Wednesday, March 11, 2009

The 3 P's of Channel Management

Anyone who has even sat in on a business school seminar has heard about the 5 Forces, 3 M's, 5 P's, SWOT, or 4 Q's more than enough times (I made the Q one up by the way) so why can't the channel have one?

This is the 3 P's of Channel Management; Product, Program, Price.

If you don't have a good product, no one will want to buy it. If no one wants to buy it you can bet no one will want to sell it! I know what you're thinking. As a channel manager or marketer you have little to no control over the product. What you do have is feedback from the solution providers and customers. You should do everything you can to get that feedback to the right people. If you don't have a good product and you've done everything you can do, maybe you should think about moving on.

Product being equal, with your competitors the next thing solution providers are going to look at is your program. Do you charge an arm and a leg for training? Are your requirements realistic and do the benefits fit? How easy is it to get business for your product? Do you assist with marketing efforts? Are your solution providers going to be competing with your direct sales staff for the same opportunities?

I bet you thought price was going to be first. Not so. Don't get me wrong if your margins are a fraction of your competing vendors you're going to lose but if your margins are reasonable your solution providers care more about being able to sell your product. It also depends on your place in the market. If you have 25% market share and customers are asking for you and nobody else but you (thanks to your product, see 2nd paragraph) then you can give less of a margin. However if you are at 8% market share and seeing the same 5 competitors in every sales call your partners are making there should be more of a benefit to those solution providers.

Where does your company stack up? Solution Providers do you have any input?

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