Today my marketing executive peer group discussed channel management. My former roundtable member Dan DeVries (currently the Founder/President of Wild Horse Strategies) came to guest visit and facilitated a great discussion shedding light on all the complexities involved in creating a channel management strategy that can really impact business – in a positive way. Here are some of the reflections from Dan in our debrief:

What were the most interesting themes you walked away with?
Managing your channels takes time and resources. This reminds me of a discussion that took place a year ago around social media. You can’t do this as a part time job.

Good discussion around marketing development funds. (MDF) How effective are they? How do you make sure they get used in the right way. (To drive new sales vs. adding to margins.) Are any of these funds getting to the sales or marketing teams that drive product sales?

You need to keep up with the competition. If they go direct in a territory – you may be forced to do the same.

What are the messages you heard around channel conflict?
You want to make sure that your channels feel like they are getting a fair deal. Even though you make more margin in an internet sale – a percentage of your customers want to engage with an actual person or partner company. (Rod’s example of on-line sales vs. talking to an agent.)

Each channel adds value in a certain way to customers they service.

You may have to get tough with your channels to enforce pricing agreements. (Doug’s example with an on-line channel.)

What do you think are the biggest challenges in channel management?
Getting mindshare from your channel. This is critical if you have indirect channels that carry multiple product lines.

Making sure that sales and marketing teams are in alignment.

Including a channel strategy in your initial product development plan.

Again – managing the channel takes time and personnel.

What surprised you?

Interesting discussion on how service companies might create channels. This could consist of a referral program for their partners or their clients.

Here are some of my favorite questions from this session:

How does the channel affect how you price products and what consumers are willing to pay? Dan provided a great example: What are you willing to pay for a beer if you bought it from a fancy hotel vs. if you bought it from the corner store? What is your answer?

How do you ensure price integrity? One of our member execs suggested that his company has the same price point in all channels. In fact, even though their web site is the most profitable channel, they are very careful not to aggravate partners who add a lot of value by building the brand.

Instead of asking what is best for the company (profit, growth etc), ask what is best for your customer.
Here are my favorite quotes:
“We have a blended approach to channel management – a start anywhere, end anywhere strategy.”
“We never want to have to advertise again. Advertising is the price you pay for a boring product!”
“If we forget to start with the customer, you have a distribution strategy that is limited and ‘you create a mandated divorce.’”
“When you move through an emerging trend, don’t forget how your customer got to you in the first place!”
“Know who your customer is before you write your channel strategy.”