Reward value creation
If senior sales directors are rewarded purely on the basis of sales levels or market share, then it can be difficult to get them to pay much attention to value creation and to measuring real channel profitability.

This, of course, is a chicken-and-egg situation.  Until you can measure profitability, you can’t reward those who attain it.

Percolate the new ideas throughout the organisation
Electrolux held high-quality training during the year for a picked European Èlite of account managers.  Having trained them in the new approach, and given them the new tools, the hope is that they will then go back to national subsidiaries and start asking the right questions. Slowly the new thinking will start to percolate through the organisation. Bailey, an accountant by training himself, says: "I knew I was winning when I started getting calls from local controllers in the national subsidiaries complaining that they were getting a host of new data requests from their sales teams."

Beware complex IT systems
Bailey stresses that whatever system you come up with has to be simple and easy to use. That means avoiding complex IT systems, especially when you are first setting up new ways of measuring channel profitability.

"Over and over again you see situations where people think that by deploying some expensive piece of software they have solved the problem. In practice, you shouldn’t deploy customer-relationship-management systems until you understand precisely what you are trying to measure.  Complex software creates its own imperatives."

In fact, Bailey advocates that sometimes using simple spreadsheets is sufficient. "It is vital that account managers really understand the tool you are giving them."  He adds: "They need to be able to take the systems and immediately use them in their jobs.”

As people develop their expertise, so new and more robust systems will have to be deployed.

Train and empower account managers
The key here is to give account managers the tools to do the job. One of the most effective is a solid understanding of how the partner across the desk from them actually makes money at a business level.  This allows them to position their channel value proposition effectively.  It also enables them to move away from the fight over margins.

You also need to look at how account managers are incentivised.  No matter how well they are trained, if account managers are paid purely on quota they won’t develop a relationship that generates business, as opposed to one that simply fulfils business.