“There is very little loyalty left. Manufacturer X is mercenary. They just want to make money, and I’m mercenary. In other words, Manufacturer X doesn’t care about me, and I don’t care about Manufacturer X. They just make a good product.”
This quote from a recent study sums up the state of many of the channel relationships we see across a range of technology and industrial B2B markets. In tight economic times everyone is looking for ways to protect or increase revenue streams. Channel partners want exclusive territories and the luxury of carrying your competitors’ products. Manufacturers use channel partners to extend their geographic reach and then make plans for selling direct. This situation may be unavoidable, but it is important not to lose sight of the importance of your channel partners in defining your brand image and equity among your end-customers.
In our research across a range of B2B verticals and product categories we often find that end-customer perceptions are shaped entirely by their experience with the product and with their local distributor or VAR – customers often have no meaningful knowledge of the manufacturer outside of these experiences. This can also extend to loyalty where end-customers rely on a trusted distributor or VAR to help them select the best products for their business; if their partner recommends switching brands they follow that advice. In addition, while in principle many end-customers find the idea of buying direct appealing there are often internal barriers and hurdles to doing so.
For many manufacturers their channel partners will continue to have the most direct contact with end-customers and remain a critical component of revenue streams for the foreseeable future. Therefore it is important to understand the role your channel partners have in the buying process and the influence they have on end-customer perceptions and decisions. Even when positive channel relationships exist, it is not unusual to find that channel partners lack the product knowledge or business process expertise to promote the manufacturer’s products effectively.
Manufacturers sometimes worry about asking the opinions of channel partners; they assume all they will hear are requests for lower prices. Some channel partners will indeed cry price, but most are interested in a legitimate dialog with the manufacturers they partner with. Bringing in the end-customer perspective into the conversation can be instructive for both sides.
Regardless of how you approach this conversation—internal outreach, conferences or primary research—knowing more about the role your channel partners have in shaping your brand will help both you and them be more successful.