Recent data indicates that tradeshows have been on the decline for a number of years. Reasons for this vary but two are the economy and the newly emerging alternatives to tradeshows.

Now the downturn in the economy made corporations look at expense items and increase their cost cutting activities. Tradeshows were one of the areas that got hit very hard.   It is a very expensive activity when one considers the cost of the floor space, construction of the booth, staffing ( lodging and travel), entertainment, pre and post advertising, lead generation programs, professional hawkers, video production, specialized collateral, give a ways, etc., etc.  And let’s not forgot the potential attendees. They too work for corporations, and their management is doing the same cost cutting activities…getting approval to go to tradeshows is becoming very difficult.

Second, tradeshows in most cases (there are always the exceptions where certain industries, tradeshows are doing fairly well) have become alumni reunions or a chance to pass your resume on to your competitor.   At one recent tradeshow that I attended, I would conservatively estimate that the ratio of potential buyers to vendors was one to twenty! 

The economy probably put focus on the cost versus returns on investment metric for tradeshows, but I think the real negative impact on tradeshows is coming from the increasing alternatives now available.

Some of the byproducts of the Internet relative to tradeshows are seminars, webinars, podcasts, virtual tradeshows, web sites, blogging, user’s groups and live video demonstrations.

The first step for many corporations was to not withdraw from being at a tradeshow, but to cut back on the size and the amount spent, augmenting the shows with some of the above mentioned activities.

This way, there was presence at the show so no one would think they were going out of business and by physically participating some lead generation could be realized and/or a product/service introduction  could be made if it was appropriate.

As the stigma of not attending a tradeshow has decreased, corporations are shifting more to events like seminars, virtual tradeshows and other alternatives. 

So as I have always stated, there are choices and now, more than ever, there are numerous alternatives to tradeshows.

Here are some suggestions on selecting where you might spend your marketing dollars when it comes to tradeshows.

1-      Look at the tradeshows past attendance record, mix, and profile to see how closely it matches your customer profile.

2-      Which one of your competitors, partners or major clients are attending the shows you are considering?

3-      Are you planning on having a major announcement (product, service, technology or partnership) that would generate increased awareness or people to come to your booth?

4-      Will the blend of items like webinars and targeted email campaign deliver a better return on investment (leads/dollars spent) then one tradeshow?

5-      If a tradeshow does make sense, maybe consider “partial” involvement (fewer days, or smaller booth, etc.) and augment the show with a pre or post email campaign.

6-      Consider outsourcing the tradeshow activity to reduce some of the cost and time involvement.

7-      Consider attending the tradeshow as a speaker, with an “off-floor” presence to meet current and potential customers and partners.

8-      Do a complete ROI and potential sales impact on whatever marketing mix scenario you are considering.

See you at the next virtual trade show!

RHL 9/1/10

Note: this article is focused on business to business not business to consumer (spending on items like advertising and promotions are usually greater in the consumer market).

Sales People One primary communication method in the B2B world has been the sales person and their personnel selling efforts, but this method is not only very expensive but does not scale well. Suggest augmenting this with other communication tools.

Advertising’s primary contributions are to provide awareness and provide creditability for the vendor (if you do not believe me, seen all the Toyota ads lately!). It has been proven that sales and profits are better with advertising then no advertising at all. So make sure your advertising first supports the overall marketing strategy and is integrated with other marketing activities. Lastly, if you do use advertising, make sure it will pass the “threshold” of awareness. Too often marketing managers start an ad campaign and don’t run it long enough to create awareness and thus those dollars were completely wasted. So if you don’t have enough in the budget to be successful, utilize the money somewhere else.

Direct mail or email campaigns:  Direct mail is good for promotions, supporting sales activities, and communication to your various channels. Emails can address the same issues with the added benefit of having a quick response or the ability to receive a request or answer a question in a very timely manner.  Again like advertising, one shot will NOT accomplish your goals, you need to contact with your targeted audience via multiple mailings.

Trade shows: Good place for a product or service introduction, speaking engagements, leads, and face to face with potential buyers. But given that, I believe trades how are actually on the decline, so I would highly recommend analyzing the benefits of being at a trade show versus its overall costs.

Seminars/Webinars:  A relatively inexpensive tools, especially if your goal is awareness, thought leadership or demonstrating a customer application.  You can have a “captured” audience and have follow ups with them.

Catalogs:  Are basically dying if not already dead, mainly because of the web and its ability to show products and services in a more robust manner, Web catalogs are less expensive and they can reach a far greater audience.

Social Media (Blogging, twitter, etc.) The use of these media by enterprises is growing every day.  Their primary purposes are for awareness, thought leadership, lead generation and getting feedback from the community. I would recommend as a minimum that enterprises at least “listen” to what your customers are saying about you and your products.

So, again, it is not how much one has, we are all painfully aware of that, but what the appropriate mix is.  You need to balance your marketing communication methods to optimize your returns.   This mix selection will vary depending on what phase your enterprise is current in and your overall goals.  A start-up might use the social media tools to generate awareness and creditability, while an established enterprise might rely on its sales team along with some direct/emails and seminars.

In any case I would suggest testing your mix on a selected sub segment and analyze the results and make any adjustments before going with the full programs.

RHL 8/24/10

A guest post by Craig James,  a leader in the use of social networks in generating sales.

By now, most of us have dabbled in one or more forms of social media, with varying degrees of gusto, and different degrees of success. In fact, many of us aren’t sure what “success” means; we’re still unsure of the merits of social media, or how to take full advantage of what’s available. Frankly, it can be overwhelming.

However, it can’t be denied that social media—Linkedin in particular—can help you generate more revenue. LinkedIn, unlike sites such as Facebook and MySpace, tends to attract people who want to develop business relationships, as opposed to friendships. But while many of us are familiar with the basic features of LinkedIn, we don’t always know how to best leverage them to drive sales. And because LinkedIn and its members rightfully frown upon solicitations for business (pitches), many have discounted its value as a useful sales tool. In fact, LinkedIn provides a multitude of ways for you to both develop and nurture relationships, which can lead directly to sales opportunities, and allows you to position yourself as a thought leader and a valuable resource who prospects will come to, without your having to “sell” them.

Get and give recommendations
What impression do you suppose a prospect will have after reading glowing endorsements about you from former coworkers, bosses, and, especially, clients? While they may suspect those clients likely did not volunteer to write those recommendations, they also know that clients would not agree to do so if they did not feel comfortable legitimately endorsing you. What’s the most tactful way to get a recommendation? Write one for someone else. Doing so accomplishes three things: one, it clearly flatters the person you write it for; two, it helps him or her look better to people viewing his or her profile; and three, it creates a desire to reciprocate.

Conduct Polls
People like giving their opinion about issues that are relevant or important to them. Every so often (once a quarter or so) use LinkedIn’s polling feature to take a poll. Your name appears (once again), reminding your connections you’re out there, and in so doing, keeping you top of mind. While having participated in a poll is not in and of itself likely to get someone in your network to buy what you’re selling, when combined with all your other LinkedIn activities, it will increase the likelihood you’ll be contacted when a need does arise for what you sell.

Read news
Each group has a news section that contains news articles other members post, and increasingly, blog entries. You never know what interesting tidbit you might come across that the difficult-to-reach prospect would appreciate receiving (and reward you for sending with a return call).

Contribute to discussions
Adding your experienced-based comments to existing discussions in the groups to which your clients and prospects belong is an unobtrusive, but powerful, way to demonstrate your thought leadership and your willingness and ability to provide value.

For example, I contributed to a discussion in one of the Mergers and Acquisitions groups. The very next day, I received an email from a boutique M&A firm on Long Island saying they “would like to learn more about [my] firm and services as they may be beneficial to [his] prospects and client base.”

Post documents, presentations, share what you’re reading
While you may not sell people on LinkedIn, your marketing material may. Use LinkedIn Applications such as SlideShare Presentations, Google Presentations, Box. net Files, and Reading List to passively communicate about your company and yourself. I’ve used this to post my standard sales presentation, which promotes what I offer, and a couple of books I’ve read and recommend. This helps others get to know me better as a person, effectively building my personal brand. Others use it to establish thought leadership by posting white papers their firms have authored.

In addition to these ideas, there are a few I’d like to share courtesy of a fellow business owner. David Leaver of Opus Partners recommends that his clients identify some trigger events—events that, when they occur, will create a need for a product one sells—among the weekly updates mentioned above. For Leaver, who provides sales training services, one trigger is when a VP of Sales changes jobs, since often times, he or she will want to bring in a sales consultant to evaluate the staff being inherited.

Better Targeting
Premium LinkedIn users have a host of additional benefits that are beyond the scope of this article. One that I’ve found extremely valuable is the ability to search for contacts using premium-only demographic criteria, such as company size, function, and seniority level. This provides me with a reduced, and more targeted, list of prospects, enabling me to zero in on the exact person or persons I want to reach, in the size of organization I want. I can then send a custom, targeted message to those prospects via InMail, or, if I don’t have a premium account, via a connection.

As we have seen, there are a plethora of easy-to-use tools available to you on LinkedIn that can help you improve your sales results. Start by picking one or two, and use them for about a week, until they become second nature. (Nigel Edelshain of Sales 2.0 disciplines himself to devote 15 to 30 minutes each and every day.) Then, gradually start using the rest of the features presented here, until you find yourself becoming a bona fide LinkedIn maestro.

Resources

• Three Ways to Link Your Company to LinkedIn
• Control Social Media Mayhem
• What I Learned About Link Backs

Author Information:

Craig James is the founder of Sales Solutions, a sales productivity improvement business located in suburban Boston. He can be reached toll-free at 877-862-8631, or by e-mail at craig@sales-solutions.biz.

 1-     Understand the goals and go to market (GTM) strategy for the enterprise and /or the SBU (Strategic Business Unit).  Example: is it “price skimming” – entering the market with a high price with the intent to capture a piece of the market and drive revenues, or penetration, initially pricing low to gain volume/market share or attack the competition?

2-     What is the financial pricing philosophy?  Is it cost plus (internal costs plus some factor to get to a selling price) or is the objective to have a certain margin (price minus cost).  While I am not a fan of “cost plus” because it does not consider what I call the “surrounds” (buyers value, market advantages, competition, economic factors, etc.), it is critical to know ALL the costs that go into a product/service.  There are the fixed product costs (material, labor), possession costs (storage, transportation) and user costs (installation, training), as well as the variable costs (marketing, distribution, corporate overhead, etc.)

3-     What is the competitive situation?  Do your competitors have the equivalent product and equivalent features? While this is important, I feel what is more important is a view of the competitor.  What is the competitors’ goals and strategy, what is their GTM strategy, what do their financials look like? What market segments is the competitor focusing on?  How will the competition react to your product introduction? All of this can have a major impact on pricing your product.  An example would be, if the competitor has little margin, then pricing your product just below his could lead to capturing his market share. One last comment, whatever you do, do NOT get into a pricing war. These usually lead to both parties losing.

4-     As I have repeatedly stated before, know the customer (enterprise in this case). Is there a demand in the segment(s), and if so, the value(s) might be different for each segment.  Is there a major void with no current solution?  What value-added benefits might the enterprise see from this product introduction? The benefit can be a unique or new feature, it can come from an operational feature such as reliability or quality; it can be from a financial factor like total cost, or even from a buyer department guideline, i.e., providing minimum risks or outstanding support.  If an enterprise sees benefits and value (value is quality relative to some price), then your price can have a premium over the competition.

5-     Does the product or service have a unique feature that the competition does not have or the market does not know about yet? If so you have a price advantage!

6-     Is there a service that must be attached to the product?   A strategy might be to lower the product price and recoup profits from the service.  This is especially a good approach if you “control” the service and the enterprise sees value in the service.

 7-     What impact will this product introduction and its price have on your other products?  Will this new product’s price and features replace another one or negatively impact your current revenue stream?

8-     Channel considerations: who will sell the product?  If it is your own sales force, then you may have some margin movement.  If it is a reseller, they will usually want some form of discount from list, and thus the margin (therefore the price) has to be such that you and the reseller both make a profit.

9-     Legal consideration:  there are laws regarding price setting and discounting. For example the Robinson – Patman Act addresses unlawful price discrimination, requiring the seller to take into pricing into account when there will be multiple channels re-selling the product.

10- Lastly, once you have launched the product, monitor the situation in the field to see if adjustments need to be made.

 Like any guide there are risks in general statements, but the recipe is usually the same, it is the ingredients that vary. So adjust each step relative to your product. Start with a well thought out strategy, decide on a pricing strategy that supports your enterprise’s goals and objectives. Know your competition, and know the channel(s) and their characteristics.  Truly understand the benefits of the product/service and their related values for both the buying enterprise and their end users.  Most importantly, understand that pricing is NOT a standalone task, but a multi dimensional – interrelated function.

 In today’s tough economic times are your prices being forced down by cut-throat competition?  Do you know how to escape from a price war?

 RHL    4/6/10

Until recently sales leads were generated by buying “lists” and sending out letters, holding “meet and greet” events in local areas, exhibiting at trade shows, placing bingo cards in trade publications and advertising.  In 2010 that has all changed.

Below is a representation of what was and what is happening today:

Lists are still being bought, but they can be purchased in much more granular fashion for targeted campaigns.  Leads generated from Google and Facebook ads, Webinars and other “opt-in” tools are much more valuable as they are already self-selected, perhaps better leads those generated at  “meet and greets,” as no food or drink is involved.

This change puts an emphasis on having a top-tier web site, easily navigable, with literature and “freemiums,” that can be easily downloaded,or information/tutorials that can be found on places like YouTube or BrainShark.  Buyers today are going to the web, your site and other areas, searching based on key words, evaluating companies based on what they find, selecting the 2-3 that are well presented and inviting them in for a final presentation.  In some cases they know more about the technical aspects of the product than the salesperson.

Have you looked at your allocation of Marketing dollars for 2010?  Do they correspond to today’s environment?  Are you using an obsolete marketing mix to reach your target market(s)?

RHM  3/5/2010

 Five major indirect channel misconceptions:

 1-      Partners, resellers, etc. are all alike. Nothing could be further from the truth! The major impression is that most indirect channels carry vendor’s products, do some form of telemarketing and just take orders. In reality resellers come in thousands of kinds and types.  From pure distributors, to value added resellers, to system integrators.  Many resellers not only know the products and/or services better then the vendor; they usually have very knowledgeable sales people with solid long-lasting relationships with their customers.

 2-      The indirect channel is only interested in pricing for products and /or services. While everyone is in business to make a profit; the indirect channel is equally interested in areas such as marketing programs, territory alignment, training, technical support and LEADS!  And like all good businessmen, they recognize the positive nature of continuing relationships with key customers.

 3-      Your channel programs can be applied to all resellers/partners equally.  If you believe this then you are in for some very rough times with your resellers. Again resellers come in different forms. Some are product oriented, others specialize in services, while others focus on certain type of industry applications.  Therefore one needs to tune each program   for each different type of partner (reseller, distributor, etc.).

 4-      Indirect channel partners only know how to sell. Just like myth number 2, channel partners can and do have many capabilities. Again usually each has one or two major strength capabilities, so make sure you know what they are when selecting a indirect channel partner such that their strengths matches with your distribution strategy.

 5-      Indirect channels do not need much care and feeding after the initial start up. This is like the myth of the direct sales force that “loves them and then leaves them” but coming from the other direction.  Probably the worst thing you can do is to ignore your indirect channel. Take this approach and see how long your partners last with you. Make sure you have sales people who know how to manage and support your indirect channel.  The most successful companies have channel partners who have been with them for years.

 In summary, noting that the indirect channels are actually more complicated then the direct channel, one should make absolutely certain that the partners/resellers you select match your strategy. Next, depending on why you selected the appropriate partner, make sure that your partner programs meet your and your partner’s needs. Lastly make it a partnership relationship not just a business relationship!

  Have you thanked your channel partners today?

RHL 01/12/10

On the second day of sales, marketing gave to me two value propositions and an outstanding brand!

On the third day of sales, marketing gave to me, three new market segments, two value propositions and an outstanding brand!

On the fourth day of sales, marketing gave to me, four campaigns for the year, three new market segments, two value propositions and an outstanding brand!

On the fifth day of sales, marketing gave to me, five new social networking medias, four campaigns for the year, three new market segments, two value propositions and an outstanding brand!

On the sixth day of sales, marketing gave to me, six product introductions, five new social networking medias,…

On the seventh day of sales, marketing gave to me, seven testimonials, six product introductions, five new …… 

On the eighth day of sales, marketing gave to me, eight email campaigns, seven testimonials, …….

On the ninth day of sales, marketing gave to me, nine blogs per week, eight emails campaigns,….

On the tenth day of sales, marketing gave to me, ten case studies, nine blogs,…..

On the eleventh day of sales, marketing gave to me, eleven new pieces of collateral, ten case studies,…..

On the twelfth day of sales, marketing gave to me one hundred and twenty thousands leads, eleven new pieces of collateral, ten case studies,……….

What are you giving to sales this season??

RHL 12/22/09

site is performing, there are a number of tools that can address this need.  A popular data-gathering tool is Google Analytics (www.google.com/analytics/).  While it may not be the most extensive, I would recommend it for two main reasons; one, it covers a good range of statistics for those who are just starting in this area and second, it is free (not bad considering today’s economy).

The following are some initial guidelines in getting started and tracking some of the critical variables.       

 1- Tracking Code: To collect any data for review you must first install on your web site what Google calls its tracking code.  After signing on to Google Analytics go to overview and click on Edit and then click on status.  It will show you a copy of the tracking code and explain where to paste the code into your web site.  Once you have installed the tracking code, wait at least 24 hours for Google to provide some initial data.  After waiting, sign in to Google Analytics and click on view report.  You are now ready to starting analyzing your web site’s performance.

 2-Bounce and Exit Rates:   After clicking on view report, look on the left side of the page, click on content and then top content, scroll down to see the details.  You will see bounce rates and percent exits.  Bounce rate tells you that for this particular page the viewer came and left just that page.  If you have too many high bounce rates, you might want to reconsider the contents of these pages.  Exit rates tell you that the visitor left your site via this page.  Again, like the bounce rate, if you have many exit pages, you might want to change the content of these pages or the linkages.

 3-Keywords: Go and click on traffic sources and drop down to keywords.  This page will give you an idea of which keywords are driving clients to your web site.  You may want to modify some keywords if you are not seeing the results that you are want.

 4-Landing pages: Click on Content and then Top Landing Pages.  Landing pages are the pages on how visitors got to your web site.  It is important that these landing pages have viewers go to other pages or stay on these pages.  Again, if the data shows otherwise, you might want to modify the content and/or insert an offer or put a call to action on these pages.

 5- Average time on page: Click on Content and then Content by Title.  Average time tells you how long a visitor is on each page.  This is an important piece of data because it tells you if the viewer is just “passing though” or is actually reading the content of the various pages.  Again, if the average time is low on certain pages, you might want to modify them.

 6- Goals: Google Analytics provides you with the capability of setting up four (4) goals.  By creating goals, you can see if activities like campaigns, emails or promotions are meeting your targets.  To setup your goals click on view report and then Edit.  Scroll down to the goal section where you can name the goals, select types and input a value for each goal.

 Well these are just some of the basics in getting started with Google Analytics.

Regardless of which data collection tool you choose, pick one and start gathering so you can see if you are meeting your goals and how your web site is performing.

 If you have any questions or issues with Google Analytics drop me a note and I will get back to you.  Until next time, turn that data into information!

 RHL  11/ 05/09

Last time we discussed the scenario of a direct sales channel and switching or adding an indirect channel. The key issues were: a complete strategy, reseller selection and a reseller program(s). This posting is about adding a Direct Marketing function. Again, like the last discussion, make sure you have a sales strategy or that your sales strategy is updated. We will also assume the strategy is valid.

Here are five key considerations for a direct sales channel planning on switching to or adding a direct marketing channel.

1-Product selection for direct marketing

Do the products within your portfolio meet the following criteria?
- Are the products straight forward and well understood by the market place?
- Are the products fairly standalone (no real services required)
- Do you have a timely distribution system (infrastructure) in place (turn around will be critical)?
- Does your infrastructure support multiple SKDs, as well as tracking and ordering online?

If your answers are yes to at least 2 or 3 of the four then continue. If you answer NO to most of the above, going direct marketing is not out of the question but you need to address the action items below.

Action items
-You will need to augment the product with very compelling features and benefits.
-Create or partner for a rapid/ quick turn around product distribution system.
-Develop your web site so that it handles the complete cycle for transaction activities.
-Begins staffing for customer calls, for those who don’t want to order over the web, those that have difficulty and those who have product problems upon receipt or under warranty.

2- Marketing methods and tool selection

Perform an analysis on which media you will use and what mix:
-Analyze how integrated and automated your marketing programs are, procedures and rules are (considering cycle times to be competitive, automation and responsiveness is critical)
-Telemarketing methods need multiple scripts and an installed follow-up system.
-Investigate what tracking tools you will use.
-Do you have compelling value propositions that will catch your potential customer’s attention?
-What is the best mix of traditional marketing (ads, telemarketing, etc.) versus email, blogging, face book, and twittering is appropriate for your targeted audience?
-Is your data base set up for all of the selected activities?
-Is your web site geared for transactions, and interactions?

Action Items
-Start monitoring what is being said about your company and your products.
-Do an ROI on the media mix and potential revenue per media.
-Do you have the budget and appropriate resources for social media methods (blogging, twitter, tracking, etc?) and skill sets?
-Develop or modify your customer database so it is integrated, complete, and flexible so that you have a closed loop marketing (customer- sales- marketing- back to customers) capability.
-Develop a metric/measurement system for the direct marketing (example, all programs must have an ROI target).

3- Marketing programs

You should have a series of marketing campaign well thought out ahead of time (multiple touches and offers will be required in order to develop a reasonable funnel).
-What will be the offers?
-How will the campaigns be linked (themes, or offers or audiences as examples)
-Do you have marketing “packages” oriented for each targeted audience or and campaigns?
-
Action Items
-Perform market testing for the campaigns and packages
-Develop some give-away within your web site such as white papers, free ipod, webinars, etc.
-Financials- prepare a complete forecast analysis to understand realistic revenue targets, realistic costs and thus true margins and ROI per campaigns.

4- Financials

Direct marketing will have a startup operating costs just like a product introduction, but the difference will be in the media methods, tools and the skills required in performing this closed loop marketing. So, just like the indirect model case build a complete business model with attention on the following areas:
-Data base organization and analysis
-CRM/SAP type applications
-Web information analytics
-Creative offers
-Web 2.0 type dynamics
-Skills sets required

Action Items
-Related to action item in 3- develop a complete business case.
-Have measurements and timelines with key milestones to determine progress.

5- Cultural Environment

Since direct marketing is under going some dynamic changes, new functions/ procedures need to be introduced into your enterprise. Management also needs to understand that some of these tools/methods are new and thus more of an art than pure science, so be flexible, and prepare for changes along the way. What will be your policy regarding twitting and face book both internally and externally (see our blogs regarding social networking (www.firealarmmarketing.com/blog/))? You also need to consider the value of marketing of brands versus your own internal content marketing.

Action Items

-Educate management and key people involved on the nuances of direct marketing.
-Develop policies and procedures for the various tools and methods of direct marketing

Well, as you can see, Direct Marketing, like other forms of distribution must have a strategy, but differ in that you will probably need new tools and skills to be successful. Overall, you probably will end up with a mix of media marketing with the biggest issue what percentage of each will result in the best return on your investment.

We have looked at different channels of distribution, some guidelines for switching or adding other channels. The keys overall are having a strategy, knowing what the selected channel can actually do for you and having the appropriate programs and tools to be successful.

So, what are you waiting for, get busy and start that channel(s) and start selling!!!!

RHL 10/20/09

This is the seventh in a series regarding Sales Channels

One reader, who felt that the scorecard was a good guideline in defining the appropriate channels for many enterprises, wanted some insight on what should be considered in changing/ adding another channel, as her current channel is underperforming.  Well when the reader asks, we deliver, so let’s start with the following scenario of a company having direct sales only and wanting to add an indirect channel.

Again, make sure you have a sales strategy or that your sales strategy is updated.  Many times enterprises are locked into a strategy and don’t realize they have changed, the environment has changed or both have changed and thus the strategy is no longer valid.  But let’s assume your sales strategy is still valid;  here are five key considerations for switching or adding an indirect channel of distribution.

1-Product selection for the potential resellers

Do the products within your portfolio meet the following criteria?

            - Have margin-sharing room?

- Not complex, lending themselves to easy (low cost) training?

- Fit within distributors/resellers portfolios?

- Minimal conflict with the products the direct sales team carries?

- Does your infrastructure support SKDs, tracking and ordering for the resellers?

If your answers are yes to at least 3 or 4 of the five then continue.  If you answer NO to most of the above, going indirect is not out of the question but more difficult.  You will need to implement the following actions items:

Action items

-You will need to compensate for the product issues by excelling on other reseller program components

-Consider repackaging some of the products or adding services to the products that are oriented just to the resellers.

-Consider resellers who could use your products to complete their portfolio and thus will be less demanding on issue such as discounts.

2- Reseller segmentation

Perform an analysis on potential resellers and see who meets these criteria:

-Are they capable of selling the selected products ?

                -Do they have the necessary infrastructure to support these products?

-Can you segment resellers to minimize conflict with other resellers and your direct sales force?  Segments can be by geography, customers or products as

 examples.

-Do the selected resellers have compelling value propositions that support your selected products?

-Do you have compelling value propositions that will motivate the reseller to sell your products?

If you cannot segment the reseller so that there is minimum conflict, then I would say this is a major issue and indirect channel will be a struggle.

Action Items

            -Segment so that there is no or minimum overlap with your direct sales force

            -Develop specific value propositions for the resellers and for their end users

3- Reseller program

Again, assuming your strategy is still sound, then it is mandatory to have a well thought- out reseller program.  As a minimum you must have the following:

-Some type of “classification” of reseller types. i.e. sliver, gold, which outlines their objectives, revenues targets, products they will handle, etc.

-For selected products, what type of support you will provide

-Discount or points off the structured program (note: if you have low margins or your discounts would cause negative margins, then like the product packaging, look at bundling with the resellers products or bundling other product or services to improve the margins and value propositions.)

-A mutually agreed upon measurement system that covers items like sales, customer satisfaction, training and leads

-Certification programs (can be optional)

-Reseller agreements

-What joint marketing will be available to the resellers

-Well defined rules of engagement for the resellers and your direct sales force.

-Financials- prepare a complete forecast analysis to understand realistic revenue targets, realistic costs and thus true margins.

If you have not developed these elements or can not have a “best-in-class” reseller program (especially the financials, classification and measurements), then I would highly caution that going into indirect distribution, as this will not be a successful venture.

Action Items

            -Develop an indirect program and test/review it with potential resellers

            -Build a complete business case that supports resellers AND your sales force

            -Educate ahead of time the sales force about the pending channel change

4- Financials

Going indirect will have a startup costs just like a product introduction, but what differs is that there are specific activities in dealing with resellers and that most people underestimate these startup costs.  So, build a complete business case just like one would do for any product introduction; but pay special attention to the following areas.

-         Joint marketing cost with the reseller(s) ( events, travel, promotions, incentives, sales support, etc)

-         You will need a portion of your current sales force or new hires to focus on the resellers

-         The revenue sharing plan must consider the direct sales force and the reseller needs

-         Support to the resellers ( training, collateral, demos, programs, technical backup, returns, trouble shooting, customer engagements, etc)

-          

Action Items

            -Related to action item in 3- develop a complete business case.

            -Have measurements and timeline with key milestones to determine progress.

5- Cultural Environment

Here is one area that is either overlooked or becomes a stumbling block in many companies.  What I am talking about is the overall attitude about resellers, starting with the company’s management and moving on through the organization.  The old adage, action speaks louder than words, is applicable here, and both have a major impact to the success of the new relationship(s).  If people within your organization say and do things differently internally  than they do externally regarding resellers, the word gets out quickly and before you know it your resellers are abandoning ship or worse, not letting you know how they actually feel.

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Action Items

-Educate management and key people involved in this transition on the reseller world and what the relationships are, what should be expected and why we are doing this in the first place.

-Develop roles and responsibilities for key executives regarding reseller’s involvement and support.

In conclusion, one can see that adding or converting to another channel is not just looking at which products to distribute, but require execution of what I call the “surround components” which are the real keys for entering into the indirect channel world.

Next time we will discuss direct sales and converting or adding direct marketing.  Till then, happy selling

RHL 9/24/09