One of the questions which CONTEXT includes each year in its ChannelWatch survey is the effectiveness of vendor channel-marketing programs. Over 5,000 active resellers responded to last year’s survey, and HP received the top ranking with 74% positive responses, a small but significant lead over Apple.
Apple’s ranking demonstrates the respect resellers have for its success in driving traffic and sales, even if they have less chance to be involved in the company’s channel-marketing programs. Other PC suppliers who score well include Asus, Fujitsu, Acer, Dell and Lenovo.
Printer manufacturers Ricoh, Epson and Brother also appear in the top 19. These results are surprising in light of the sluggishness of the printer market, and illustrate the success of vendors who work harder in a declining market.
Intel and AMD sell little to end users through direct or indirect channels. The relatively strong scores they achieve for their channel-marketing programs show how successfully they support the sales of products containing their chips and other components.
So how did HP win the top spot? What are the factors that make a channel-marketing program successful? When former HP executive Todd Bradley took over as head of consumer at the company in 2005 he dealt with the fundamental issue – the decline in good relations with retailers. Logistics were not working well, programs were not clear, and there was little marketing support. He built HP’s position through using focused marketing campaigns and by repairing relations with retailers and resellers.
Four Ways to Optimize Channel–Marketing Effectiveness
Ultimately, HP’s consistent engagement of the channel and attention to its partners have been the blueprint for its success. In summary, there are four key ways to build channel-marketing effectiveness:
• Well thought-through and executed channel management processes build the confidence of retailers and resellers. They know what to expect, they know how they will be remunerated, and they get paid on time. Some vendors outsource channel-marketing management payments because providing accurate, timely payments is so important for giving partners confidence in the company. This is one of the ways in which Lenovo has grown the respect of its partners in recent years.
• Using metrics to develop insights into which resellers and groups of resellers are the high performers. This is a crucial management tool; because there is high turnover in resellers, vigilance about their performance is important. Program effectiveness also requires knowing how well you have penetrated the top resellers compared to your competitors.
• Marketing campaigns that help resellers promote your brand amidst the others they offer. Brother’s “141% campaign,” which targeted businesses such as architects and café-owners, helped resellers effectively establish their A3 printers in SMB.
Not being afraid to test new routes to market from the multiplicity of available channels. Vendors must enable end customers to buy product from whomever they want: retail for consumer, retail for small business (0–25 seats), resellers, etailers or referral partners. At the same time, the job of the channel manager is to be fair to all partners and resolve channel conflicts as soon as they arise.
Optimizing Channel-Marketing Programs for Future Success
What about the future? Consumers and businesses now have the power to purchase product wherever and whenever they want. What strategic adjustments do vendors and distributors need to make, given the changes caused by the omnichannel revolution?
CONTEXT recently conducted an omnichannel survey with top retailers across Europe. The results clearly indicate that most retailers are still in the process of transforming their systems to cope with the challenges of omnichannel. In addition to aligning technology and systems for today’s marketplace, vendors must also consider how to adapt channel-marketing programs to engage customers across more touch points and purchase options.
Our recommendations fall into three categories:
• Understand your reseller and retail partners’ omnichannel strategy. While there are some commonalities based upon expanding online to reach customers early in the buying process, each reseller is developing their own unique strategy for differentiation. Some are focused on optimising long-tail SKUs, others are curating assortments. Channel-marketing programs need to be adapted to help resellers drive traffic and convert sales for the strategies each reseller employs across both time and place of purchase.
• Tailor your programs to those delivery channels which are working, realising that the results may dramatically shift each season. According to a CONTEXT survey of 1,000 UK consumers, 28% of shoppers who bought something on the Black Friday weekend in 2016 used click and collect exclusively. With click and collect projected to double in the next few years, how do you decide the right stores and delivery channels to target your marketing spend? How can you as a vendor or distributor offer drop-shipment services to retailers in order to assist them with home delivery?
• Omnichannel is dramatically altering the historical foundation of retail. The 4 Ps of marketing (Product, Price, Promotion, and Product) are being replaced by the 4 Cs (Custom, Choice, Convenience, and Connected). Future success will require adapting marketing programs to be more “customer-centric.” Best practices will increasingly focus on the 4 Cs and how to earn and retain connected customer relationships at the lowest cost.