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Channel Management Starts with Relationships

Channel management is all about relationship building. The better you communicate with your partners and their sales staff, the better your product will sell.

Good channel management ensures your products and services are available to customers in the place that’s most convenient for them, whether that’s through a retailer, wholesaler, a printed catalogue, a website, or a combination.

The first key question you have to ask is whether to sell through third-party partners, or to go direct. The web makes the direct route more feasible for many companies.

Going direct has obvious advantages, because you have first-hand knowledge of customers, you can understand the market more easily, and there are fewer steps in the supply chain. The challenge is that it’s not always viable because of the number of customers. In the world of B2B companies often chose to deal with a small number of key customers directly, but they also have to find a way to access the other 80 per cent of the customer base, which means some sort of distribution channel.

If you embrace the concept of channel partners, the next challenge is find the right ones to do business with. The most effective way of doing this is to define your end customer and then work backwards up the value chain. Identify where the purchase occurs within a given channel and then look for financial strength, expertise, willingness to partner and their reach into the target market.  Their management capability and the strength of their brand and reputation are also key factors.

It’s all important to find channel partners that mirror your business ethos and can deliver on their promises and this starts and ends with your relationship.

Once you’ve identified your channel partners you need a programme of activity to keep them up to date with developments, stimulate their interest, address their needs and influence them. Incentives can work well, but are only part of the story. The other important element is knowledge and keeping your product front of mind through a rolling plan of communications and intelligent use of the phone, email and your website. Of course, in-bound activity is equally important and technical support lines where calls are answered in three rings and any in-bound email receives a response within the hour should also be considered.

Channel management is an ongoing challenge that can’t be left to its own devices. Finding the right partners in the first instance is no easy task. Then they must be nurtured and rewarded: you might have a better product than the competition, but if you’re not communicating its features and benefits your sales will suffer.

Dos and Don’ts

Do your research when choosing partners to make sure you get the best partners for your brand

Do offer incentives to sell your products

Do ensure sales staff know as much about your products as they can, so they are comfortable telling potential customers about them

Don’t treat all your B2B customers the same. The 80:20 rule applies. The top 20 per cent warrant direct account management. For the rest, use distributors or a partnership programme or both to manage the relationship.

Don’t be complacent. Good channel management is a journey, not a destination. You need to be proactive, but also ready to react to competitor activity.

Don’t neglect your sales force. Allow for inbound activity, provide support and product information that staff can call on at any time.