The Channel Management Shuffle

  • Written By: Laura Faught
  • Published: December 23 2005


We've all been there at one time or another, in a crowded place or driving while holding a cell phone to our ear in a tight embrace—and why? Because the automated attendant on the other end of the line can not quite make out our "command" to her (or him?) ... usually because of the tiniest bit of background noise or maybe she or he is just having a bad day ... whether it's trying to book a flight, find out the status of a flight, or check the status of an order or place a new order, the frustration can be massive. The flight from Atlanta to Austin can be twisted into the flight from Atlanta to Boston, and incorrect information given out to the unsuspecting party or the maze of options, keys to press, frequent flyer, or shopper numbers to enter can be daunting. And, let's not forget the other frequent headache that many of us encounter daily—trying to return an item purchased online to the retail store ... only to be told "sorry, but we don't stock or accept that item here". And, how many times have you received an "invitation" in the mail to join a "frequent somebody" program that you are already a member of? And last, the age old nightmare of trying to get reliable tech support for that laptop or camera we recently purchased only to be put on hold (or bounced around to countless different "desks") for an extended period of time and when we do get a "live individual", they are fifteen time zones away and speak another language as their "mother tongue" with English as a distant second. A very distant second.

All is not negative, as some positive experiences do occur, but it seems that those are few and far between, and in many instances those positive experiences only occur after a very bad experience has occurred and only occur then as a means of "making it up to" the innocent consumer, thus not really even seeming positive.

We may all chuckle at the horror stories mentioned above, but it is no laughing matter. Especially when horror stories like the ones above cause a consumer to "tell all of their friends" or more importantly, to take their business else where. These experiences are all a direct result of decisions made every day by manufacturers, distributors, retailers, service providers, and technology providers. Executives and middle management are constantly faced with determining policy, process, and technology around managing one or multiple channels.

Forcing such decisions such as what or when to outsource in the channel, how many channels to have and what products to push through which channel, what skills and associated organizational models to put into place, what to spend on elaborate mailing and marketing campaigns, and what technologies to utilize to enable the plethora of channel management business processes—the channel management shuffle!! So, you may say "same old stories" regarding the ones mentioned above... but, you won't yawn and say "same old research" when you are finished reading the new report from Chainlink Research on channel management.

Areas critical to successful channel management:

The report explores a number of areas that are critical to successful channel management:

  1. "Dance with the one who brung ya'"... or channel conflict and multi-partner management—management of channels, minimization of conflict in and across channels, as well as management of multiple partners in and across channels. We will cover the strategies and decisions that a well known technology company is employing and facing moving from a totally direct channel to a mix of indirect and direct.

  2. "Save the last carton for me"... or inventory management and returns management—the user experience, returns, distribution challenges, and inventory management areas such as locating, managing, and allocating.

  3. "The Tennessee Waltz"... or channel management technologies—the underpinning solutions and technologies to support channel management business processes, as well as what is on the horizon of future plans and initiatives for these solutions. For these technologies and associated vendors, we will look at the delivery architecture options that are available, as well as key strategies that the vendors are employing to assure domain expertise throughout their technology or product lifecycle.

  4. "Do the Hokey Pokey"... or emerging best practices—for skill development and organizational models to ensure success in channel management.

All of these areas are viewed and analyzed through the Chainlink 3Pe "lens": Policy, Process, Performance, and Enablers.

Just a glimpse at some of the important conclusions drawn from the research and highlighted in the report:

  • You must start from the customer and work back to ensure a positive customer experience. Simply put, this means that when you are designing processes and policies, ensure that all are validated or tested from the customer experience perspective.

  • A value-based approach related to measuring and inducing partners in the channel is an emerging best practice. Meaning that, in order to determine how a partner is performing, other aspects beyond just sheer sales volume or revenue are considered. Such as quality (delivery and fulfillment) of performance, trained personnel, customer service practices and processes, etc.

  • Software vendors must provide solid domain expertise both during the sales cycle and during the implementation phase.

  • A shift of mindset is a must—the "old" mindset of policies, processes, and underpinning technologies that create a hand off to a channel partner versus the "new" mindset of policies, processes, and underpinning technologies that treat channel partners as an extension of your enterprise and thus creates holistic and total offerings for your customers.

So, why should you read this report? One word: risk. If you are responsible or involved in any way in managing or operating a channel(s) in your enterprise or for a customer, or providing an underpinning technology for managing channels, then this report is a must. Because the risk of facing the task of defining, managing, operating a channel, or providing a technical solution for a channel management activity without knowing about the hard-learned lessons contained in this report is far too great. So, read the report—and also watch the webinar replay. They may be the best dance lessons you can take before you embark on your own channel management shuffle!

This article is from Parallax View, ChainLink Research's on-line magazine, read by over 150,000 supply chain and IT professionals each month. Thought-provoking and actionable articles from ChainLink's analysts, top industry executives, researchers, and fellow practitioners. To view the entire magazine, click here.

ChainLink Research is a bold new supply chain research organization dedicated to helping executives improve business performance and competitiveness.

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