Profitable channel management – What questions should you ask?

Do you have a channel program that costs you sharing and profit?

Frank Lynn & Associates has noticed interesting similarities among our clients recently, especially in traditional mature markets. These customers have realized that they control the current retransmission policy based on outdated channel programs. Often, through benign negligence, these plans have failed to keep pace with both market developments and changes in the manufacturer's policy of retaliation. When did you view the channel of your applications?

When most manufacturers think about channel applications, focus immediately turns to economics; Channel pricing and other economic issues with your channel partner. Most manufacturers have done a good job in keeping their channel pricing right now with channel content. However, your channel programs go well beyond the economy – they affect almost every aspect of your channel relationships. In this article, we look at aspects of well-equipped channel applications and discusses some common questions we hear manufacturers ask for today about these programs.

Q. What is the channel program?

The most effective definition of a channel application includes all the formal written and designated elements of your channel connection. The program works well for only a contract or pricing – it defines all aspects of the relationship with the channel. As such, the program will be the "recipe book" that can control your channel communications.

Common elements of your channel include:

> The contract or legal framework for your channel relationship

> Price / discount structure and all related economic policies

> All sales / marketing or merchandising / channel suggestions or through the channel to the user

> Channel technical requirements and description of your technical support to the channel

> Rules and procedures describing the relationship with your channel (including a series of transactions and product transfers

Formal channel applications, as described above, provides the channel association structure. It gives your channel partners the right direction for the role of the channel and what you value and the metrics you use to gauge the performance of the channel, as well as channel partners in communicating with you

Q. What are the things in a successful channel?

The programs you choose for the channel of your program will be unique to the needs of the user and the role you want your channels to play to meet those needs. However, our experience shows that the most effective applications share a broad set of common factors. Show your channel program as a series of "chapters".


This section defines the general conditions that you and your channels agree to trade with:

> A contractual agreement on a defined scope and timeframe; Most effective contracts specify periods (usually 1-3 years) with the channel offer. The purpose here is obviously not to replace channel operators often. Rather defined time limits provide a basis for regular review of communications

> General definition of channel obligation; Although this warranty will be spelled out in detail later on in the channel, the contract agreement is an insight into your expectations of the channel

> A statement of your distribution policy; will you offer your exclusive distributor? Will you have multiple channels serving defined geography or marketing type? This can be written out through

> Description of the "Main Responsibility" or Authorization
of the Channel Territory

> Reference to the Products the Channel is authorized to represent for you
]> Overview of the Process To review the relationship, planning goals and forecasting, you should expect that it will be a regular performance issue. Specific metrics can be spelled out later in the channel

> Rationale for Union Termination

Pricing / Economics

The purpose of this article is not to explore the nuances of channel price structure. However, part of your channel should detail the economic relationship. All program units that affect how money is exchanged between you and the channel are listed here: Billing / Billing Processes

> Other items, including warranty payments, pricing / rules, minimum grant, product termination policy, etc.

Sales / Marketing

It is important that you adapt this section to the needs of your end user. The reason why you are licensed to channel your partner is to help acquire and maintain your customers and in this section of the program you will find out exactly what you expect from your channel to do so. It is this part of your program that defines how and to what extent your channel offers the sale and promotion of your product (as well as the consequence of your partner's channel lacking your expectations). Common aspects of the sales and market share:

> Detailed requirements for sales representative requirements and the basis for each measurement; Do you think the channel will be within / out of sales to you? What are the expected benefits of these individuals?

> Sales / marketing investment in a product range; What additional information

the investment / capacity of the channel is important to you? How does the channel work for each? And what support does you offer to assist this

> Sales Training – Do you want to certify your sales partner's channel? What training is required for qualification and what benefits does the channel partner gain in achieving this certification?

> Advertising / Collaboration – Is a required investment by your channel partner? How do you support this with a collaborative program, and what is a gift for this program?

> Merchandising / buying price – Is merchandising appropriate, and if so, do you set some variables around how the partner partner merchandises your product?

> Literature and Contractual Topics – Does the channel require partner and contractual content? To what extent do you make this available and / or charge for it?

> Exhibitions – Has a channel partner been shown and / or exhibited at trade shows? How many and which ones? Do you have to publish images?

> Leadership generation / qualification – Do you want to provide ways or expect a colleague's channel to develop this? Are there any reporting requirements to follow and meet the requirements you provide?


This is especially important if your channel participates in technical sales conditions or adds technical value added on your behalf; The spelling of the technical elements of your channel association helps ensure consistency with your end user support. Typical Technical Requirements Address:

> Indicate the technical knowledge / capabilities expected in the channel's sales network, as well as the basis of your assessment; This may be related to how you train or confirm the channel sales organization. You can also specify the background of the partner technology companies (for example, engineering
degrees / experience)

> Technical Support Factors you submit to the channel including:

> Training – Do you offer technical support training within a channel partner? For repair / service? For secondary market special effects? Etc.

> Demo units / content – Are promotional skills needed to be part of your sales process for your customers? If so, what kind of investment did the channel expect to be made with regard to material resources / capabilities? (For many products, this shows up as a significant investment in samples.

> Reference pages – Is it important that your colleague's channel has a number of referral pages? What information is there for such a site and are instructions for using these references?

> Application documents / application support – What application assistance is required by your end users? Do you have to provide a central database or are your channels expected to create their own?

> Warranty – What is your responsibility and what is the role of the channel in the
guarantee fee? What is the policy of extracting a guarantee?

Operation / Transfer

This part of your channel emphasizes the effectiveness of the Union with your channel by outlining policies and procedures that enable you and the channel partner to fulfill your order with the lowest possible cost. This area is the one that should be most frequently updated to ensure that your policies monitor the changing technologies that enable activation. It includes:

> Order Processing Definition – What is the option for a channel partner to place orders and what information is available to allow the partner to track the order process?

> Organize accelerated / accelerate shipments / "deals" – Under what conditions do you agree, and what are the economic penalties (if any) associated with each?

> Minimum inventory requirements – Do you set minimum inventory requirements and what makes sense for each? How will you "review" or measure the channel to these requirements?
> Lead Time Product / Fill Price – Assist in Planning the Channel Supplies; can you specify your lead time by product group?

> Deposit policy – What conditions do you allow the partner to compare inventory by delivering a product? By what process and at what cost for the channel?

Q. Why is it important to provide the channel as an existing and effective program?
In two words, "mind sharing" – a successful channel program can keep you "thought" in your partner's channel by offering a range of benefits in touch.

An application sets the basics for your channel connection; Expectations are clearly spelled out across all of the channel's features. Just as you set expectations about what the channel can expect from you in each of these practical areas. Obviously, this puts the spotlight on your performance or lack of living on these promises.

Channel program provides a basis for evaluating the performance of both parties in the relationship. The most effective applications will be "live documents" that can be referred to frequently while controlling the channel. Understanding what areas of the program are delivered and where the channel is canceled, you can customize your conversation / support with the individual distributor to address areas of weakness and failure.

The program works as "how to do business instructions" by going beyond the basic agreement or contract and explaining the policies and procedures in detail. This should help to reduce the calls you receive that are exactly the explanation for the process. Our experience has consistently shown that channels are attracted to manufacturers who are both predictable and easy to trade. A "how to do business" guide supports these features.

The channel program creates a context for consistency and discipline in your channel management actions. By formulating basic principles, policies / procedures, and requirements for skill requirements, you must reduce the "contract type" that often occurs in this field. This is likely to lead to efficiency (cost-benefit) in your channel management and serve to reduce channel interruptions that are often unexpected contracts.

The program provides legal protection for both parties by disconnecting ambiguity from the interpretation of performance.

Q. How effective is your program today?

Frank Lynn & Associates has created a simple review process to measure the relative performance of your channel applications. Based on our extensive experience in this field, the review will provide you with various guidance:

> How effective is your program?

> What factors seem to be particularly effective? Or useless?

> What aspects of the program should you consider? And why?


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