• 3 Keys to a Successful Channel Distribution Strategy

    Establishing a successful distribution strategy requires deep analysis of your specific business needs and a strong tactical approach to selecting the right distribution partners.  Here we break down three essential keys to building a distribution strategy that works.

    Define where distribution fits into your business model

    It may sound obvious, but defining where distribution fits into your business model is a crucial first step to developing a successful distribution strategy. Make exact delineations about your distribution needs and capacities to see where you stand and what you need. Why does your business need distributors at all? For speed or access to market? To hold inventory? For basic distribution and operational capabilities? Extended value proposition? These questions have very specific answers that should be used to help guide the basic decision-making process of developing a strong distribution strategy. 

    Understand what type of distribution partner you need

    Once you have defined where distribution fits into your business model, it’s important to understand what type of distributor can play the role best. The type of distributor you need—Broadliner, Specialised, VAD, Niche, etc.—will depend on a comprehensive analysis of your distribution requirements, and then understanding what kind of distribution partner best matches those needs. Learn the strength of different types of distribution partners, and then build a robust model in terms of targets and goals you want to achieve as part of the distribution partnership.

    Mike Trup Managing Director of Interactive Ideas a UK based VAD had these comments to add ‘the level of engagement and enablement required in the resellers is pretty key as is how generic is the skill set required of the partner. Typically if the technical skills are rare or a very high amount of consulting and customization is required during each implementation, then a distribution relationship is not a natural fit e.g. ERP software is hard to scale using distribution for these reasons.’

    Select the right distribution partner with the most relevant skills and relationships

    When you understand what type of distribution partners are suited to your business model, it’s time to actively seek out candidates that can bring the right skills and relationships to the table. How do they go to market? How large is the sales staff? How are they organised, in terms of administration, sales, delivery, project management, etc.? Do they work with competing vendors? What is your projected revenue and profit stream? What is their overall level of engagement, including communication practices, business development, training, marketing, customer service, and community management? Do they have the clout and right skills to manage credit relationships? Finally, remember to be selective, offer training, incentives and strong margins, do demand generation, and recognise good partners for their achievements.

    To gain further insights into channel strategy best practices download this free guide entitled: Destination Europe: A CEO’s Guide to Developing a Successful Channel Strategy

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