Issue No 12
Channel Strategy Consultants
USA - EUROPE - AUSTRALIA - BRAZIL - HONG KONG
What is Marketing Commitment?
The difference between being committed and being involved is true to
the whimsical analogy between bacon and eggs. The pig is committed, the
chicken, having merely laid another egg, is involved. In the same manner
commitment differs from campaigns.
Commitment, unlike campaigns, requires long term objectives. It also
requires comprehensive long-term strategies, devised and monitored with
the aid of research and backed by appropriate capital investment – that
is financial commitment.
No major innovation and/or irreversible change has ever been achieved
without the resolute implementation of those prerequisites.
How to Improve Resellers’ Performance Through Commitment
Let’s assume a company has in place the basics all resellers
(dealers, distributors, etc) expect of suppliers: financial returns,
product quality, competitive price, reliable delivery and a sound
What else can a company offer its resellers to persuade them to give
that extra bit, and to improve their technical selling and assistance
capabilities? How does it compete successfully for resellers’ time and
effort, or indeed gain an edge over comparable competitors’ products
carried by them?
The answer to that question, first and foremost, is commitment to long
term strategic programs that are of real and demonstrable value to
Only sustainable commitment provides resellers with superior value from
the resale of its products, or from support programs and incentive
relative to those offered by other companies, can bring about the desired
dependency and/or reliance upon which resellers’ improved marketing
efforts are predicated.
The Four-Step Approach
The process of gaining such an advantage with resellers, or channel
positioning, involves four strategic steps:
Step One: establish expectations
Step Two: identify channel positions
Step Three: build partnership advantage
Step Four: promote the established channel position
The following elaborates on these steps:
1. The company must ensure that
resellers are clearly aware of its expectations in the way of performance,
as well ad desired levels of market penetration. This requires
strategically structured, ongoing communication, preferably
2. The company must identify the most
advantageous channel position to build. Such a position must be
consistent with the company's capabilities, as well as objectives and
strategy. But most importantly, it must clearly distinguish the
company from its competitors, among resellers as well as the final
3. This is all about constructing a
strategic package of offerings to secure a partnership advantage with
resellers. Such packages fall into three categories, namely:
- The company must ensure that resellers are clearly aware of its
expectations in the way of performance, as well as desired levels of
market penetration. This requires strategically structured, ongoing
communication, preferably face-to-face.
- The company must identify the most advantageous channel position to
build. Such a position must be consistent with the company’s
capabilities, as well as objectives and strategy. But most
importantly, it must clearly distinguish the company from its
competitors, among resellers as well as the final customer.
- This is all about constructing a strategic package of offerings to
secure a partnership advantage with resellers. Such packages fall into
three categories, namely:
- The five basic prerequisites mentioned earlier which relate
basically to the company’s marketplace position and the resulting
financial returns to the reseller in respect of the functional
discount provided, volume sales and inventory turnover, and a premium
for performing additional services.
- Capability building programs. This area is pivotal to companies’
commitment, as well as offering the greatest scope for initiative and
innovation. Programs designed to build desired reseller capabilities
do not only improve skills (which ideally are not directly
transferable to the lines of other suppliers), but also build reseller
Key programs may involve:
- Promotional support, including co-operative advertising,
merchandising assistance and joint sales calls
- Responsiveness systems to identify, anticipate and resolve resellers
needs and problems
- Training courses, including product applications, selling, technical
- Technical assistance through hiring field technical assistance or
implementing a computer-networked expert systems, and
- Market research to provide sales leads and identify cross-selling
- Incentive programs. Because they are tactical in nature, resellers
sales force incentive programs should be selected after the other two
components have been determined. Alone, such programs rarely have
long-term benefits, but used to support and reinforce long-term
strategies they can help generate enthusiasm and improve performance.
The Reseller Support Spiral
However, all such incentives should be pre-tested and closely monitored
throughout operation. In any case, they are least likely to create a
significant partnership advantage.
calls for a range of promotional initiatives to communicate to resellers
the company’s channel position. This can involve
anything, ranging from advertising or gaining media coverage in trade
journals to sales presentations.
The proposed four-step strategic approach strives to achieve a
long-term channel position based on commitment to building an effective
and sustainable partnership with resellers.
Such a partnership advantage can be expected to result in an improved
marketplace presence – and bring home the bacon – because it promotes
consistency between reseller programs and overall company strategy;
provide programs that satisfy reseller requirements as well as surpass
competitive offerings; and creates a long term reputation among resellers
based on the company’s distinctive competency, as well as its
may be reproduced
provided IF Consulting is acknowledged.