Many manufacturers go to market through an indirect sales channel, such as a network of independent distributors, dealers or other partners. If you fit into this category, you know it’s important to continually evolve and evaluate relationships with your partners.
3 Dimensions of Success
For any given indirect sales channel, there are three primary dimensions to maximizing your overall success:
- Channel Enablement: What am I doing for the channel?
- Channel Performance: What is the channel doing for me?
- Customer Engagement & Insights: How is the channel extending my reach to the end customer?
Key #1: Channel Enablement
When looking at your distributor/dealer network, it is easy to jump right to looking at the value that your partners bring you. Although this is vital, start by examining value from your partners’ perspective.
Dealers and/or distributors make an ongoing choice to partner with manufacturers. This includes not only which brands they sell, but also how they promote your products in day-to-day interactions. Just like customers gravitate toward brands that provide a low-friction and value-rich experience, so do dealers. Any given dealer is more likely to advocate for a manufacturer who makes it easy to sell vs. the manufacturer who makes it difficult.
Look at your partner programs and systems to ensure processes are effective and efficient, while maximizing value for your partners. Consider a few key questions, such as:
- Do partners have access to necessary knowledge and training to effectively engage their customers on my behalf?
- How do I enable my partners to engage their local market to drive demand and influence prospective customers?
- What tools do I provide for my partners to efficiently execute key business processes involved in selling and/or servicing my products?
- How do the benefits provided to my partners impact the overall promotion and selling of my products?
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It’s critical to gain insight and feedback from your partners themselves. It is easy to assume how partners feel about your programs based on anecdotal feedback and/or internal assumptions. Digital feedback mechanisms and/or representative dealer “councils” are great ways to gain this type of direct input.
Key #2: Channel Performance
Next, look at the channel from your organization’s perspective. To effectively drive value, it’s important to: a) set clear, mutual expectations and b) continuously evaluate individual and collective partner performance.
Identify and quantify the results you wish to see from each partner, and make sure those expectations have been communicated and, more importantly, agreed upon. Setting sales goals/commitments collaboratively with each of your partners is foundational. Successful programs also set expectations around process execution (e.g., product registration) and upstream volumes (e.g., leads) to ensure that performance can be evaluated across the customer lifecycle. With this in mind, be mindful not to overcomplicate the performance expectations in case partners are unclear or confused about what’s expected of them.
To ensure you and your partners can continuously monitor performance, provide easy access to reporting. Using a “partner scorecard,” you can share and reinforce clear expectations for individual partners, as well as gain your own insights into individual and collective partner performance. With this type of transparency, you both can engage, collaborate, and drive action to support meeting or exceeding partner goals.
Key #3: Customer Engagement & Insights
Historically, manufacturers viewed dealers or distributors as their direct customers. Any engagement or insight into the actual end consumer was often left to the dealer/distributor to manage. This meant, however, that manufacturers typically were lacking information about how to improve customer experiences. Today it’s critical to examine partner relationships, processes, and systems to gain increasing and continual insights into end buyers.
Solving this can be viewed as grabbing the “third rail” of partner management. Channel partners often view end consumers/buyers as their customers and want exclusive rights to own and manage those relationships. Sharing direct access can stir fear about being cut out of the sales/service relationship, sometimes resulting in resistance and/or non-compliance with programs that provide manufacturers with end-customer insights.
This challenge brings us back to channel enablement. If a dealer believes their partnership with a manufacturer is highly beneficial, then resistance is greatly reduced. It’s important that partners not only perceive an overall positive value, but that the processes and programs requiring access to their customers also have direct benefit to them. For example, by asking dealers to complete a warranty/product registration for each sale, the dealer should realize some benefits from providing this data. This may be a direct advantage, such as a financial incentive, but more importantly, it could be something that benefits their ongoing relationship with the registered customer. In the warranty/product registration example, enabling automated service reminders based on product registration data would be a great ongoing benefit for the customer AND the dealer alike.
Remember, it’s important to balance the weight of these three dimensions: channel enablement, channel performance, and customer insights. Continually evaluate these areas to ensure that each one is understood and in balance with the other two. And by driving value in each one, you can maximize the overall value of your channel programs.