Delivering Value Through Channel Partners

To many sales and business executives, developing channels, reseller relationships, or other similar partnerships is driven by finding cost effective means to covering markets or geographies. While this is compelling, I'd like to suggest a more effective strategy for developing and implementing your channel and partner strategies---if well executed, it will also be a cost effective way of reaching your customers.

Partners can be a key differentiator in developing, communicating, and delivering value to your customers. Today, no organization can deliver everything the customers need. Partners and resellers can be effective in adding to your total value proposition, better addressing your customer's needs and further differentiating your total offering from the competition. They can help fill holes in your value proposition, extending the strength of the total offering to your target customers.

In designing a value based channel,you should start with your target customer segments and work backwards. Make sure the value delivery chain you put in place adds to the value your offerings. Each partner should add value that complements yours and creates a greater value for the total offering to your customers. The picture below shows an example.

If your partners are not adding value and improving the total value proposition to the customers, they are adding cost --- detracting from your value proposition and competitiveness.

There are many ways partners might add value: relationships with customers is one area. Skills and capabilities that complement yours--for example implementation, installation of your products, local support, the ability to integrate complementary products for a richer solution, and others all represent potential value they might provide.

When building a channel that complements and enhances the total value of your offerings, make sure you understand one other element of value. What is the value that you provide your partners? If you are not providing them value, it is very unlikely the relationship will produce results. A way to think about this is illustrated below.



The decision to use partners should be driven primarily by filling gaps in your value proposition. If your partners add value in reaching your customers, and you add value to them, you will probably have an effective, efficient and high performing channel--creating great results for your mutual customers as well as for each other.

Partners In EXCELLENCE is the recognized leader in helping organizations develop and communicate differentiated value propositions. We are also recognized for our expertise in developing and implementing high impact partnering and channel strategies.

If you need to sharpen your tools, processes, thinking, and skills in value propositions, look at our Value Proposition Solutions, follow the link. For a copy of our free Value Proposition eBook, follow the link.

For our eBook, Partnering for Profitability, follow the linkg

For any other information about how Partners In EXCELLENCE can improve your organization’s capabilities in understanding, developing, communicating and delivering differentiated value, or i ndeveloping and implementing your channel strategies, please contact us at +1-949-305-7146 or dabrock@excellenc.com

How Important Are Partnerships To Your Sales Strategies?

I have written a lot about Strategic Partnerships and Alliances as part of your sales strategies. Over the past tow weeks we have been conducting a survey on the importance of partnering to sales strategies. We gotten good participation and, on a preliminary basis, some very intriguing results. Some of the results are actually a bit of a surprise to me---I think people will be quite intrigued with what the final outcome.

We will be closing the survey on June 12 and publishing the results soon afterwards. We wanted to give people a final chance to participate in this important research. To take the survey, please click on this link: Survey On Customer Partnering And Supply Chain Relationships.

The survey should take less than 15 minutes to complete. Everyone completing the survey and requesting a copy of the results will get a copy of the report at no charge. As an additional incentive, we will be conducting a drawing for a winner to choose one of the following, a 32GB iPod Touch or Kindle 2. One of those will be awarded to the winner.

Again, please take the time to complete this survey. All results are completely anonymous. Follow the link: Survey On Customer Partnering And Supply Chain Relationships.

Thanks for your help with this survey. It is open for anyone to take, please forward this mail to colleagues, customers, and suppliers who may be interested in this issue. We will close it on June 12 and all participants will receive a free copy of the final report afterwards.

Strategic Partners---How Important Are They To Your Sales Strategies -- A Survey

Over the past 2 months, we have written a lot about Strategic Parnerships and Alliances as part of your sales strategies. Two of the posts are:

Sometimes All We Want Is Good Customers, Sometimes All Customrs Want Is Good Suppliers
If Your Suppliers Are In Trouble, Then You Are In Bigger Trouble

We've gotten a lot of queries and comments from people who have seen these articles. Many share our views that strong supply chain relationships are critical to successful implementation of their sales strategies. As a result of these conversations, we have decided to research this issue more deeply. We are looking at several issues that seem to have resonated with people:

• The importance of partnering and alliances as a part of their sales strategies.


• The importance of partnering as part of the vendor management strategies.


• The interrelationship of these issues in overall success of the
  organization.

To help us gather information about these critical issues. I'd like to invite you to participate in a short survey, Survey On Customer Partnering And Supply Chain Relationships. The survey should take less than 15 minutes to complete. Everyone completing the survey and requesting a copy of the results will get a copy of the report at no charge. We will be offering the results to others for $49.95.

Please take the time to complete this survey. All results are completely anonymous. Follow the link: Survey On Customer Partnering And Supply Chain Relationships.

Thanks for your help with this survey. It is open for anyone to take, please forward this mail to colleagues, customers, and suppliers who may be interested in this issue. We will close the survey roughly at the end of May and will publish the report in mid June.

Sometimes All We Want Is Good Customers. Sometimes All Customers Want Is Good Vendors.

With this post, any doubt you may have had about me will be eliminated. You will know that I am schizoid, have multiple personalities, or some other disorder. In the last couple of months, I have written a number of times about establishing rich collaborative relationships and partnering with your customers. In this article, you may perceive me as reversing my position.

I'm reacting to a lot of things I hear sales and marketing people talk about these days. "Partnering" is the "it" word for sales and marketing these days. I've just been watching a marketing campaign and commercials by the CMO of a major corporation, a guy I really respect, announcing some new products. The tag lines focus on "partnering," and "we partner with you, not compete with you." I look at the materials, and they really are a pitch to get me to buy more stuff.

Not being one to pick on just one person, virtually every conversation I have with sales people and managers contains the "p-word." Everyone wants to partner with their customers. They talk about establishing partnerships, yet down deep, all we really want to do is sell more stuff.

Somehow, it seems the "p-word" is better than going to a customer and saying: "I think I understand what you are trying to achieve, your goals, needs and priorities. I think I have a solution that will exceed your requirements and provide you great value. If I can demonstrate our solution produces superior value, I would like you to buy it." I guess that's too sales-y. Somehow, it seems better to say we want to be your partner and to dance strangely around the fact that we just really want them to buy our stuff.

Sometimes---in fact more often than not, all we want to have a great customer-vendor relationship. One in which we provide products/services that solve a customer problem and create great returns for their investment. Sometimes---more often than not, that's all the customer wants. So why don't we just be direct and not complicate what we are trying to achieve with meaningless language, "we want to be your partner." Why don't we focus on providing great customer service, great products, and great buying experiences?

When I speak of establishing deep collaborative relationships/partnerships, I am thinking of relationships in which there is a deeper degree of commitment and interdependency between organizations. Partnerships are tough---70-80% fail. They require deep commitment, strong support at all levels, and lots of work. They can produce tremendous value and returns for each partner. However, no customer can afford to partner with all their vendors. No vendor can afford to partner with every customer. It is simply too expensive, too difficult to manage and does not produce the required returns for each side of the relationship.

Partnering and rich collaboration should be reserved for your most important and strategic suppliers. It should be reserved for the most strategic customers. I believe these relationships are critical to all organizations, but they don't represent the majority of relationships.

Sometimes, all we want is a great supplier, or a great customer. Many of the underpinnings to partnerships also apply to these relationships: creating value, great service, win/win, and many of the other principles.

Sometimes, as a customer, I want to go to people like this CMO, and say, "I don't want to be your partner. I just want to buy good products that meet my needs. Can you demonstrate your products does this better than the others I am considering?" Then I want them to sell to me.

Where You Are Depends On Your Point Of View, A Fragile Sales Ecosystem

I've gotten a number of very positive comments on my post last week: If Your Suppliers Are In Trouble, Then You Are In Bigger Trouble!

I wanted to expand on it, and to see if I could expand the dialog in the community----meaning, Please Send Comments---regardless of where you see this, at my blog site, the Customer Collective, Sales Management 2.0, Top Sales Experts, SalesMarks, or wherever. If you are a blogger, feel free to publish this as a "guest post."

The comments confirm my thoughts in the original post. This is an important issue for all businesses, and sales can take a great leadership position. Within our companies, from the top down, we have great focus on intensifying and deepening our relationships with our customers. The motivation is clear, we want to sell more.

At the same time, the same organizations are putting the screws to their suppliers, tearing up contracts, making very tough--possibly unprofitable demands, and making survival of suppliers difficult. And the sales people for your suppliers are trying to do the same thing as you, they are tyring to establish deeper relationships with your organization.

If we force unrealistic, unprofitable conditions on our suppliers, they can no longer afford to to business with us. We may be left with those that can---and they may not be the best suppliers, you know the old story, "I'd hate to be the astronaut flying in a space vehicle assembled by the lowest price suppliers."

Now that I've teed the issue up, I have some questions:

1. As sales executives/professionals, are your company's actions to it's suppliers impacting your ability to sell and deliver quality products and services?
2. What are you/can you do to change this?
3. As a supplier, are you engaging the sales executives in your customers to help build deeper relationships?
4. Is this helping you achieve mutually beneficial results?

I'd love your feedback and anything you can do to broaden the discussion!

Delivering Happiness! Zappo's

Zappo's is one of the hottest and most innovative companies around. This is an inspirational presentations by Tony Hsieh, their CEO. There are important lessons in this for any business professional.

Zappos - Startup2Startup - 03-26-09

View more presentations from zappos.

If Your Suppliers Are In Trouble, Then You Are In Bigger Trouble!

I usually direct this blog to sales and business professionals, focusing many of the discussions on the "sell" side issues. For this post, however, I want to focus on the "buy side."

A few weeks ago in Moving Beyond Selling To Building Collaborative Relationships, I cited a PWC CEO Survey in which 71% of CEO's believed collaborative business relationships were critical with customers, yet only 40% felt these relationships were important for their suppliers?

Talk to any sales person and you will find they are being hammered in their negotiations. Talk to any business professional and they will complain about extended payment terms, returns, defaults, other things.

We're always able to talk about the great difficulty and challenges business face in working with customers, closing business, and developing true value based relationships. We seek understanding, trust and openness with our customers, so that we can sell them more stuff (I'm only being slightly sarcastic).

Yet, look at the other side of the organization, and we are treating our suppliers in the same manner. We are hammering them, making marginally tenable business deals. To respond, they are reducing service levels, may be reducing quality, reducing delivery commitments, doing everything they can to reduce their costs.

I am all for very tough negotiations and for seeking the most effectiveness and efficiency in the supply chain. But we have to recognize, if it's a bad (or even marginal) deal for our suppliers, ultimately, it will be a bad deal for us!

As a sales executive, this notion terrifies me---there goes much of the value and differentiation I provide my customers! My ability to compete plummets. As a business executive, this terrifies me, if we aren't able to design, develop, and build quality product and services, because our suppliers are reducing their service levels and commitments to us, how do we grow the business?

I am distressed by the lack of leadership and insight demonstrated by the respondents in the PWC CEO Survey/ Over 30% of the CEO's don't value their suppliers -- at least in terms of establishing close relationships! If they don't value this in the supply chain, how can they expect to develop these with their customers?

I think this is an area in which sales executives can provide some leadership within their own organization. The strength of your supply chain relationships is critical to your own growth and success.

Maybe I should end: "Do Unto Your Suppliers As You Would Have Your Customers Do Unto You."

Moving Beyond Selling To Building Collaborative Relationships

I'm reading Price Waterhouse Coopers 12th Annual Global CEO Survey. It has a lot of good information and I encourage you to read it. One issue that leaped out was the importance in the CEO's minds about the importance of building more collaborative strategies.

Some interesting data points:

• 57% of the CEO's agree or agreed strongly that collaborative business networks would be a defining organizational principle for business.
• 71% believed collaborative relationships are critical with customers and clients.
• About 40% believed collaborative relationships with supply chain partners was critical. (This is a disconcerting issue I will talk about later.)
  

We've always felt that developing close, collaborative relationships is critical to sales. However, to be successful in doing this requires a profound shift in the way we interact with our customers. Traditional approaches to selling will no longer be sufficient. Collaboration means a higher degree of interdependence between organizations. In partnering with our customers, we become important to each other's success and we can only be successful by working together. Partnering and collaboration demand loyalty, relationship integrity, and trust between partners.

Today, the term "partnering" is tossed around too casually by sales people and buyers alike. Rather than simply buying and selling, we talk about "partnering." Too much of the time, the focus, both by sales and buyers, is on "What's in it for me." The seller simply wants to close the deal and move on, the buyer simply wants to close the deal at the best price and move on.

Until we start looking at "What's in it for our partner," we will never be able to create real value in the partnership, and will have great difficulty in sustaining long term, loyal relationships.

I believe sales can offer a tremendous leadership in developing collaborative relationships with customers. It's interesting in the PWC survey to note CEO's have greater focus on these relationships with customers than they have with suppliers. Consequently, if we are going to develop these relationships, sales must take the initiatives.

True partnering demands a different mentality and different set of skills from sales people. I won't go into it in this post--it will be too long. I'll be glad to send you white papers, additionally, some of the thoughts are in a Selling Power article (July//August 2009) in which I am interviewed. However a good way to start thinking about developing successful collaborative relationships is to start thinking the following equation (sorry, I'm a physicist by training):

Translated, effective partnerships are a combination of : Shared Resources + Shared Risk + Shared Rewards + Shared Vision + Shared Values. Without a healthy balance of these factors, the relationship has a high risk of failing.

Collaboration and partnering---true partnering will become increasingly critical to sales. The CEO's have spoken, buyers will not drive this, so it is up to sales professionals to drive the development of these relationships.

Moving from traditional selling to true partnering requires new attitudes, skills, processes, and metrics. Sales professionals need to begin to understand these and develop the capabilities.

(For any of the materials I have referred to, please feel free to contact me at dabrock@excellenc.com, or call at +1-949-305-7146.)