17 - How to sell to final-tier trade channel players

Question 1

What does selling ‘to’ a final-tier trade channel player involve?

Answer 1

Demonstrating how you can deliver business benefits from working together.

Question 2

What is the role of the final tier in the distribution model?

Answer 2

A route to market to the end customer.

Question 3

What must vendors demonstrate to win and retain share of the final tier’s business?

Answer 3

That their value proposition is more compelling than the competition.

Question 4

What benefits can a leading brand offer to a final-tier trade channel player?

Answer 4

• Strong customer demand
• Low cost of selling
• Robust support infrastructure

Question 5

What approach do smart suppliers use to keep their channel value proposition in tune with the market?

Answer 5

Running partner advisory boards for regular dialogue with partners.

Question 6

What is essential for defining a channel strategy for the final tier?

Answer 6

Researching the business models and objectives of the channel player types.

Question 7

What should a final-tier channel value proposition outline?

Answer 7

• Role in market access
• Focus on customer segments
• Functions to be fulfilled for payment
• Standards of accreditation and resources
• Expected business volumes and costs

Question 8

What can segmentation of the final-tier trade channel improve?

Answer 8

Understanding of channel economics in terms of cost per lead, cost per sale, and cost to serve.

Question 9

What margin do national retail partners typically demand for product placement?

Answer 9

Between 30 and 50 percent.

Question 10

What is the most significant dimension of a channel value proposition?

Answer 10

Predictability.

Question 11

What do final-tier trade channel players expect from vendors?

Answer 11

A predictable source of commercial profit.

Question 12

What can cause channel players to distrust a vendor’s commitment?

Answer 12

Vendors ‘dipping in and out of the channel’.

Question 13

What do channel players want from their vendors regarding market strategy?

Answer 13

Clear channel strategy and well-defined rules of engagement.

Question 14

What kind of investment is required from channel players for technical products?

Answer 14

Training and dedicating resources to the vendor’s brand.

Question 15

What are the key dimensions of an effective channel value proposition?

Answer 15

• Growth
• Profit
• Productivity

Question 16

What should vendors check for relevance regarding growth?

Answer 16

• Market share
• Investment in marketing
• Positioning for growth

Question 17

What should vendors quantify to support their value proposition?

Answer 17

The value of the benefit stream.

Question 18

What should a vendor offer to improve a channel partner’s ability to earn higher margins?

Answer 18

Protected market space.

Question 19

What type of funding do vendors provide to channel partners?

Answer 19

Marketing funds.

Question 20

What is a critical aspect of productivity in vendor-channel partner relationships?

Answer 20

Reducing overhead costs for partners.

Question 21

What is the expected outcome of joint business planning between vendors and channel partners?

Answer 21

Pursuing new opportunities together.

Question 22

Fill in the blank: Final-tier trade channel players expect vendors to provide a _______ source of commercial profit.

Answer 22

[predictable]

Question 23

What are standardized systems and processes in the context of partner support?

Answer 23

Systems made available over the web through partner portals.

Question 24

What type of training should vendors provide to their partners?

Answer 24

Training in products and generic skills such as core technology, diagnostic processes, project management, integration, sales, or interpersonal skills.

Question 25

What is the least well-exploited aspect of many vendors’ channel value propositions?

Answer 25

Productivity.

Question 26

Why might a regional dealer struggle with brand recognition?

Answer 26

A regional dealer could not build a globally recognized brand that attracts customers.

Question 27

What is lead generation in the context of vendor-partner relationships?

Answer 27

The process of distributing leads to partners and actively generating leads.

Question 28

What does co-branding involve?

Answer 28

Providing access to other leading brands through co-branding or co-marketing.

Question 29

What is the significance of resource alignment for partners?

Answer 29

It multiplies the productivity of the partners’ own resources.

Question 30

What is consignment inventory?

Answer 30

Inventory that the channel only pays for when it sells.

Question 31

What is the role of account managers in managing channel relationships?

Answer 31

To ensure the partner’s strategy is aligned with the vendor and manage processes and resources to the partner’s benefit.

Question 32

What should vendors regularly do to assess the effectiveness of their channel value proposition?

Answer 32

Survey their channel partners.

Question 33

True or False: Distributors have their own end-customer brand to attract new channel players.

Answer 33

False.

Question 34

What is a key element of broadline distributors' propositions?

Answer 34

One-stop shop for a multi-vendor product range.

Question 35

What are some services that broadline distributors may offer?

Answer 35

* Specialized logistics (drop shipment, consolidation) * Outsourced marketing services * Project management * Financing.

Question 36

What are the three primary needs of final-tier channels?

Answer 36

* Growth * Profit * Productivity.

Question 37

What does joint business planning involve for final-tier players?

Answer 37

Helping them with their business planning.

Question 38

What factors can affect margins for final-tier players?

Answer 38

* Front-end discounts * Back-end discounts * Functional discounts * Rebates * Bonuses.

Question 39

What should vendors offer to help minimize overhead costs for final-tier partners?

Answer 39

* Specialized logistics services * Marketing services * Technical support.

Question 40

What is the importance of asset deployment for distributors?

Answer 40

It allows for advantageous credit facilities or terms compared to competitors.

Question 41

Fill in the blank: The best vendors regularly survey their ______ to track the competitiveness of their channel value proposition.

Answer 41

channel partners.

Question 42

What can lead to a distributor's customer base churn?

Answer 42

Final-tier players seeking to avoid over-dependence on one distributor.

Question 43

What is the potential downside of competitive pricing among distributors?

Answer 43

It leads to short-term gains but does a disservice to the market.

Question 44

What is a benefit of leveraging bulk-buying power for distributors?

Answer 44

Access to resources and services that wouldn’t be available to individual final-tier customers.

Question 45

What is the significance of having a preferred distributor status with vendors?

Answer 45

Enables offering superior marketing or technical support to customers.

Question 46

What types of training should distributors offer to their channel customers?

Answer 46

Training in new technologies and products.

Question 47

What is the typical relationship between the credit limit provided by multiple distributors to a single player compared to that from an individual distributor?

Answer 47

The credit limit given by multiple distributors to a single player is usually greater than that provided by any one distributor.

Question 48

In competitive markets, what are the primary focuses for distributors?

Answer 48

Price and availability.

Question 49

What is a characteristic of mature markets compared to competitive markets?

Answer 49

Fewer price-led propositions and stronger business-focused propositions.

Question 50

What percentage of partners typically deliver 80 percent of revenues or profits?

Answer 50

20 percent.

Question 51

What are the two critical success factors for managing key account relationships?

Answer 51

* A strategic account management process * A properly skilled strategic account manager.

Question 52

What role do strategic account managers (SAMs) play?

Answer 52

They establish themselves as trusted business advisers to their final-tier partners.

Question 53

What should the strategic account management process engage?

Answer 53

The top-level management of both the vendor/distributor and the final-tier partner.

Question 54

True or False: A selling mindset is beneficial for a strategic account manager.

Answer 54

False.

Question 55

What is the primary purpose of account management?

Answer 55

To 'grow the pie' of business opportunity for both the vendor and its partners.

Question 56

What should be included in joint business planning?

Answer 56

* Market research * Strategic goals * Common objectives.

Question 57

What are some rules of thumb for making compelling business cases?

Answer 57

Strategies should be differentiated based on market share position.

Question 58

What advantages do market share leaders typically have?

Answer 58

* Strong brand * Ability to spread marketing costs over more unit sales. * Demand pull in the channel value proposition.

Question 59

What is a disadvantage for leading brands in terms of distribution?

Answer 59

Downward pressure on the gross margin percentage.

Question 60

For small vendors or new entrants, what must their channel value proposition include?

Answer 60

High gross margins.

Question 61

What can enhance a small vendor's channel value proposition?

Answer 61

Credibility for their offerings.

Question 62

What is a common strategy for retailers regarding product sales?

Answer 62

They often make a higher margin on accessories than on core products.

Question 63

What do trade dealers want to know about new products?

Answer 63

The level of technical support and backup available.

Question 64

What is the final ingredient for a compelling channel value proposition?

Answer 64

The high degree of influence partners will have with the vendor.

Question 65

What is the role of 'sell-with' partners?

Answer 65

They can advocate for your product without directly selling it.

Question 66

How can vendors enhance the capabilities of their advocates?

Answer 66

By maintaining a dialogue through seminars, bulletins, briefings, and conferences.

Question 67

What type of events do leading advocates in the IT sector often host?

Answer 67

Conferences aimed at different communities.

Question 68

What is essential for vendors to do in order to build a reputation with the advocate channel?

Answer 68

Deliver genuine technical briefings and updates.

Question 69

What is a necessary condition for the channel to take products to market?

Answer 69

The products and services must be relevant and competitive.

Question 70

What should a compelling channel value proposition address?

Answer 70

The economic terms relevant to potential partners' business objectives.

Question 71

What does segmenting your channel enable?

Answer 71

Segmenting your channel value proposition.

Question 72

What should be investigated for more strategic partners when designing a proposition?

Answer 72

Their particular objectives and pressures on their business model.