when to escalate an emergency situation.
It’s About the Numbers; It’s About the Brand
The most important aspect of using Channels is focused on top-line growth strategies: increasing market share, corporate revenue, margins between gross revenue and net profits, decreasing the cost of sales, improving up-sell or cross-sell revenue. As a marketer, the challenges of Partner marketing include understanding partner goals, and adhering to brand messages and sales targets in order to achieve channel goals and maintain the core brand values.