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Channel Matters Blog > September 2013 > 3 Signs You Need to Revisit Your Channel Strategy

3 Signs You Need to Revisit Your Channel Strategy

by Rich Blakeman
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As we enter the fourth quarter, many multi-channel organizations are starting to realize they may not make their 2013 targets. Inevitably, this leads them to question their channel strategy:

- Do we have enough partners?
- Do we have the right partners?
- Why do we even have a partner channel?

All good questions to ask, but missing yearly targets isn't the only sign an organization needs to revisit their channel strategy. Here are three more:

#1 Poor market performance.

If you have multiple primary markets, and only one or two are performing, it's time to reexamine your channel strategy. Many organizations think that choosing a partner channel route means they have to open up their entire market to the channel. This just isn't so.

In some cases, such as a new market that requires specialized expertise, a carefully selected partner channel will speed your entry into the market and outperform your direct sales force in the long term. On the other hand, your direct sales force may be more effective with established markets where you have developed a trusted reputation. Adding a partner channel for the sake of increased coverage can easily dilute the brand reputation you worked so hard to build.

Regardless of which channel strategy you choose for individual markets, the key is to make it clear to both the direct sales force and the partner channel which markets and which customers are open to them.

#2 Unbalanced partner contribution.

The 80/20 rule is a hard one to break, especially when it comes to partner performance. However, if most of your revenues are coming from a handful of partners, you're asking for trouble.

Unbalanced partner contribution can be a sign that you haven't adequately defined the type of partner you need to recruit. Studying the attributes of those who are successful can help you refine your partner profile. Be sure to pay close attention to individual markets here too. Just as not all markets are well suited to a partner channel, individual partners may not be well suited to all markets or products.

Channel partners also require onboarding just like a direct sales force. An unbalanced contribution could mean you aren't providing the right tools and resources to help them get up to speed. If a few have succeeded anyway, it could be they were particularly motivated or adept at self-educating. Even in an organization that fails to adequately train its own sales force, there will still be a handful of salespeople who manage to perform.

#3 Declining customer satisfaction.

In our ChannelPRO™ framework, we talk about delivering the "whole product." It's a concept most organizations are familiar with, but it's easy to overlook the role channel partners play. For example, if your market relies heavily on services such as support, installation or customization of solutions, you need to set clear delivery expectations with partners. Too many technology organizations expect their partner channel to have mini-versions of their own consulting and support departments, then recruit partners who are little more than distribution organizations. With such a mismatch, customer satisfaction frequently suffers.

Unfortunately, by the time these organizations recognize the problem, a significant amount of damage has been done. This is one reason it's so critical to include an analysis of customer satisfaction in your channel strategy discussions.

Back to the drawing board?

Regardless of whether your organization is showing any or all of these signs, channel strategy is not a "set it and forget it" exercise. Just as the makeup of the direct sales force is analyzed at the end of every year – or more often when problems become apparent – channel strategy should be evaluated as well.

In some cases, the problems may be readily apparent. If so, count yourself lucky. However, most organizations will want to go back a little further and revisit the channel strategy using methodologies like Channel Enablers Market Mapping. This will allow you to effectively define solutions to the obvious problems, and perhaps uncover some not-so-obvious ones as well.

 

Last modified on 11/18/2013 9:13:46 AM
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