Services

Channel Strategy

The big picture. Do you have the right mix of channels to achieve your goals? What are the roles of each channel and how should the manufacturer recognize and compensate each channel?  Should you sell direct or through distribution? One step or two-step? Do you have enough or too many channel partners? Should you deploy an exclusive, selective or open distribution policy? How do these factors vary by product, market or customer segment? How does the channel strategy impact channel profitability and therefore behavior?

Partner Programs

Partner programs pull together all of the requirements that channel partners must achieve in order to qualify for discounts, rebates, recognition, leads, marketing funds, sales support, deal registration, product line access or other benefits. The program aligns with the overall channel strategy and combines the tiers, segments, levels, benefits, terms and conditions into a unified structure that motivates channel behavior and recognizes value-add in support of the target customer.

Target Street Price

Channel margins are the difference between the net purchase price and the channel’s selling price. Is the channel selling the product or service at the right price? Why or why not? Does the street price reflect the value of the product to the end user in a competitive market?  Instead of increasing discounts or rebates, what can a manufacturer do to ensure that partners sell at the Target Street Price?

Discount Structure Design

Once the Target Street Price is known, the discount structure establishes the foundation for channel and manufacturer’s margins. Should each channel or channel partner earn the same discount? Why or why not? Can the manufacturer differentiate discounts based on partner value-add? Should the manufacturer build performance-based or functional elements into the discount structure to drive partner behavior? How much spread should exist between levels? Do discounts effectively transfer costs out of the manufacturer’s business to the distribution channel?

Rebate Programs

Rebate programs drive behavior. Manufacturers can set up structures that reward growth or factors that indicate value-add. Most industries use some type of rebate structure to motivate partner behavior since the channel often can protect the rebate as part of profit. The questions for the manufacturer are do the programs drive the right behavior? Are they effective? Do they represent the right mix of discount versus rebate and are they needed at all?