27. How Do You Want Your Product to
Get to Your Customer?
ü From You Directly
ü Through a Distributor
ü Retail Stores
ü Wholesalers
ü Bundled with other goods or services
27
30. How Does Your Customer Want to
Buy Your Product from your Channel?
ü Same day
ü Delivered and installed
ü Downloaded
ü Bundled with other products
ü As a service
ü …
30
32. Distribution Complexity
Global Systems
Evangelists Systems Integrators
WANs
Mainframes
Marketing Complexity
lu me Direct Sales
r Vo Minis
g he
Hi
LANs
VARs
PC Servers d ed
Desktop PCs e Ad
Retail alu
rV
Printers
ig he
Keyboards H
Web, Telesales Service
Technicians
Toner
Solution Complexity
32
33. How
Do
the
Economics
Work
in
Different
Sales
Channel?
34. How
Are
Channels
Compensated?
– Commission
– Percentage of sales price
– Discounted pre-purchase
34
35. Channel
Economics:
“Direct”
Sales
List
Your Revenue Price
End Consumer
Discounts
Cost of Goods
Profit + SG&A + R&D
(Supply Chain)
Selling: Cost of Sales, which includes salaries, advertising expenses, rent, and all
expenses and taxes directly related to producing and selling product
General: General operating expenses and taxes that are directly related to the
general operation of the company, but don't relate to the other two categories
Administration: Executive salaries and general support and all associated taxes
related to the overall administration of the company
35
36. Channel
Economics:
Resellers
List
Your Revenue Price
End Consumer
Discounts
Cost of Goods
Profit + SG&A + R&D Reseller
(Supply Chain)
36
37. Channel
Economics:
Distributors/Resellers
List
Your Revenue Price
End Consumer
EU Discounts
Distributor
Cost of Goods Profit + SG&A +
Reseller
(Supply Chain) R&D
37
38. The
Channel
as
a
Customer
– Some products are embedded in others (OEM)
– Some products are resold by others (VARs)
– Some products are distributed by others
– Who’s the customer?
38
39. Channel
Economics:
OEM
or
IP
Licensing
List
Your Revenue Price
End Consumer
EU Discounts
Distributor
Distributor
Cost of Goods
Master
(Supply Profit + SG&A + R&D Reseller
Chain)
Cost of
Goods Profit + SG&A + Reseller
(Supply R&D
Chain)
Your
Product
Becomes
Your
Customer’s
Cost
of
Goods
39
40. How
Are
Channels
MoKvated
or
Incented?
– Money! – what makes them the most?
– Training
– Marketing to the channel
– SPIF (Sales Performance Incentive Fund)
• pay the channel’s sales rep a bonus
40
45. Customer Archetypes Drive
Get/Keep/Grow
What’s their role?
How this person is evaluated / promoted /
compensated?
Who are they?
Buyer’s name
Position / title / age / sex
How do they buy?
Discretionary budget (name of budget and
amount)
What matters to them?
What motivates them? Lab Manager: Brian
Who influences them?
What do they read/who do they listen to?
47. Paid Demand Creation Activities
“Paid” Media
Public Relations
Advertising
Trade Shows
Webinars
Email marketing
On-line SEM
Biz Dev
48. Free Demand Creation Activities
“Earned” Media
Publications in journals
Conference speeches/papers
Educational seminars
Public relations
Blogging / Sharable content
Social Media
Communities
71. Cost per Visitor = $0.75
Visitor to Raw Lead
Raw to Qualified Lead
3%
20%
71
72. Cost per Visitor = $0.75
Visitor to Raw Lead
Raw to Qualified Lead
3%
20%
0.75
Qualified Lead Cost = = $125
0.03 * 0.20
72
73. Cost per Visitor = $0.75
Visitor to Raw Lead
Raw to Qualified Lead
Qualified Lead to Closed Deal
3%
20%
10%
0.75
Closed Deal Cost = = $1250
0.03 * 0.20 * 0.10
73
74. Cost per Visitor = $0.75 Marketing Cost
Sales Cost
Visitor to Raw Lead
Raw to Qualified Lead
Qualified Lead to Closed Deal
3%
20%
10%
Marketing Cost = $1250 Sales Cost = ?
74
91. Churn
• 1%
to
2.5%
churn
per
month
is
acceptable
• Higher
than
that,
you
are
filling
a
leaky
bucket
–Need
to
understand
why
you
have
low
customer
saNsfacNon
and
address
the
problem
92. the equation that matters...
infrastructure offer customers
activities relationships
partners value
segments
prop.
resources channels
financial
COST
< REVENUE
93. ... is this one: CAC << LTV
acquisition activation retention revenue
CAC LTV
referral
94. CAC << LTV
if and
COST < REVENUE
then COMPANY!