Channel Marketing

The Channel: Your Biggest Ally

Channel marketing is at the center of many B2B strategies. And for good reason. For companies that go to market through some sort of channel (dealers, distributors, wholesalers, independent agents), having well-informed, engaged, and inspired channel partners will contribute greatly to their success.

The bulk of channel marketing happens in the B2B space. In fact, the front end of it is always B2B. The question is whether you’re facing a B2B2B situation (the channel’s customers are also businesses), or a B2B2C situation (the channel’s customers are consumers). Our focus here will be the former, but many of the strategies carry over into the B2B2C space as well.

There are a number of factors that make channel marketing a strategic challenge:

Competing brands. In order to serve multiple customer needs, some dealers carry additional brands with which you must compete for the dealership’s time, attention, and resources. Some dealers even stock directly competitive products.
They own the customer and the market. Your dealer or sales channel is the face of your brand in their local markets. In most cases they own the relationship and the valuable customer data, and represent your brand to local partners, suppliers, and media.
They’re independent businesses. Dealers will make decisions that benefit their business and ensure their future. These decisions won’t always be in your best interest. The more win-win opportunities you can find to align your priorities with theirs, the more success you’ll have.
They’re usually not marketers. This often depends on the size of the business. If they’re large and have multiple locations, they are much more likely to have a dedicated marketing person or team. However, that can mean that a small team of marketers are responsible for multiple locations across several cities or states, all vying for their attention and marketing resources.
The channel feels left out. Many companies don’t have a good track record of prioritizing communication to their sales and distribution channels. It can seem easier to communicate directly with customers and assume the channel will know what’s going on. But when that happens, channel partners will feel like they’re the last to know when something big happens.

The last thing you want is them finding out what you’re up to from their customers — they’ll feel foolish and it will look like you’re not communicating with them. These challenges set the stage for an interesting and unique marketing environment. One that can be mutually beneficial, greatly amplifying your brand’s reputation and your sales numbers, or one that can pose a serious hurdle to your organization's growth and future success. How you market to and through your channels makes all the difference.

To the channel or through the channel? Well, both.

Channel marketing comes in two distinct varieties — marketing that is done to the channel and marketing that happens through the channel. In the first case, the channel is the end audience. In the second, the channel is the conduit through which you reach your end customer. Both are wildly important. But the approaches, strategies, and messages for each are quite different.

To the channel:

Promotion of co-op or incentive programs
Insights into your marketing plans
Sneak peeks of new products/services
Product, sales, service, and customer support training
Tips to grow their business
Programs that help support their business (HR, accounting, software, etc.)

Through the channel:

Local marketing efforts
Co-sponsored events
Social media content from you that they can share or repost
Advertising with local tags (radio, TV, print, digital)
Personalized direct marketing (mail, email, text)

A successful channel marketing strategy addresses both TO and THROUGH strategies. And when you can tie these two efforts together, your chances of fully engaging your channel partners and everyone coming out a winner go up dramatically.

Different strokes for different folks.

Much like your end customers, the individuals in your channel come from different backgrounds, have different dreams, and perform different jobs in different environments. They’re people; people you need on your side and people who need different things from you.

There are a few key considerations when segmenting audiences inside your channel and strategizing about how you’re going to engage them.

Their job

What do these individuals do all day?
What sort of environment are they working in?
What are their frustrations?
What does success mean to them?
What mediums are best employed to reach them?

Image of an eyeglass looking at a person

Their background

How old are they?
Where are they in their career?
What do they know about the industry and your products?
What has their experience been with your company in the past?

Their relationship with the customer

Are they on the front lines or in the background?
Where in your customer’s life cycle are they engaging?
What tools can you arm them with to be more effective?

And just as there are different types of individuals working inside your channel partner’s business, the businesses themselves are often quite different. Some dealers or wholesalers are multi-million dollar businesses with multiple locations and marketing budgets that can rival your own. Others are mom-and-pop businesses or startups that likely aren’t staffed by anyone with a marketing or communications background.

Segmenting your channels by size or type can help you address the varied communications challenges of each. And creating personas for key channel audiences can go a long way in helping you and your team better understand and engage the right people at the right time with the right messages.

Keep them in the loop

Your channel partners need to know what you’re communicating to your (and their) customers. The more transparency you can provide, the better. And not only do they need to know this information — they need to know this information first. Why?

They hate surprises.

They may want/need to coordinate their local efforts with national efforts.

They really, really hate surprises.

Sharing this information doesn’t have to be complicated, but it does have to be clear. Try to keep it to a single page or a simple, consistent monthly or quarterly update. Also sharing the investment of time, people, and dollars you’re making to help their business can help to bolster your relationship with them. If there are metrics or other data you’re collecting that could help your channel partners make better decisions, share the data and insights with them as well.

Cooperative efforts

One of the most common, and commonly maligned, channel marketing strategies is the co-op program. Corporate offers to foot the bill for a good portion (usually at least half) of the channel partners' marketing efforts, assuming those efforts meet a certain set of requirements. It seems to make sense that if they’re promoting your brand and helping move products or services for you, a co-op program would benefit everybody.

However, as much as 40% of co-op dollars go unspent every year.

Those are resources that should be helping you build your brand and move product … so what gives? It’s free money, right? Well, sort of. Despite offsetting a large portion of their marketing costs, some channel partners may not feel the co-op dollars are worth the effort.

The top three hurdles to co-op participation

1

Too many rules and restrictions.

2

Too much paperwork.

3

Lack of awareness regarding what funds are available.

Improve Your Channel Marketing

What those concerns tell us is that your channel does not see those co-op dollars as “free money.” Yes, you’re underwriting their efforts, but if participation requires a major investment of time and energy, they’re out.

The good news is that these hurdles are easy to overcome … with some effort and investment. Here are some ideas for improving a channel marketing program.

Reduce excessive rules and restrictions. Over-regulation comes from marketers who expect to have a tight grip on their brand, or marketers who severely limit the sort of efforts they’ll support. In both cases, they’re not trusting their channel partners to represent them well, which is something that can be overcome through better training and more consistent channel-specific communications.

Reduce paperwork. Consider moving to a digital platform that takes the hassle out of filing co-op claims. And if you can provide a service that helps your channel develop and manage marketing materials and programs, they can rest assured that everything they do will qualify for co-op. Bonus: Providing such a service also helps you keep their efforts on brand.

Create a centralized online system. This, paired with a clear and consistent communication tool, can ensure that your channel understands what funds are available and can also educate them about how, when, and where to get the maximum ROI for those co-op dollars.

Help your channel partners do better marketing. Oftentimes your channel partners want to improve marketing but lack the know-how and resources to do so. Help them overcome these key barriers, and help them develop materials that both grow your brand and move product for them, and they’ll be much more likely to carry the banner for your brand in their local market.

We’ve only scratched the surface. There’s much more you can do to understand how channel marketing and co-op programs work and how to employ them to grow your brand, improve your channel relationships, and increase sales. It’s a complicated topic and we’d love to learn more about your program or help you start one.

Introducing: 2RM's Channel Marketing Studio

Two Rivers’ Channel Marketing Studio is a proprietary software platform designed to make channel marketing programs easy — for the dealer, the agency, and for you. Watch this short video to learn more.

CHANNEL MARKETING

B2B Marketing Guide