The Seven Most Common Channel Strategy Mistakes
The Seven Most Common Channel Strategy Mistakes Here are the most common misconceptions we have seen in business-to-business markets that sell through distributors, wholesalers, dealers, etc. Mistake #1 Expecting Distributors to Generate Demand for Your Product Distributors service markets and rarely develop them. Demand generation is the role of the manufacturer. Some channels classified as "technical specialists," will help to educate end users relative to new product and technologies. Therefore, they can contribute to demand generation, but ultimately demand creation is the manufacturer's responsibility. Sales and marketing managers that are frustrated with a distributor's lack of demand generation activity often will refer to them as "order takers" and in a sense, they are. In fact, broad-line and logistical distributors are very, very efficient at taking orders. If you look at their activities closely, you will see they do a lot more to service their accounts--but they service demand, not create it. Mistake #2 Expecting Great Performance by Providing Distributors with Exclusive Territories The only good reason to grant a channel an exclusive territory or market for your products is if it is new, requires the distributor to invest and you want the distributors to feel they will have an opportunity to recoup their investment. Even with this situation, the timeframe for the exclusive should be limited.