The current state of the economy is something to be gawked at. How did we fall this low? There is no clear answer. All we can do is adjust and hope to make the best decisions when it comes to forming a marketing strategy that will help us weather the storm. However, there are a few things to consider when trying to decide what to do with channel resources.
- Should we allocate all resources to the top performing partners?
- If so, how can we alleviate competitor encroachment and maintain market share with few customer touch-points; or
- Is it better to develop a new strategy to help the entire channel base become more efficient and better marketers?
Successful channel organizations will find it necessary to pay careful attention to the day to day management of their channels with the first inclination being to cut resources to lesser-performing partners. There are several benefits to this approach. First, channel marketers will be able to help those top-performing partners build relevant offerings for the customer more quickly. The overall flexibility and focus of the channel then becomes priority. However, what happens when you cut the 80 percent of channel partners who are your only means of contact with customers? You lose market share. If everyone starts adopting this defensive approach to budget allocation for the channel, the first competitor to come along with a well-rounded partner base will not only steal the market but also retain that customer base making it harder to tap into new sales when resources are back to normal.
I would like to present a different point of view aside from relying on only a few large partners. Why would you want to limit and cut yourself off from a vast partner base? True, while budgets are becoming smaller and smaller, it is harder to allocate resources to less successful partners, but what if there were a way to cut costs even further and still maintain a full partner channel while increasing leads and sales?
Moreover, what happens when those few partners you decided to invest in become financially unstable and go under? Not only did you lose your top-selling partners, you’ve also lost a major revenue generator. Companies that allocate cost-effective methods of helping out the less resourceful end of the channel (those under the top 20% of partners) to reach the end consumer will ultimately capture the market. On top of that, utilizing the entire channel will limit competitor encroachment and allow for a capture of market share. When the competition cuts touch-points with consumers by cutting channel resources (thus giving up market share), marketers with the largest channel presence will be able to come in and capture that portion of the market.
For example, your top 20 percent of partners generating 70 percent of your revenues are probably already operating at maximum capacity. They have a large amount of resources when it comes to marketing and sales and are probably mature companies. That’s why they are your largest revenue generators. Enabling the other 80 percent of your partners can really increase your profit margins if done properly. To do this, you have to give them the same resources, expertise, and marketing capabilities that your top partners have.
The most cost-effective way to do this is by using a cloud marketing strategy that works best for you. If your partners are in need of training on how best to sell your products, a cloud training portal may be the best choice. If your partners have few marketing resources, it is probably a better idea to develop a cloud marketing resource library that partners can use to quickly and easily get your product information in front of customers. Something my company does is create a pipeline between enterprise (manufacturers) content and partners’ (VARs) websites. This allows you to get your product details and promotions on an unlimited number of partner websites and in front of customers as quickly as you can develop the content. This helps prevent content on partners’ websites from going stale by keeping it up to date and true while maintaining the enterprise’s branding and message integrity. The benefit for partners is that they have to do absolutely no website maintenance. Once the content is placed on the website once, it is automatically updated each time there is a new product offering or promotion.
So you can see how using a cloud marketing strategy can be extremely effective, especially at times when your budget may not be what it used to. It minimizes the cost it takes to help each partner become a better marketer of your products and allows you to allocate resources to all your channel partners, not just the top 20 percent.
What are some ways you plan to change your channel strategy based on the current economic conditions?
