As B2B organizations rush new products to market, failing to carefully plan a channel strategy is a common mistake. Often the biggest challenge with a new offering is forging a cross-functional alliance across the enterprise that includes channel interests earlier in the process.
As B2B organizations rush new products to market, failing to carefully plan a channel strategy is a common mistake. Often the biggest challenge with a new offering is forging a cross-functional alliance across the enterprise that includes channel interests earlier in the process. Unfortunately, many companies base their channel launch strategies on what works for the direct sales force — only to discover after the fact that they need to retool their plans post-launch to reflect partner-specific needs. Today, we’re seeing more channel teams seeking an invitation to the exclusive “product marketing table” where product-specific strategy and launch decisions are made.
It’s crucial to establish formal alignment during launch planning to ensure a channel strategy is developed and agreed upon. Specific channel conversations must take place at this critical stage. Channel marketing must provide insight on what makes partners tick rather than leaving product teams to base channel strategy on incorrect assumptions. This channel/product marketing alignment should pinpoint a new offering’s best routes to market (e.g. ISVs, resellers, system integrators, retailers, consultants) and ensure that the strategy delivers a well-formed readiness and go-to-market plan. SiriusDecisions has identified three areas of alignment that must be addressed to develop channel business propositions and ensure channel readiness:
- Channel product alignment. Clearly define what market segments will be targeted by partners; then, within those segments, determine the distribution strategy – who should be selling what and where. Additionally, strong and verifiable evidence should be provided showing how this new product stacks up against its competition and demonstrating why it’s the best option for the partner to sell and the end-user to buy.
- Channel sales alignment. Working together, product marketing and channel marketing should determine what the net margin will be for partners on the new offering and whether additional supplier products can be attached or complementary services added by the partner to increase the deal size. This teamwork should extend to identifying what channel competencies will be required to effectively address the needs of target markets – and determining whether current training courses provide sufficient coverage or new training paths/competency levels are necessary.
- Channel marketing alignment. Partners sell and support what they know, so building awareness for new offerings is critical. Our data indicates that successful channel organizations spend up to one-third of their budgets on marketing to partners. Channel marketing should educate partners through business value propositions, while at the same time extending a joint (supplier/partner) value proposition through the partner to customers. Driving demand for partners is key to creating a successful launch for a new product. Most suppliers create programs for new products for partners to execute themselves, then layer incentives and funding to entice and support partners as part of a lead generation strategy.
Aligning channel and product marketing in the development of a product channel strategy bridges a significant gap that exists for some organizations. Addressing partner-specific needs is vital to create a clear and compelling business proposition for channel partners and answer the inevitable (often first) question from partners: “What’s in it for me?” Having a strong answer to this question will accelerate adoption and get more partners onboard faster with a supplier’s launch of a new product.
While getting a seat at the product marketing table may seem as elusive as the Holy Grail to some, maybe King Arthur had it right when he dreamed up the Round Table — a table built to ensure that all of his knights were positioned equally. For B2B organizations whose sales model includes a portion of their business going through partners, getting the channel a seat at the table is the ideal scenario for developing a new product channel strategy. Leading channel organizations have found that specifically addressing channel interests early in the product launch process, and establishing interlock between product marketing and channel marketing, can make the difference between success or failure when delivering products through the channel. Sounds like the Holy Grail to me!