1. Sometimes you’ve actually got to meet your
customer
David Jenkins; i2i-management.com
St John’s Innovation Centre; 8 Mar 11
March 2011 managing sales channels 1

2. An outline of today’s workshop
• How do you motivate buying decisions?
• You don’t have a business if there’s no
mechanism for enabling potential customers to
make buying decisions and motivating them to
do so in your favour.
• This interactive workshop reviews the options,
including the web, direct sales, distributors and
franchises, provides a framework for choosing
the right ones and explains how they should
then be managed.
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3. Please note that it’s not about selling
It’s about managing sales channels
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4. This is how the workshop will
proceed
• Building the model
– Where do we meet the customer?
– Choosing the right channel
• Direct sales, distributors, agents and franchises
• Using the web
– You can use the web for anything ...
• Where does marketing fit in?
– What should marketing be doing?
• Channel conflict
• Getting help
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5. And what right have I to be here
today?
• Been there ... done
that ... got the gold
cards
• Lived in a few places
• Worked for some
companies
• Managed different
sales channels
• Used the web
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6. And forgive me ...
• My background is B2B with a focus on products
• This workshop should not be so limited and
should embrace BtoC (and in fact CtoC) and
services as well.
• My language is going to be tilted towards BtoB
and products but that will not be to exclude the
rest.
• Please challenge me if you think that I’m not
getting the balance right.
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7. meeting the customer: what
exactly does that mean?
discover
develop deliver market sell supply service
or design
• This is the value chain which I’ve just
rediscovered
• Just about every business can be represented
this way. Just change the sizes of the boxes
• So if this is what a business does where does it
meet the customer, where does the buyer meet
the seller ... discuss!
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8. Where does marketing fit into
this scheme?
discover develop deliver market sell supply service
inbound strategic Internal tactical operational relationship
marketing marketing marketing marketing marketing marketing
• Marketing people will hate me for this but
marketing is a resource function like HR and
finance.
• It takes place where ever the marketing
resources need to be managed
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9. In the beginning we were all
sole traders
• Business people
would interact
themselves directly
with customers
• That’s little different to
having a direct sales
force today
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10. And then came the middle man
• Manufacturers
especially would sell
their products through
‘shops’
• Shops are in effect
distributors.
• Shops exist in the
same way today
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11. And some of these engaged in
eCommerce
• Selling products
without direct person
to person contact is
little different to what
we call eCommerce
• The point is there is
no meeting and the
customer makes his
or her buying decision
on his/her own
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12. There was even a little
marketing
• I guess marketing
used to focus on
promotion
• People must have
thought about
products, prices and
place (channel)
• They just didn’t call it
marketing
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13. This suggests a model for today
• Where do we meet the customer (if at all)?
• Whose resources do we use?
location
remote meeting place customer's site
own
own eCommerce site branded outlet direct sales
resources
3rd party
portal grocer's shop distribution
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14. Today I’m going to focus on web
and direct vs distribution
• Meeting places clearly continue to be important
• They exist for both B2B and B2C
location
remote meeting place customer's site
own
own eCommerce site branded outlet direct sales
resources
3rd party
portal grocer's shop distribution
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15. Choosing the right channel
Which channel fits which business?
...discuss
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16. The choices today are really no
different to what they were then
Web: route of • Obvious for software, low value items, BtoC and CtoC
• Challenges you to ‘drive’ customers to you
choice for many • There is no physical meeting between buyer and seller
today • High fixed cost, low variable cost
Direct sales: • Best for high value and/or technical items
challenge of • You need to find the potential customer
• Lots of control but issues of fixed cost and roll out
managing people
• Low fixed costs and rapid roll out possible
Distribution: best • Same challenge of finding the potential customer
of both worlds? • But mega management challenge
February 2011 Routes to market

17. Direct sales, distributors and
franchises
• Hands on management
Direct sales • Develop best practice
• Management by influence
Distributors • 3 golden rules
• Management by contract
Franchises • Who’s the customer?
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18. Direct sales: managing what we
do; develop best practice
sales supply service
Are we calling on Are we shipping Are we responding
enough people? promptly? when we are needed?
Are we calling on the Are we shipping Is our response
right people? reliably? effective?
Are we effective in our Are our customers Are our customers
calls? satisfied? satisfied?
Are we winning Are we keeping our Are we getting repeat
business costs low orders?
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19. Your own sales+supply+service
teams: learning how to do it
cost per suspects per repeat buys as
build awareness suspect quote; demo a % of the
generated and trial stats installed base
revenue per
generate suspect develop prospect build relationship unit of installed
base
sales service
productivity secure order service customer
productivity
measurements measurements
quotes per supply
order; the install equipment
% sales to new productivity
win:loss ratio customers measurements
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20. Distributors: the 3 golden rules
Don’t think of your distributor as a
customer; its customers are your
customers
Don’t expect your distributor to do any
serious marketing; it’s a sales, supply
and service organisation
Don’t expect your distributor to do
anything for you if it doesn’t make a
decent margin
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21. Distributors: the practicalities
• However hard you try
to influence them they
are still independent
• You will always be
competing with other
principals for
resources
• The distributor owns
the customer
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22. Franchises: nice work if you can
get it; think critical mass
• A franchise is a
hybrid.
• On the one hand you
have people
dedicated to your
products/services
• On the other hand
they’re not your
people
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23. Agents are just a part of the
channel
• They just keep a look
out for you
• There’s little loyalty
and they simply take
a fee for introducing
business
• Good agents are fine
but poor ones might
drain you of resource
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24. However you do it you’ve got to
manage it
Direct sales • Manage your own people
• Manage the relationship
Distribution • Manage your champion
• Manage their people
Franchise • Manage the relationship
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25. Using the web: you can use the web for
everything
... discuss
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26. Using the web: you can use the
web for everything
• Be clever; make it easy for prospects to find you
marketing • Use every opportunity to highlight your presence
• Your web-site is your catalogue
sales • Make it easy for people to make the right buying decision
• Classic eCommerce
supply • Make it easy for people to buy from you
• Your web-site makes it easy for your customers to stay with you
• cement the relationship
Service
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27. Where does marketing fit in?
• Think of the 4Ps
– Place: that’s channel and that’s what this is all about
– Price: think especially about margins earned by distributors
– Promotion: where does this take place?
– Product: what’s the channels’ role in new product development?
• For services people also talk about:
– Process: how is this service delivered?
– Physical evidence: how will the customer know that he or she
has experienced the service?
– People: what’s the role of people? How do we train, resource,
manage and reward them?
• What should marketing be doing? ... discuss
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28. Where does marketing fit in?
Back to the value chain
• What’s the role of marketing?
• Building awareness
Sell •
•
•
Generating leads
Supporting sales activity
Setting prices
Supply
• Establishing service standards including availability
• Defining the process
• Providing the physical evidence
Service • Reinforcing relationships
• Stimulating repeat purchases
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29. Channel conflict: when to get it,
how you manage it
• In the simplest case
of direct sales only ...
– you’ve got to make
sure that your sales
people stay on
territory.
– that’s easy. You
manage it.
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30. Channel conflict: when to get it,
how you manage it
• In the simplest case
of direct sales only ...
• If you’ve got 2
distributors ...
– you’ve got the same
issue
– but you’ve got EU law
to worry about
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31. Channel conflict: when to get it,
how you manage it
• In the simplest case
of direct sales only ...
• If you’ve got 2
distributors ...
• You may be mixing
direct + distribution ...
– be clear about the
rules relating to house
accounts
March 2011 managing sales channels 31

32. Channel conflict: when to get it,
how you manage it
• In the simplest case
of direct sales ....
• If you’ve got 2
distributors ...
• You may be mixing
direct + distribution ...
• If you mix physical
and web business ...
– get the pricing right.
– it won’t be easy.
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33. A final thought before we leave
distribution? Why do it?
• It’s a specific example of a more general
question: should we do this in-house?
• Go outside if someone else can do it better and
it’s not an important strategic process.
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34. A final thought before we leave
distribution? Why do it?
• It’s a specific example of a more genera
question: should we do this in-house?
• Go outside if someone else can do it better and
it’s not an important strategic process.
what sort of process is this?
standard across
special to us
industry
how well do we do it?
well
keep it in house consider in-sourcing
badly
we've got a problem! consider out-sourcing
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35. Where to go for help
• Distribution
– Business Link http://bit.ly/eDeof8 (focus on export)
• Franchises
– Which Franchise? www.whichfranchise.com
– British Franchise Association www.thebfa.org
– Franchise directory www.theukfranchisedirectory.net
– Business Link http://bit.ly/gRXTtF
• eCommerce
– Business Link http://bit.ly/fYltUR
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36. David Jenkins
i2i@davidjenkins.org.uk
www.i2i-management.com
+44 1223 236232 or +44 7739 759859
Skype i2i-management
Twitter thisisi2i
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