Our Tradewinds Council © https://www.jimthomasintl.com/the-tradewinds-councilcopy.html members continue to focus on tweaking their channel partner model. The December 2018 blog focused on programs, this blog will focus on creating an environment where channel partner and manufacturers regularly set the pace of their relationship in a collaborative meeting format.
Most manufacturers find out that having fewer, but more devoted distributors is most effective. Mindshare and time share are the critical elements for partner success. https://www.jimthomasintl.com/blog/the-key-attribute-for-distributor-recruitment. In most cases that means moving the relationship from a transactional relationship that is operational in nature and focused on short term results to one that is more engaged, more transparent and more of a long term partnership.
The purpose of a Distributor Review system should be to:
1. Mutually share business strategies amongst partners,
2. Benchmark current activities,
3. Develop future activities,
4. Build a deeper relationship at a senior level.
It is best to make the review part of your existing Channel Partner Business Agreements. Use the forum of the annual addendum review to meet with top distributor management. Create an addendum to your business agreement that can be updated annually and is part of the agreement for sales planning and activities It should be a collaborative event. Sample meeting formats could consist of:
This is a working session not a PowerPoint parade. The Distributor review should be led by the Channel Manager or someone else from HQ-not field personnel (although they should be present as the silent partner). It should be conducted with the Distributor Principals, not the distributor field sales team.
The role of benchmarking and scoring should fall to the Channel Manager or HQ representative. It could impair their relationships with the distributor sales reps-don’t let it. Principal field sales personnel need to be viewed as positively as possible inside the Distributor-they cannot be viewed as contentious.
Optimally there are a minimum two reviews per year, one live during the planning cycle and another live remotely during the year as a check in. This is not a pipeline review of current projects. Pipeline reviews are done regularly at the field level-usually weekly.
The benefits of the program of a Channel Review are clear:
Do you want to have a free fifteen-minute call on improving your channel partner review and meeting process? You’ll need channel partner management buy in so there will be tough conversations so best to do some scenario planning. Sign up on my web site or contact me directly by phone.
Our November Tradewinds Council © https://www.jimthomasintl.com/the-tradewinds-councilcopy.html meeting discussion centered on best practices of Channel Partner programs. It was interesting that two of our members, iconic 100 year old Minnesota companies, cited updated major Channel Partner programs in the past few years. The changes were centered on achieving higher revenues and an improved customer experience.
Most channel changes made are reactive and are in response to underperformance. Successful channel transitions are usually the result of a proactive channel strategy that has been effectively communicated and implemented. Most manufacturers find out that having fewer, but more devoted distributors is most effective. Mindshare and time share are the critical elements for partner success. https://www.jimthomasintl.com/blog/the-key-attribute-for-distributor-recruitment.
Fear of the unknown usually prevents a principal from making a change in channel partners. Therefore, a change management plan must be executed to avoid potential disruption to the customer base. The risks may also include:
Channel transitions take time and careful planning to minimize disruption. Objective measurements, clear communications and shared execution can minimize disruption to affected parties. It is also important to remember to address the fallout to other affected parties e.g. other channel partners as distributors tend to share principals.
There are three critical parts to the transition plan that must be developed:
These are tough conversations to have with partners so keep them professional, not personal. It is best for your local reps to have those conversations as they are principal internal driver and have the most to gain from the changes. My most contentious and challenging channel transitions have occurred in Latin America.
At a minimum, as part of your due diligence you’ll want to:
There are many other nits to work out, e.g. web site contact data, blanket PO’s, but these can be part of your overall change management process.
Do you want to have a free fifteen-minute call on improving channel partner programs? We have built checklist and contingency plans from prior dealings so you don’t have to build one from a standpoint of inexperience. Sign up on my web site or contact me directly by phone.