2nd Quadrant Channels

Innovation

Diversification

Market Development

Penetration

2ndQuadrant

Innovation

Diversification

Market Development

Penetration

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Channels“Para multiplicar,…,

hay que saber dividir.” (To multiply…one has to know how to divide) -

Anonymous

Innovation

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Topics

• Definition• Importance of Channels• Examples of Channels• How to select Channels• Channels: Success Factors• Developing Channels• Business Development• ActivityGestalt of Sales

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2ndQuadrant Objectives

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• At the end of this session the student should be able to:• Define the term Channels• State why Channels are important• Develop a company Channel strategy

• Identify three potential types of Channels• Develop and apply an evaluation criteria• Develop an Action Plan to engage

a Channel

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Definition: Channels

Any means that connects your Company’s Product / Service with Customers

• Who do Customers buy from?• How do they buy?• Which is best for each type of Customer?

For every problem of the human endeavor, there is always a solution that is neat, simple and…wrong (H. L. Mencken)

In the end…customers Choose their preferred channels

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Definition: Channels (Cont’d)

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• In the context of:– A complex sale

• Several decision makers• Long sales cycle• Complex functionality• Large investment per contract / sale• Product and professional services

– Business to Business

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Terminology

• Partners

• Strategic Alliances

• Third Party Resellers

• Distributor

• Wholesaler

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Importance of Channels

• Once considered only for “simple sales”: – Retail / Consumer – Commodities

• Product maturity from “direct” => “channels”– 70% of Global

organizations– GNP transacted from

50% => 65% by 2010*

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Importance of Channels (Cont’d)

• Increased Reach: • Geographical• Verticals• Customers

• Establish Market Presence

• Co-marketing• Web site cross referencing

• Enhance / Build Credibility

• Sponsorship• Expertise in sector

• Complement the Solution / Offering

• Prime / Subcontractor• Teaming Agreements• Full Turn Key projects:

H/W, etc.

• Lower Cost of Customer Acquisition / Relationship

• Promotions• Research• Sales calls

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Importance of Channels (Cont’d)

• Reduce time to market

• Complementary Resources, vgr:– Local => Lower Cost– Special skills– Infrastructure

• Local presence: Office

• Legal presence:– Contractual obligation– Fiscal: taxes (retention –

withholdings)

• Post Implementation Support

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Examples of Channels

• Sales Reps. / Agents• Complementary

Solution Partners• System Integrators• Consultants• Hardware Vendors• VARs• Existing Customers• Competitors?

• Web based tools– Marketing collateral– Demos / Presentations– Video-testimonials– Training

• Direct Sales Force– Internal and External

• Account Management• Marketing

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How to select Channels

• Which Channels align best with:– Products?– Customers’ needs?– Target market?

• Geography• Vertical

– Sales Strategy / Method?– Your company’s vision

and commitment to customers?

– Revenue objectives

• Which Channels are :– Receptive?– Available?– Strategic?– Long term vs. Short

term?

• Which Channels:– Are more

profitable?

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2ndQuadrant Channels: Success Factors

• Management

• Structured model

• Effective communications

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Channels: Success Factors (Cont’d)

• Decision making:– Speed and clarity– Milestones – Contingency plans

• Flexibility:– Negotiating guidelines– Receptiveness to

alternatives

• Team coordination:– Communication– Pre-scheduled events– Methodology: PM– Common goals

• Resources:– Skills– IT Resources– Support team

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2ndQuadrant Developing Channels

• Training / orientation– Represent your products fairly– Support adequately

• Go To Market initiatives / campaigns– Website cross referencing / Trade Shows

• Pricing strategy– Complementary– Consistent

• Sales process– Parallels customers’ purchasing process?

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2ndQuadrant Business Development

• Alternatively, Channels can be managed by a:– Business Development Manager, or– VP of Strategic Alliances, etc.

• Responsibilities:– Marketing– Revenue– Product Development

• Job description: see sample

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2ndQuadrant We’re almost ready!

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Activity

• Profile your company and products

• Select a product• Identify a (new) target

market• Develop a channel

selection criteria < 5 characteristics

• Identify three (3) potential channels

• Rank the candidates according to the criteria

• Recommendation: Students will make a 5 minute presentation with 5 minutes for Q&A

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Channel Strategy

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Type / Name

Benefit to channel

Benefit to me

Action Plan

Resources

Mortgage banker

Sure sale in one week

50% of his/her business

Using a template similar to this, develop your company’s Channel Strategy

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References

How to Develop Your Sales Process - Marketing M.O.

Gestalt of Sales