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CCS Distribution Partner Programs

Practical tips for developing distribution partner programs that provide real value to the manufacturer

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CCS Distribution Partner Programs

  1. 1. Customer Centered Strategies “Practical Tips For Creating Effective Channel Partner Programs” 1
  2. 2. Customer Centered Strategies Sales Enablement Consulting Customer Experience Sales Operations Channel Management
  3. 3. Channel Program Assessment Objectives • Strategy Assessment – Determine channel strategic intent and business requirements • Program & Partner Assessment – Review alignment of requirements & benefits with strategy – Evaluate partner alignment with strategic intent – Score partner performance & compliance to requirements • Program Development – Establish parameters, requirements and benefits to obtain strategic goals • Partner Selection – Select partners whose capabilities align with requirements 3
  4. 4. Desired Outcome • Enable channel program enhancements that… – Accelerate profitable revenue growth – Appropriately transfer costs to the channel – Ensure an appropriate level of service and delivery – Create efficiencies through operational consistency – Achieve desired strategic objectives 4
  5. 5. Steps to Improved Program Effectiveness 1. Solidify Program Strategy 2. Define Program Structure 3. Update Operational Policies and Processes 4. Adjust Organizational Structure if Necessary 5. Create Program and Contract Documents 6. Communicate to the Channel 7. Launch Measurements 8. Monitor & Performance Management 9. Launch Incentives / Penalties 10. Capture Partner and Customer VOC Education – to - Enforcement 5
  6. 6. Strategic Value Questions • Why do you need distribution? • What do your value from distributors? • What functions do you want distributors to perform? • What are they expected to help you achieve? 6 Carry Inventory Customer Support Time To Market Demand Generation Revenue Retention New Customer Acquisition Operational Cost Reduction Marketing Extension Reduce Inventory Order Management Economies Reduce Demand Volatility Provide Longer Lead Times Forecasting
  7. 7. Delivery • Strategic Targets, Objectives, and Metrics CES CSAT NPI Strategic Objectives 7 Revenue Growth Margin Inventory Turns Strategic Product Sales Cost of Sales NPS Ops Cost Market Share Sales Coverage
  8. 8. Partner Strategic Alignment • Assess Strategic Capabilities, Strength, and Focus… – Market Segment – Client Profile – Resources – Values – Objectives – Brand – Competition 8
  9. 9. Complexity / Performance Balance Overly complex administration for vendor programs is one of the biggest criticisms expressed by channel partners - Forrester Research 9
  10. 10. Channel Program Structure • Develop programs that reward: – Inventory and service level behaviors – Revenue growth – Overall cross-market revenue volume and penetration – Distributor cost transfer • This can be accomplished through… – Discount levels – Rebate tiers, rebate menus – Benefit and requirement levels – Communication of scorecards and dashboards – Partner performance management and comparisons 10
  11. 11. Inventory • Incorporate distributor inventory levels into program requirements or benefits – Requirement to attain rebate or price level – Rebate based on inventory performance – Standard lead time and expedite charges • Create a recommended stock list identifying part numbers that are appropriate for distribution • Tie minimum order sizes, drop ship, restock, cancellation to recommended stock list 11
  12. 12. Returns and Stock Rotation • Stock Rotation – Tier allowed % on distributor Tier – Measured against previous period shipments • Conditions: – Require offsetting order or apply a restock fee – Do not return recommended stock list items • Consider scrap program 12
  13. 13. Pricing • Pricing vs. Rebates – Corporate rebate drives executive positioning influencing inventory – Less directly impacts front line sales activity – Discounts enable your most effective partners to take share • Control Discounting Activity – Manage all discounting through ship & debit – Consider cost, time to market, complexity, price erosion • Communicate pricing levels to the market to incent achievement of next level 13
  14. 14. Menu Based Rebate Option • Assign rebate values based on value to business • Allow distributor to commit by selecting 1-2 additional menu rebates Example: Base Rebate Growth Rebate 1. Average Inventory Rebate 2. Market Leadership Rebate 3. Multiple Market Leadership Rebate 4. Project Registration Rebate (Number, $, Win %) 5. Investment Rebate 6. Training/Certification Rebate 7. Share, Loyalty Rebate 8. Behavior Scorecard Rebate 14
  15. 15. Bonus Rebate Option • Provide opportunity to receive a rebate in addition to Base and Growth Rebates when certain performance thresholds are obtained: Examples: • Market Penetration Rebate – #1 or #2 revenue position in multiple markets – #1 or #2 revenue growth position in multiple markets • Inventory Rebate – Average Inventory level above XX% 15
  16. 16. Marketing • Best-in-Class focus on marketing and advertising engagement 16
  17. 17. Marketing • Marketing and Co-Op benefit based on revenue growth – Allocating investment where growth is occurring • JMP – Joint Market Planning • Lead Management – Implementation of a lead generation process – Tracking process follow up, win % – Transfer aging leads to other distributors 17
  18. 18. Distributor Reporting • Most companies recognize the need for partner performance management, but execution of this separates Best-in-Class from the rest 18
  19. 19. Distribution Reporting “Leading vendors develop programs to perform channel partner reviews to ensure they are monitoring their channel and testing the self-reporting elements…” KPMG • Distributor performance comparisons • Distribution dashboards • Behavior scorecard – Inventory – Requested lead time – Order Size – Drop Ship – DSO – Project Registration Activity – Etc. 19
  20. 20. Best-in-Class Documentation • 75% of Best in Class Channel programs clearly defined goals that are communicated to and agreed to with each partner – Aberdeen • T&C’s that clearly and concisely spell out program eligibility, participation requirements, and details about how rewards are earned, as well as what is not qualified or allowed - CCI • Require all participants to proactively agree to these terms and conditions in advance of participation and should be readily available for all participants – CCI 20
  21. 21. Training • Consider distributor certification and re-certification programs • Track distribution rep performance following training delivery • Provide incentives for training courses, levels, or hours achieved by distributors 21
  22. 22. Contact Us 1-888-208-2234