How Manufacturers Can Be Smart About Their Channel Engagement Strategy

According to the global market research company Forrester, close to 70% of more than 10,000 buyers reported having purchased offerings through an indirect party or channel partner: the distributors, dealers, resellers, contractors, retailers, medical practices, agents, and other representatives who introduce products to the market.

For this reason, smart manufacturers spend a lot of time thinking about engaging channel partners.

According to research by the Incentive Federation, manufacturers most often implement channel programs to improve productivity and increase sales. But for organizations that have recently experienced growth and are just starting to think about channel engagement, getting a program off the ground can be daunting.

Here are three best practices for manufacturers to consider when drafting channel engagement strategies:

  • Think broader than just sales. Many engagement programs fall into what we call the “single behavior trap,” wherein they focus solely on incentivizing channel partners to meet or exceed sales quotas. This is a short-term approach that prioritizes immediate gains (increased revenue) over enduring ones (long-term, loyal relationships).

    Industry professionals have advocated for taking the long view instead: Forrester, for instance, contends that “optimizing channel incentives around changes in behavior as opposed to rewarding existing habits is also important to drive channel loyalty.”

    In other words, manufacturers should use incentives to drive behaviors that contribute to the big-picture objective of generating loyal and mutually satisfactory relationships between manufacturers and their channel partners. These behaviors include ongoing training and the usage of marketing materials produced and distributed by the manufacturer.

  • Segment and personalize. Avoid crafting a single strategy for all partners, or, for that matter, trying to stimulate each one with the same incentive. Recognize that each channel partner is unique, with its own abilities and shortcomings.

    Start by asking yourself what each partner needs to do to help your organization meet its business goals. Only then can you identify individual behaviors worth promoting.

    For example, retail salespeople are charged with recommending products at the time of purchase. To boost their sales activities, manufacturers might offer training around product differentials and technical features. That way, salespeople can make recommendations with confidence and effectively respond to customer queries.

  • Make brand compliance simple. Many manufacturers worry about channel partners misrepresenting their products, either by claiming they have nonexistent features or by failing to mention new capabilities. That’s a real concern for manufacturers, who run the risk of losing customers due to these selling errors.

    To mitigate this risk, manufacturers would benefit from disseminating marketing materials that enumerate updated product information and key selling points. With a centralized platform, these can be easily distributed — and consumption of these materials can be rewarded.

Leading manufacturers recognize the importance of their channel partner relationships and work to cultivate them. Fielo makes it simple to develop and activate loyalty and incentive programs that translate into powerful competitive advantages. 

Interested in learning more? Reach out to take a closer look at Fielo today.