As a manufacturer, your channel is full of people who could have a significant impact on your success. You could be calling on…
- Your indirect sales team
- Your distributor sales reps
- Your distributors’ customer
- The installer, the architect, the end user
It’s easy to get distracted by all the options. But it may also be too narrow to focus on only one segment of these channel partners, or Points of Influence (POI). So, what should you do? With so many participants in your channel, the process of down-channel mapping can become . . . complicated.
But it doesn’t have to be. With this channel blueprint, you can begin to narrow down the most cost-effective POIs.
So, with that in mind, let’s start by understanding who these particular POIs are at each rung of our channel. Then, we’ll dive into the challenges that you face in reaching them. Finally, we’ll share strategies for how to address these challenges.
Optimizing your channel ecosystem begins by answering one simple question. Who are your points of influence (POI)?
What Is a Point of Influence? POI for Short
A point of influence (POI) is an individual or group of individuals located within your go-to-market channel. They influence the flow of your products downstream to the end-user. They affect the success of your sales and marketing efforts.
The goal is to grab more of their mindshare (and wallet share). To do this, you’ll need to consider what motivates them. Help them, help you.
Salesforce research found that B2B buyers prefer manufacturer partners who understand their business goals. These manufacturers should be willing and able to provide a strong partner experience.
The more personal and granular you can get with your partner knowledge, the more you can add value to their side of your business. This will improve your relationship with them.
POI #1: Manufacturer
Who’s the target audience?
At the top of the channel, we have you, the manufacturers.
- Your first line of POIs are your salespeople or Manufacturer Reps (MFG Reps).
- Sales reps are a captive audience—they’re your employees, after all.
- MFG reps work for independent agencies. These are “middlemen”. They serve you by making introductions and connections between your product and the customer. MFG reps are well-connected, using their existing relationships to grow your business.
What’s their influence?
Let’s keep it simple: your direct sales reps are the ones selling your products for you. There’s no one else competing for their time (beyond, say, their family), and they’re focused on you and your products.
This singular focus is their strategic benefit. If they’re good, they’re valuable, easy to reach, and cost-effective.
Where they’re limited is in their reach. They have opportunities to sell down to the third rung of your channel, but most of the time they’ll sell to your distributors in Rung 2.
Manufacturer reps influence your business through their relationships down-channel. Their wealth of experience with these partners requires less cold calling. They may even have more built-in credibility than you or your direct sales team.
Their currency is manufacturer mindshare. This can be valuable when trying to enhance your channel partnerships.
POI #2: Distributor
On the second rung of the channel, we have major distributors / wholesalers.
Who’s the target audience?
There are a few potential cohorts in a distributor target audience. These are:
- Principals (owners)
- Branch Managers
- The Sales Organization
- Inside / Counter salespeople
- Outside salespeople
- Business Development Reps (BDRs) / Customer Experience (CX) teams
What’s their influence?
Distributor principals focus on business growth and prefer significant incentives over small rebates. They have a strong influence on product flow and require approval for any channel incentives targeting their employees.
Branch managers aim to meet sales goals and KPIs, acting as "mini-principals" for specific locations. They value morale-boosting programs and incentives that offer unique experiences or team-building opportunities.
Counter/inside salespeople, being lower-paid, are motivated by financial incentives. They play a consultative role with niche expertise and respond well to "sell this, get that" incentives, effectively promoting specific products.
Outside salespeople handle larger accounts and are motivated by commission. They maintain key relationships and thrive on competitive sales incentives.
BDR/CX roles focus on growing smaller accounts. They are motivated by salary and benefit from programs targeting training and specific behaviors, crucial for creating a strong branded customer experience.
POI #3: Dealer/VAR/Contractor
At the bottom of the funnel, we have smaller market dealers or general contractors. These are the players who put your products into the hands of their employees and the homes of end-users. This rung marks the end of your channel sales process.
Who’s the target audience?
The target audience at this level is often the principals of these smaller firms. They are the techs who are buying your products ad hoc to fill in the gaps of a given job. They are architects who spec your products into their jobs.
What’s their influence?
Contractor Principals are the owners of a given dealer or contractor. They have a lot of say over their purchases for their jobs and buy from 4-8 distributors at a time. This means that they have a lot of discretion in the way they buy.
Reaching them often means building mindshare and rewarding them as easy as possible.
Architects are usually only employed for bigger commercial or industrial projects. They are looped in on jobs by a general contractor.
They have to get down to the product level for their design specs, often. They could have more influence over these purchasing decisions than the principal, sometimes. This is the case if a product has to be designed or “spec’d” in.
Techs are contractor employees who work for the principals. While they don’t have much of a say over large purchase orders, they can be influential with smaller purchases like parts and supplies.
In these cases, they may not even have to check with their principals before making a purchasing decision.
Identifying the Challenges of Each POI
Understanding and effectively influencing Points of Influence (POIs) in a channel involves navigating their often-indirect involvement and varied roles. To extend your influence, you must address challenges such as pricing pressures, product commoditization, and limited visibility into partner behaviors. By answering key questions about partner types, their actions, market contributions, and how they add value to your offerings, you can tailor a more targeted strategy.
Data Collection and Business Intelligence: Gathering meaningful data from lower channel tiers like contractors and installers can be difficult. While distributors and dealers can provide secondhand insights, this often results in incomplete data and may increase their workload, risking pushback. Implementing an integrated ERP, CRM, and marketing technology system is essential but rare, offering streamlined data management and better insights into partner activities.
Administrative Burdens: The requirement for proof of purchase from contractors or distribution partners can be cumbersome, leading to errors and dissatisfaction. Simplifying these processes is crucial to prevent disengagement and data collection delays, which can undermine channel relationships. Reducing administrative tasks can help retain focus on core revenue-generating activities.
Breakage Management: The concept of breakage, where points or rebates go unused, should be managed strategically. Ensuring program hurdles are not overly challenging is key to encouraging participation. Breakage tends to decrease as programs mature, with clear goals and timely point distribution fostering engagement and reducing unused incentives.
Distribution Partnerships: Collaborating with distributors involves sharing value-adds and loyalty, which can dilute influence. Developing compelling pitches that highlight mutual benefits can ease administrative burdens while preserving operational capacity. Balancing these partnerships requires careful negotiation to maintain both data collection goals and distributor satisfaction.
Engagement and Mindshare: Maintaining engagement across a diverse channel network requires ongoing support, training, and incentives. Differentiating your offerings through unique features and benefits is crucial, particularly in industries with discretionary spending. This approach helps capture mindshare and build loyalty throughout the channel.
By understanding partner dynamics and striking a balance in your strategies, you can effectively address these challenges and foster stronger channel relationships.
How to Reach and Influence Each POI
To effectively reach and influence Points of Influence (POIs) in a channel, employ targeted strategies using MDF and Co-op funds, training programs, sales incentives, and loyalty programs, all underpinned by data-driven approaches and technology integration.
MDF and Co-Op Strategies: Leverage MDF and Co-op funds to influence distributor principals by focusing on ideation and promotion strategies. Use campaign management tools to maximize fund utilization, coordinate marketing initiatives, and empower distributors. Highlight the benefits of joint marketing campaigns, events, and training initiatives to articulate the value of these funds.
Rebates and Data Utilization: Use rebates selectively to compete effectively in the channel. Collect and analyze data from invoices to benchmark pricing, understand customer costs, and identify product sales ratios. Implement check-and-balance methods to ensure rebate accuracy and optimize data processing systems to enhance customer experience and decision-making.
Training and Enablement Programs: Empower distributor sales reps with comprehensive training on product features, benefits, and competitive advantages. Incorporate data analysis into training to provide insights on market dynamics and customer preferences. Use interactive e-learning platforms and gamification elements to enhance engagement and knowledge retention.
Sales Incentives: Develop structured sales incentive programs with clear targets and rewards, such as a President’s Club-style travel reward. Align incentives with sales objectives to motivate salespeople and encourage revenue growth. Utilize tiered commissions, performance bonuses, and contests to stimulate competition.
Loyalty Programs: Foster loyalty among manufacturer reps and dealers by offering exclusive benefits, training, and marketing support. Use data from contractors and dealers to inform MFG reps and sales strategies. Design loyalty programs to provide business intelligence and a holistic view of the product journey, enhancing partner relationships and identifying strategic gaps.
Targeted Sales Incentives: Influence distributor principals and salespeople with targeted incentives for specific product categories. Utilize data to understand product performance and customer preferences, enabling tailored incentive programs. Segment distributors by criteria such as sales volume or location to customize incentives and strengthen partnerships.
Integrating these strategies with robust data analytics and technology will optimize influence over channel partners and drive sales growth.
Putting the Channel Incentive Program Together
Figuring out who the point of influence is and what opportunities there are to grow is only the first step of the process. The next step is determining goals.
If you’re ready to start the channel program conversation, book some time with us here.
