Customer Centered Strategies

“Practical Tips For Creating Effective Channel

Partner Programs”

1

Customer Centered Strategies

Sales Enablement Consulting

Customer Experience

Sales Operations Channel Management

Channel Program Assessment

Objectives

• Strategy Assessment – Determine channel strategic intent and business requirements

• Program & Partner Assessment – Review alignment of requirements & benefits with strategy

– Evaluate partner alignment with strategic intent

– Score partner performance & compliance to requirements

• Program Development – Establish parameters, requirements and benefits to obtain

strategic goals

• Partner Selection – Select partners whose capabilities align with requirements

3

Desired Outcome

• Enable channel program enhancements that…

– Accelerate profitable revenue growth

– Appropriately transfer costs to the channel

– Ensure an appropriate level of service and delivery

– Create efficiencies through operational consistency

– Achieve desired strategic objectives

4

Steps to Improved Program

Effectiveness

1. Solidify Program Strategy

2. Define Program Structure

3. Update Operational Policies and Processes

4. Adjust Organizational Structure if Necessary

5. Create Program and Contract Documents

6. Communicate to the Channel

7. Launch Measurements

8. Monitor & Performance Management

9. Launch Incentives / Penalties

10. Capture Partner and Customer VOC

Education – to - Enforcement 5

Strategic Value Questions

• Why do you need

distribution?

• What do your value from

distributors?

• What functions do you want

distributors to perform?

• What are they expected to

help you achieve?

6

Carry Inventory

Customer Support

Time To Market

Demand Generation

Revenue Retention

New Customer Acquisition

Operational Cost Reduction

Marketing Extension

Reduce Inventory

Order Management Economies

Reduce Demand Volatility

Provide Longer Lead Times

Forecasting

Delivery

• Strategic Targets, Objectives, and Metrics

CES

CSAT

NPI

Strategic Objectives

7

Revenue

Growth Margin

Inventory

Turns

Strategic

Product

Sales

Cost of

Sales

NPS

Ops

Cost

Market

Share

Sales

Coverage

Partner Strategic Alignment

• Assess Strategic Capabilities,

Strength, and Focus…

– Market Segment

– Client Profile

– Resources

– Values

– Objectives

– Brand

– Competition

8

Complexity / Performance Balance

Overly complex administration for vendor programs is one

of the biggest criticisms expressed by channel partners -

Forrester Research

9

Channel Program Structure

• Develop programs that reward:

– Inventory and service level behaviors

– Revenue growth

– Overall cross-market revenue volume and penetration

– Distributor cost transfer

• This can be accomplished through…

– Discount levels

– Rebate tiers, rebate menus

– Benefit and requirement levels

– Communication of scorecards and dashboards

– Partner performance management and comparisons

10

Inventory

• Incorporate distributor inventory levels into program

requirements or benefits

– Requirement to attain rebate or price level

– Rebate based on inventory performance

– Standard lead time and expedite charges

• Create a recommended stock list identifying part

numbers that are appropriate for distribution

• Tie minimum order sizes, drop ship, restock, cancellation

to recommended stock list

11

Returns and Stock Rotation

• Stock Rotation

– Tier allowed % on distributor Tier

– Measured against previous period shipments

• Conditions:

– Require offsetting order or apply a restock fee

– Do not return recommended stock list items

• Consider scrap program

12

Pricing

• Pricing vs. Rebates

– Corporate rebate drives executive positioning influencing inventory

– Less directly impacts front line sales activity

– Discounts enable your most effective partners to take share

• Control Discounting Activity

– Manage all discounting through ship & debit

– Consider cost, time to market, complexity, price erosion

• Communicate pricing levels to the market to incent

achievement of next level

13

Menu Based Rebate Option

• Assign rebate values based on value to business

• Allow distributor to commit by selecting 1-2 additional

menu rebates

Example:

Base Rebate

Growth Rebate

1. Average Inventory Rebate

2. Market Leadership Rebate

3. Multiple Market Leadership Rebate

4. Project Registration Rebate

(Number, $, Win %)

5. Investment Rebate

6. Training/Certification Rebate

7. Share, Loyalty Rebate

8. Behavior Scorecard Rebate

14

Bonus Rebate Option

• Provide opportunity to receive a rebate in addition to

Base and Growth Rebates when certain performance

thresholds are obtained:

Examples:

• Market Penetration Rebate

– #1 or #2 revenue position in multiple markets

– #1 or #2 revenue growth position in multiple markets

• Inventory Rebate

– Average Inventory level above XX%

15

Marketing

• Best-in-Class focus on marketing and advertising

engagement

16

Marketing

• Marketing and Co-Op benefit based on revenue growth

– Allocating investment where growth is occurring

• JMP – Joint Market Planning

• Lead Management

– Implementation of a lead generation process

– Tracking process follow up, win %

– Transfer aging leads to other distributors

17

Distributor Reporting

• Most companies recognize the need for partner performance

management, but execution of this separates Best-in-Class

from the rest

18

Distribution Reporting

“Leading vendors develop programs to perform channel

partner reviews to ensure they are monitoring their channel

and testing the self-reporting elements…” KPMG

• Distributor performance comparisons

• Distribution dashboards

• Behavior scorecard

– Inventory

– Requested lead time

– Order Size

– Drop Ship

– DSO

– Project Registration Activity

– Etc.

19

Best-in-Class Documentation

• 75% of Best in Class Channel programs clearly defined

goals that are communicated to and agreed to with each

partner – Aberdeen

• T&C’s that clearly and concisely spell out program

eligibility, participation requirements, and details about

how rewards are earned, as well as what is not qualified

or allowed - CCI

• Require all participants to proactively agree to these

terms and conditions in advance of participation and

should be readily available for all participants – CCI

20

Training

• Consider distributor certification and re-certification

programs

• Track distribution rep performance following training

delivery

• Provide incentives for training courses, levels, or hours

achieved by distributors

21

Contact Us

Contactus@CCSdelivered.com

1-888-208-2234

www.CCSdelivered.com