Tune in to your Channel

Voice of the Channel: business listening for mutual success

Many original equipment manufacturers (OEMs) face a very real business challenge: reliance on indirect sales and service networks to sell their products and to be the local face and expert for their brand. Too often OEMs do not provide what their channel partners need to be successful: not through lack of effort, intent, or investment but via gaps in understanding. Smart OEMs regularly collect and use VOC – in this context the Voice of the Channel – because they appreciate the advantages of including the channel perspective in their growth strategy.

Importance of indirect channels to OEMs

OEMs have long relied on channel partners (distributors and dealers) to serve as a bridge to their end customers. In 2016, wholesale distributors made up an estimated 29% of the United States gross domestic product and employed nearly 5 million workers. The value of the channel to the OEM and end customer includes:

  • Expedited response times: Today’s customers expect a quick, real-time response. Channel partners can typically offer a faster response than OEMs because they are more localized and nimble.
  • Multiple, convenient locations: Channel partners enhance the sales and service reach of OEMs. They provide a local presence that fosters personal relationships and builds brand loyalty.
  • Total solutions: Distributors and dealers can bundle and create value-added packages because they represent multiple products and companies. This streamlines the user’s buying process and can lower costs.
  • Inventory management: Wholesale distributors are willing to buy in quantity and sell in small lots thus reducing OEM inventory burdens while increasing customer choice.

 

Advantages of including the channel perspective

Having partners means that you and another business work toward a common goal, commonly profitable sales growth. You win together. Distributors and dealers are somewhat unique in that they are both a business partner and a customer at the same time. So, it makes sense for OEMs to look at their channel partners as they would their best customers – understand them, build relationships with them, educate them, and remove barriers to their success.

Some OEMs have realized this and view their system of distribution and product support as their greatest competitive advantage. But an ineffective channel partner program can have the opposite effect. Including the channel perspective has a positive impact on building trust – who doesn’t prefer being “asked” rather than “told?” This reduces channel partners barriers to change efforts aimed at helping them become better business people, brand advocates, and sellers.

 

Voice of the Channel focus areas

If your channel sales programs are not delivering their expected results, start developing a framework for structured listening. This might take the form of interviews, surveys, interactive webinars, advisory councils, or some other. Common areas that yield a rich return:

  • Channel understanding: Channel partners vary greatly in size, scale, location, and brand loyalty. What are they trying to accomplish, how are they organized, and how do their needs differ?
  • Channel input: Dealers and distributors can be suspicious of OEM intentions but have strong, informed views of their business. What does the channel partner need from the OEM to grow their business?
  • Communication: Successful OEMs can cut through the noise. What are the topics of greatest interest to channel partners, who should receive them, when and by what method?
  • Training and education: All channel partners need up-to-date product information, and many benefit from access to business skills training. How do the training offers (location, frequency, content, quality) and incentives match to the channel needs and desired way to learn?
  • Ways of working: Dealers and distributors work differently than OEMs. What tools and processes are holding them back?

 

OEMs that nurture strong relationships with their channel partners are making a smart move to succeed in today’s changing world. Business leaders who include the Voice of the Channel in their growth strategy will have a leg up on their competition. They know it’s the foundation for building trust, prioritizing next steps, and enabling change.

If you would like to discuss this topic in more detail, please contact us at inquiries@aptussc.com.