Who "Owns" Distribution Channel Performance?
Posted by John Panaccione on Thu, Feb 04, 2010 @ 02:45 PM
We are laser focused on channel management so not surprisingly we attend many meetings where the focus is on improving the performance of distribution channels. Each of the major functional disciplines from within the corporation are represented at these meetings by people with a share of the responsibility for channel performance. At these meetings we rarely find someone who really "owns" the performance of an indirect distribution channel, unless the CEO is in attendance!
Unlike direct sales the reality in the market is that indirect channel performance is usually a shared responsibility. With direct sales channels, it's pretty clear where the buck stops - usually with the VP of Sales. All the metrics associated with the direct sales force are the responsibility of the VP of Sales, and that is where the functional folks go when they need to engage with the sales force. Not so in an indirect channel where regional sales VPs typically have a goal number for their dealers or distributors without the authority to conduct or coordinate the other disciplines that are actively engaging with the channel.
Everyone else has goals tied to their functional discipline, not to the performance of the indirect channel. Marketing has plans for rolling out new products; training and operations manage the never-ending cycle for ramping up distribution partner new employees and for on-boarding new partners; IT is busy pushing systems out to partners and so it goes on. However, rarely do we see any single executive "owning" the collective performance of the indirect distribution channel.
Technology has evolved recently that allows product managers to more effectively manage the inputs from each discipline (IT, operations, training, marketing, etc.). All too often, channel partners have to access multiple IT systems - one for incentives, another for placing orders, another for concessions, another for training, etc. - just to represent a single manufacturer's product. For distribution partners that represent multiple brands, this complexity of systems grows exponentially with each additional brand they represent. Today, product managers who sell through indirect channel partners must make it easy for their partners to sell their product. The interface that channel partners have into these disciplines must be seamless and integrated.
In our experience, the marketing function typically finds itself coordinating the various inputs into the channel in order to achieve the firm's sales goal in the channel. Being a product manager for a product sold through an indirect channel in this kind of environment is akin to conducting an orchestra. You have many contributors to the end product. You need them all to perform well individually to deliver. More importantly, each individual performance needs to be synchronized by the conductor to create the collective performance - the music.
What product managers need is akin to the sheet music - a common, single systems that integrates best practices, workflows, and other sources of data and content from various disciplines that contribute to overall performance in such a way that the music sounds great. Our Performance Center product at LogicBay does just that.
John Panaccione