Channel partners are becoming integral components in many businesses distribution strategies. So what can you do to ensure these prove to be effective?
The complexity of today's operating environment has meant a lot of businesses are relying on channel partners to distribute and promote their products. When these relationships are strong, they can offer numerous benefits and competitive advantages. If not, they can be a drain on cash flow and ultimately erode your brand.
So here are three tips for improving relationships with channel partners so that your network of retailers and distributors are defenders of your brand, rather than defectors.
1. Facilitate upward and downward information flow
An effective supply chain is just as concerned with the downward flow of goods as it is the upward flow of information.
They run into problems when each channel partner is only concerned with those whom they deal with directly. However, if there is a shortage right at the beginning of the supply chain, and wholesalers, distributors and retailers further down are not aware of this, the effect will be exaggerated through each link, causing massive under- and over-supply issues.
The ultimate solution is a fully centralised supply chain, however, this is not realistic for many operators. Even so, encouraging the upward and downward flow of information beyond direct relationships reduces the likelihood of supply and demand issues, creating greater reliability, and in effect, satisfaction and channel loyalty.
2. Collaborate to add value to both of your offerings
In centralised supply chains, decisions are made in regards to all channel partners. This makes collaboration both essential and natural. Without this overarching mission control, working with channel partners outside of contractual obligations can still be beneficial.
A strategic partnership is far more resilient than a transactional relationship born from mere necessity.
However, for collaboration to be effective, channel partners need to share the same goals. Only with this alignment can a mutually beneficial strategy form. In these instances, both parties will benefit from higher levels of productivity, profitability, and engagement. Furthermore, a strategic partnership such as this is far more resilient than a transactional relationship born from mere necessity.
3. Use rewards programmes to foster commitment
Rewards programmes are incredibly effective at procuring loyal channel partnerships. In fact, a research project conducted in 2013 found that 81 per cent of channel reps had stronger relationships with vendors that offered rewards. Not only this, but the survey found that a resounding two-thirds of sales were actually incentivised by rewards, with 77 per cent of respondents stating channel incentive programmes were instrumental in the amount of time and effort they put into promoting and selling the vendor's products.
Ultimately, effective channel partnerships are built on timely communication and mutual benefits. Thus, creating a rewards programme that delivers value to you and your channel partners and facilitates collaboration can have a profound impact on your bottom-line.
For more information or advice, talk to the experts at Power2Motivate today.