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Channel Matters Blog > April 2015 > Channel Strategy: Putting the Focus Where it Needs to Be

Channel Strategy: Putting the Focus Where it Needs to Be

by Jan de Leon
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Back in the mid-80s, Jan Carlzon, the President and CEO of SAS Group, wrote a book that was translated into English as Moments of Truth. While I don't know that it ever achieved the same level of sales, for me the concepts were on par with those found in such classics as Good to Great (Jim Palmer) and In Search of Excellence (Tom Peters). Looking back, I think they might even have been more important for today's sales organizations because Moments of Truth minced no words when it came to where the focus needed to be — on the customer.

To be fair, these other management ideas, as well as many others that came before or since, had an element of customer centricity. Even lean manufacturing, which on the surface seems to be all about process, puts customers at the heart of all process improvement initiatives. When a lean guru talks about value stream mapping, he or she isn't talking about mapping processes against their internal value. At every step, they ask the question - Does this add value for the customer? If not, they look for ways to minimize or remove that step.

All of this focus on the customer in other business management strategies makes me wonder why some business leaders see channel strategy as different. I often hear channel objectives stated something like this:

— We want to ensure we're fairly compensating our salespeople.

— We want to improve our coverage model and increase revenues.

— We want to minimize our cost of sales.

— We want to increase our sales through a specific channel.

— We need to minimize cross-channel conflict and cannibalization. 

These are all worthy goals, but if they are the only benchmarks by which you measure your channel strategy, you're missing the point. Like the lean gurus, we need to be viewing our channel strategies through a customer lens. If we can't say how an aspect of our strategy improves customer value, we need to ask ourselves whether that element should be in our plan at all. 

All too often, aspects of a channel strategy that don't improve customer value are actually detrimental to the customer experience. For example, as we contort strategy to minimize cross-channel conflict and cannibalization, we end up with schemes that turn our buying processes into a nightmare for the customer.  

Find your moments of truth
Customers have more options for buying than ever before. Unless we see our channel strategy as a series of "moments of truth," we may see our customers selecting someone who does.

Mid-year is a great time to do a buying-process audit because you're not swamped with other priorities such as redefining territories and setting quotas. Plus, there's still time to take action on any issues you identify.

Here's the framework for the buying-process audit that I suggest following. 

Identify all the ways customers can access your products and services. By access, I'm covering more than just the actual buying stage of the sales cycle. You need to make sure you're easy to do business with even when your customers are just beginning to frame their concept of an issue. Perhaps, especially then.

Define the process your customers follow for each of these "channels". It's a good idea to avoid guessing. Spend some time talking to customers about how they buy products like yours. Here are just a few of the questions you might ask:

— Do you prefer to buy from a local reseller or directly from the vendor? Why? (Never, ever forget to ask why when studying customer behaviors.)

— Tell me how you found the reseller from whom you bought.

— What made you select that reseller versus another?

— Before you engaged a salesperson, what kind of research did you do? (Try to get them to be as specific as possible.)

— Did you talk to other customers during your investigation? At what stage of your buying cycle?

— What other products and services did you need to buy in order to complete your solution and from whom did you buy them? (This will help you identify the "whole product" your customer needs to acquire in order to implement your solution.)

It's always a good idea to have a marketing professional or even an outside consultant conduct these interviews. The less "skin in the game" the interviewer has, the more likely he or she is to record unbiased insights.

Do your own value assessment of the buying process. At each step, are you making it easy for your customers to choose you? Are there steps in the process that could be made more valuable for the customer? Are there steps that add no value that might be removed? For example, I have seen more than one sale lost by the software vendor who insists on doing a full-day demonstration to a team of buyers that just wants to talk to a reference.

Remember, you're looking at the buying process, not the selling process. If the focus is on how you sell, it's easy to miss opportunities to add value in the eyes of the customer. On the other hand, if the focus is on the buyer, you'll find steps (and possibly even entire channels) that add little to no value and can be minimized or removed. By looking at the process from the customer's point of view, everybody wins.
Last modified on 4/27/2015 8:57:24 AM
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