We’ve just completed a project where channel strategy proved to be the vital piece of the jigsaw. It set me thinking, as researchers we spend a lot of time analysing the way people buy, and working out how our clients can tailor their approach to maximise sales. Quite rightly there’s a strong focus on the customer, what they want and how they go about getting it, and what can influence them along the way. But it’s vital to remember that your ability to influence the outcome of a shopping expedition is effected by channel partners as much as it is by brand.
But in many ways this is a harder thing to manage than customer relationships, particularly if you are entering a new territory or market. Businesses are faced with a shifting landscape, one in which it’s critical to understand where to focus investments and resources.
We work with major brands in both the B2B and B2C spheres to ensure that they are optimising their channel strategy to meet changing needs. The scale and breadth of requirements vary greatly according to their immediate organisational aims, but generally these tend to be the key questions:
1. What are the key channels for this market/geography? What constitutes the right channel is constantly evolving and what’s good today might not be right tomorrow. Likewise your partner strategy in an emerging region will differ significantly from a new product launch at home. Obviously channels change and channel effectiveness has always changed over time, but change is happening faster than ever with the economic downturn and increased focus on all things digital.
2. Do we have the right partners in these channels? It’s not just about having the right market reach, your channel partners are ambassadors for your brand and their service has to match yours.
3. What are their attitudes to our brand and product line? No matter how good a fit a channel may appear they have to be motivated to sell your product or it simply won’t happen. Similarly if the channel is cosy with, and well served by, a rival brand you’ll struggle to get the attention your brand deserves.
4. Do we have the right SKUs to maximise sales in these channels? Just having loads of SKUs is not the right answer, it will prove costly and your partners just won’t give them the attention they deserve.
5. Who’s wearing the trousers? Knowing where the relative power sits in any relationship is vital, so understanding who has most to gain and who has most to lose helps frame your channel strategy, T&Cs and negotiation tactics.
6. How do we prevent, or at least mitigate against, channel conflict? Some degree of stress between competing channels is inevitable, but the trick is to know how to neutralise, or better still, make it work in your favour.
7. Are we providing channel partners with the right support and motivation? What’s the most effective way to engage and support them to stimulate growth? What infrastructure and tools do we need to provide to effectively support the channel?
So how do you answer these questions?
Here it’s really a case of gathering a variety of perspectives so that your channel strategy is based on a considered, 3 dimensional view. It involves close interaction with your internal sales team, trade marketers and most importantly your customers. Spend time walking in your channel partners’ and customers’ shoes as well as wading through all the sales stats you can get your hands on.
Of course studies like this need to be done systematically, without pre-conceptions or preferences regarding the outcome. And this, my friends, is where market researchers like us come in….
So, if you’re embarking on some customer research, ask yourself, is it just my customers that I need to research? Or should I be looking at my channel partners too?