Product marketing plans for products and/or services targeted for channel distribution must include safeguards against the possibility of granting exclusivity to specific partners. The trick here is to proceed carefully and in such a manner that exclusivity is never presumed, implied or ever delivered.
Typical channel distribution prospects are familiar with negotiations based on non exclusive rights to sell products and, in most cases, there is no problem navigating through these negotiations to a successful conclusion for all parties. But much responsibility rests on the shoulders of the manufacturer or ISV to maximize the benefit of channel partnerships framed on a non exclusive basis. Indeed, “more the merrier” ought to be the underlying objective of all of these campaigns. The key driver is revenue; therefore, the more sales personnel selling the product for you, the better.
Consider the downside of granting exclusivity to specific partners: revenue potential tops out at:
- The outer limits of geographical reach for the channel prospect
- The maximum revenue potential represented by the size of the vertical market size serviced by your channel prospect, and, of most importance
- The channel partner’s reputation at any given moment in time
Better not to go there.
Better, as well to nest your channel strategy (built on a resolution to maintain non exclusive affiliations with partners) within a greater marketing pan that augments channel revenue with a direct national sales effort and a white box syndication effort. Marketing management should play the role of ambassador to the market, spending quality time with any/all partners to indoctrinate them to the plan.
As well, marketing management should present the broad product value proposition directly to the marketplace. This effort will be particularly useful for partners as it will provide the wind to their sails, lowering the burden that would otherwise fall on them to magnetize the market for the product.
A comprehensive plan as I’ve just sketched can take an emerging business very far along with regard to attaining critical “escape velocity” to power into revenue positive territory. Of course, cash positive will also spell that much more benefit for the business, not to mention providing the fuel needed to expand programs and, potentially help management decide when it makes sense to eschew under the radar marketing for something more palpable.
Nevertheless, the final decision about whether or not it makes sense to switch from covert to overt marketing shouldn’t be made just upon revenue levels. More of that in another post.
© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved