Building the right channel marketing strategy

Few companies ever get the chance to build channel strategy afresh from the ground up. But it is an exercise that brings huge value, argued Guy Swarbrick at VIA International. He walked through the main steps in the process (see diagram).

Firstly, he argues that the debate has to start with the customer and the experience that they want.  This involves understanding how the product is used, how it is purchased and where it is in the customer life cycle.  How is the market changing?  What are the fundamental trends?  What does the future look like?  Finally, markets need to be segmented.  Here it is important not to come up with something too complex, but to identify the few sectors to focus on.

Swarbrick says that often the information needed for this crucial first stage resides in different parts of the company.  Bringing the data together creates a vital foundation which has to be built before considering channels.

The second stage is to map out the customer value proposition and look at which channels can best deliver this. Swarbrick suggests mapping out all the activities needed to deliver the experience to the customer.  "You can then ask which of these should be done in-house and which devolved to the channel and also which channel is best able to handle them?"

The channel eco system can now be mapped out.  Which partners are capable of handling the task and how many of them are there?

In the third stage you need to drill down to better understand the capabilities of different channel partners, and what they want.  Swarbrick warns that you can not trust the labels that intermediaries want to stick on themselves. "You need to look at what they can really deliver.  Many distributors offer a lot of services which you would not associate with the wholesaler label."
It is here that suppliers should be developing a channel value proposition: in other words an answer to the question: "Why should I sell your product?"  This has to latch into the channel partner’s business model in order to have real power.

Finally, the company needs to look in upon itself and ask "how should we organise to enable all this?" 

Oddly enough, many suppliers who perceive themselves as channel-centric, fail to do this, contends Swarbrick.  Often marketing programmes focus entirely on the end-user and ignore the existence of intermediaries altogether.  Suppliers may fail to measure channel profitability properly.