Why this is blog post is important to you
Instead of just pushing what your company sells through channels, you should be looking for ways to create demand, a.k.a., “pull” from your channels. One of the best ways to do this is to ensure that channel partners are motivated and actually want to sell more of their products because yours are in the mix. In my experience, this is the key to creating maximally productive distribution strategies and successful long-term relationships.
In my February 11 blog post, I suggested ways CEOs and their teams can rethink distribution strategies. In this post, I follow up with some specific suggestions related specifically to value propositions.
What I recommend
First, we all need to recognize that VALUE HAS MULTIPLE DIMENSIONS. Understanding all the possible dimensions of value that are or could be associated with your offering is a critical step in figuring out how to meet your distribution challenges.
Even a simple product – like a carton of milk – has many dimensions of value: how the milk looks, its origin, whether it’s organic or not, the style of the container, fat and nutrition content, expiration date, and of course taste and price. Now let’s think about complex products, and especially complex high-tech products. In these cases the number of possible dimensions of value goes up exponentially. This is why companies often miss seeing ways their products or services could deliver more value to more people – including channel partners.
For an increasing number of companies, creating sustainable businesses requires building successful distribution and partner relationships. Based on experience, I know that having great relationships with partners can sometimes be more important than having great relationships with end-customers.
Consider Intel. Despite the company’s brilliant ads and branding strategy, few of us actually buy a computer specifically because of “The Intel Inside”. We buy computers because we think (or know) that Intel products make the computers we buy better. As a result, Intel makes it possible for their partners to sell more of what they have to offer because they use Intel components. Intel adds value and they make sure that as many of us as possible understand how and why they add value.
Next, we need to ask WHO SHOULD CARE? Who are the individuals – by name and by role – in existing or target partner organizations that you believe care most or should care most about what you sell and how they can be more successful selling your products? If you can’t name the person, it may be time to rethink your partners and your partnering strategy.
If the value of your offerings is recognized by someone who occupies a c-suite role you have a much greater chance of creating a productive partner relationship than if your value is only recognized by people who report to them or individual end-users. (This, by the way, is why companies that produce productivity tools often find it so hard to sell these at an enterprise level – at least until they figure out how to communicate the value of their offerings in the form of outcomes that matter to top decision makers.)
Once you know who should care, then ask WHY should they care? Personally, this is what gets me excited: figuring out where people are coming from, and then, what could be done to motivate them to act – in my case, in the best interest of our clients. Doing this successfully requires seeing the world through the eyes of others – especially decision makers, influencers, and gate keepers. Once I am able to get a clear picture of what motivates someone, I usually have a pretty good idea of how easy or how difficult it will be to craft a value proposition that will matter to them. I also then have a pretty good idea which dimensions of value will matter most.
Now it’s time to answer WHY YOU? What makes your offerings meaningfully different than available alternatives your target partner may have access to or be considering? Bottom line, your meaningful difference will have to translate into more revenues for your partner, more profit, or both. And your value proposition will have to help them recognize how and why they will be significantly better off if you are in their mix.
After you’ve done all of this, it’s time to CRAFT A COMPELLING STORY – one that is specifically tailored for each channel partner you want to work with. And make no mistake: one size will not fit all. If you think the same story will work for multiple partners, either you don’t know these companies well enough or you may be looking at redundant relationships that could create channel conflicts and inefficiencies down the road. Just as you should strive to offer unique value to each of your partners, you should look for partners that will bring unique contributions to your mix of relationships.
To grow revenues and create more sustainable relationships with distribution and channel partners you should:
- Explore the many possible dimensions of value that might matter to partners.
- Figure out who within partner organizations care or who should care about what you have to offer.
- Get into the heads of these stakeholders. Figure out what motivates them, and what you need to do to get them to act in your best interest by doing something that will be in their best interest.
- Answer the question, why you? Make sure your differences are meaningful and will motivate buying behavior.
- Craft tailored value propositions – one for each partner that is critical to your success.
- Use your value proposition insights to create compelling stories – not just sales pitches.
- Get each partner to recognize why and how they will be better off with you in their mix…and vice versa!
It’s one thing to create believers in technology; it’s quite another to create buyers that will sustain a business. Crafting the right value propositions and stories will help you create believers and buyers.