Creating a Go To Market Channel Strategy by Stephanie Piché at SVPMA Monthly Event April 2002

1. Key Practices, Inc.
Go to Market Channel Strategies
Practical Solutions for Fast, Sustainable Results
Key Practices, Inc. 1
April 3, 2002 Copyright 2002

2. Go to Market Channel Strategies - Agenda
• Disclaimer
• Focus
• Value Proposition
• CRM
• Pulling Sales and Marketing Together
• Channels
• Measure
• Build
• Closing
3 April 2002 Key Practices, Inc. Confidential 2

3. Go to Market Channel Strategies - Disclaimer
• There are many methodologies developed, tested
and implemented over the years
• This is a review of “Best Practice” ideas to help
organizations build process, gain buy in and see
results quickly.
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4. Go to Market Channel Strategies - Focus
What is the most important factor in developing
a “Go to Market Channel Strategy”
?
The Customer
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5. Go to Market Channel Strategies – Focus on
the Customer - Basics
After you determine what the best, high-growth
markets & segments for your products &
services are…
Focus on Identifying YOUR ideal
Customer
within those markets or segments
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6. Go to Market Channel Strategies – Focus on
the Customer – Basics
How can you effectively identify and understand
your customer?
-Engage thought leaders in that market?
-Survey Prospects?
-Go to Trade Shows?
-Speak to Analysts?
-See what your competitors are doing?
-What do you do?
- Audience Participation
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7. Go to Market Channel Strategies – Focus on
the Customer – Basics
How can you effectively identify and understand
your customer?
KP’s preferred method:
Get Your Feet Wet!
Call a company who fits your ideal customer profile
Ask if you can come out and see how they run their
business – more than likely, they will oblige!
– Identify and Understand their challenges
– Look for areas of process improvement
– Take copious notes
– Build a Value Proposition Model for use as a sales tool
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8. Go to Market Channel Strategies – Focus on
the Customer – Value Proposition
Refine & Articulate your “Value Proposition”
• Understand the Value of Your Product to the Customer
• Where are the Process Improvements
• Where are the Cost Savings
• What Differentiates You from Your Competitors?
– What are they selling and to whom?
• Outline Financial and Non-financial Benefits
– There are clear-cut savings and those that can be realized if this is
implemented
• Create a ROI Calculator Based on These Factors
– Use Industry Standards where no data is available
» Example: Overnight delivery is only 95% on time
• Boil this down to 7-10 Questions to get to the ROI
– Review Example ROI Calculator
3 April 2002 Key Practices, Inc. Confidential 8

9. Go to Market Channel Strategies – Focus on
the Customer - Your Target Market
What Makes a Market “Right” for Your Company?
Key elements your target market should have:
– Strong demand for your products or services
• Not Just High Growth for that Segment!
– Business needs which YOU can address
– Customers that can be identified as having an urgent need
and a budget
– The ability to reach customers quickly & efficiently
– An OVERWHELMING competitive landscape that prevents
your entrance into that market
QUESTION: Do Your Prospective Clients in This Target Market Prefer to Buy
Through Partners or Prefer to Deal Directly with the Manufacturer?
3 April 2002 Key Practices, Inc. Confidential 9

10. Go to Market Channel Strategies – Focus on
Your Customer - Trends
Know Your Customer(s)!
• Know what customers are buying... and what they'll be buying 12-
24 months out
• What are their business needs, and how they see you & your
competition’s offerings answering those needs
– Where could you improve your “image” in order to win their business
• How do your target customers buy today
– What kinds of purchasing processes
– Which Channels do they use?
– How they plan to do business with their vendors in the future
– Do they Prefer e-business and e-commerce for their current or future
purchasing activity
– Do they like your Pricing, Bundling, Service and Support?
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11. Go to Market Channel Strategies – Focus on
the Customer – What Else? The C’s
• Identify YOUR Competitors
– Both Kinds of Competitors
• Head to Head
• Perceived
– Understand How They Do Business
• What makes them successful
– How do they go to market?
– What channels do they use?
• Build integrated systems for Continued Customer
Relationship Management (CRM) into your strategy
– Avoid the 3 E’s or You’ll Run out of $
• Everything to Everyone – Everywhere!
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12. Go to Market Channel Strategies – Focus on
the Customer – CRM Now!
Tightly align your BRAND promise to your Customer
Experience (multi-channel marketing)
You Will Build a Loyal Customer Base
& Your Competition
 Your customer will expect to be able to obtain product
information, support, service and procurement when and
how they want it, and they will choose the channel and
manufacturer that most efficiently provides this.
3 April 2002 Key Practices, Inc. Confidential 12

13. Go to Market Channel Strategies – Focus on
the Customer – CRM - Integrated Solutions
Companies can be innovative in their delivery of multi-
channel benefits through integrated solutions,
creating significant growth and be profit drivers
– Examples of companies who have invested in this strategy
are: Allstate, Gateway, and E*Trade by building and
integrating field, phone, and Internet sales and service.
– The key to these successful multi-channel investments is
combining the customer’s data into ONE source.
FACTOID: The market for CRM software alone has grown from zero in 1990 to an
estimated $5 billion in 2000 and is expected to reach $12 billion by 2004
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14. Go to Market Channel Strategies – Focus on
the Customer – CRM - Integrated Solutions
• How do you measure success?
– Without a consolidated customer data source, determining
the economics of customer segments can be virtually
impossible.
• Benefits of a consolidated customer data source:
– You could use this consolidated information to analyze
customer behavior across multiple facets of the relationship
– Correlate their behavior to “needs-based” segments
defined by sales volume
– Understand how a customer segment buys
• Price, Innovation, or Convenience
3 April 2002 Key Practices, Inc. Confidential 14

15. Go to Market Channel Strategies – Pulling
Sales and Marketing Together
Why?
You need to
So You Can Justify More the
close Marketing Dollars!
loop!
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16. Go to Market Channel Strategies – Pulling
Sales & Marketing Together – Close The Loop
• You Plan
• You Build
• You Execute
• Did They Come?
• Did They Buy?
• Are They Coming Back?
Is it a Field of Dreams?
3 April 2002 Key Practices, Inc. Confidential 16

17. Go to Market Channel Strategies – Pulling
Sales & Marketing Together – Close The Loop
• No CRM? No SFA? What?
– Use Excel!
• You NEED Sales Force Performance & Productivity
Data
– By Region, Market, Competition
– Time to Close from Initial Contact
– Tools Used to Close Sale – ROI Calculator, References,
etc…
• You need this data for all of your channel partners
– Direct Field Sales and Partners
3 April 2002 Key Practices, Inc. Confidential 17

18. Go to Market Channel Strategies – Pulling
Sales and Marketing Together - Channels
What Can Using Multiple Channels Do For Your
Company?
Proper implementation allows for
– Companies to Achieve Higher Margins
– Build Revenue Faster
– Increase Customer Loyalty Factors
What Channels Should My Company Consider?
– The Internet
– Business Partners, VARS, Distributors, ASP’s
– Direct Sales Force
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19. Go to Market Channel Strategies – Pulling
Sales and Marketing Together - Channels
Your Channel Strategy NEEDS to be Dynamic –
Flexible – Easy to Modify & Refine
• Develop Channel Recommendations with Sales
– Answer “How you can creatively reach existing & new
customers?”
– Establish Specific Criteria – to Develop 3-4 Specific Channels to
Develop Initially
• Determine Who to Partner With & How Many
– Evaluate who is in this space & who their clients are
– Don’t bite off more than you can chew
• Develop Key Promotion/Pricing Strategies and Tactics
• Create Realistic Performance Metrics
– Revenue & Profit Projections over the next 12 & 24 months
3 April 2002 Key Practices, Inc. Confidential 19

20. Go to Market Channel Strategies – Pulling
Sales and Marketing Together - Channels
Channel Conflict Will Happen!
Or is it “Should Happen?”
• Not all channel conflict is bad
– Channel conflict indicates complete market coverage
– If there is no conflict - there are holes in your market
coverage
– A channel strategy that accepts some level of conflict –
while avoiding detrimental effects will benefit as markets
grow
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21. Go to Market Channel Strategies – Pulling
Sales and Marketing Together - Channels
Collaborate, Share Knowledge and Execute!
– Leverage your regional, national and global channel
partners by providing these 3 elements
– Benefit from a Stronger Channel Network
• By combining the best competencies of your channel-network
you are optimally serving and building loyalty with your
customer
• By connecting each channel member with the necessary
communications & infrastructure - they understand the real
strengths and capabilities of your channel as a whole
3 April 2002 Key Practices, Inc. Confidential 21

22. Go to Market Channel Strategies – Measure
How Are Things Going?
– Is Your Plan Yielding Results?
– Are You Implementing New Technologies?
• e-commerce Initiatives
• Integration of CRM
• Are You On Target with Market & Customers?
• Is Your Channel Mix Working?
• Are Your Business Partners Effective?
• How Are You Coping With Channel Strategies?
• Are Your Promotions Creating Results?
• Are You Using Closed-Loop Sales Methodologies for Reporting
Performance Results (selling productivity, revenue, market share,
profits)?
3 April 2002 Key Practices, Inc. Confidential 22

23. Go to Market Channel Strategies – Measure
How Are Things Going?
– Is Your Plan Yielding Results?
– Are You Implementing New Technologies?
• e-commerce Initiatives
• Integration of CRM
• Are You On Target with Market & Customers?
• Is Your Channel Mix Working?
• Are Your Business Partners Effective?
• How Are You Coping With Channel Strategies?
• Are Your Promotions Creating Results?
• Are You Using Closed-Loop Sales Methodologies for Reporting
Performance Results (selling productivity, revenue, market share,
profits)?
3 April 2002 Key Practices, Inc. Confidential 23

24. Go to Market Channel Strategies –
Build the Plan - Review
What Key Factors Do You See As Important in
Building the Plan to Go to Market Today?
Audience
Participation
3 April 2002 Key Practices, Inc. Confidential 24

25. Go to Market Channel Strategies – The End!
Key Practices, Inc.
Thanks You For Coming Tonight!
We Also Thank and
Recognize our Host for the Evening:
Silicon Valley Product Management Assn
Tell Your Friends – Colleagues!
3 April 2002 Key Practices, Inc. Confidential 25