Relevance

Everybody wants to be relevant.

Every organization needs to be relevant.

People don’t often think of the competitive nature of charitable organizations. They fight every day for donations against other equally deserving charities. The way to get to the donations is by becoming relevant; not only at a macro level, but more importantly at a micro level. By making it personal, you establish relevance. People are more disposed to support charities that serve a personal need. It might be cancer, poverty, AIDS, or the mentally challenged. All of these are deserving of support, but people will more than likely contribute to a cause that has touched them personally.

Every organization fights for relevance, because that is how you achieve mutual commitment, mutual growth, mutual profitability, and brand.

When you sell through independent channels, you have to focus on relevance. Your channel organization should be built on the premise that you want to constantly increase your relevance to not only your entire channel community, but to each of the individual partners, as well. It why you have to be bigger than the widget and it is why your communications plan needs to be better than your competitors.

As you increase relevance you create need and, in turn, that need builds switching costs. Your channel relationships develop roots and competitive barriers. Ask yourself, “How relevant am I to each and every one of my channel partners?” If the answer is not as positive as you would like, consider what you have to do to increase your relevance.

Content, Consistency, and Calendar

I like to think of things in small groupings. It makes it easier to remember, but I also think it makes it easier to communicate and evangelize. For example, there are four relationship principles (mutual commitment, mutual growth, mutual profitability, and brand), there are the four Rs of co-marketing (recruitment, return, retention, and referral), and now I want to introduce the three Cs of channel communication:

* Content
* Consistency
* Calendar

We live in a noisy world. Mass media advertisements on TV and radio, email, spam, blogs, RSS feeds, and social networking all contribute to the noise. What has changed is that the audience has the power. There are so many options from which to choose that your customers select what gets through…at least most of the time.

Channels are no different. There is so much information coming in, that they put a very discerning eye on what they view or hear. As a channel leader you have to get past the noise. You have to get to your audience, but you have to do it with permission. This is why spam does not work. There is no permission.

If you have quality content, you can get through. Remember, though, that quality is in the eye of the receiver, not the sender. I might post something on this site that I think is insightful or humorous, but if you don’t agree, it is irrelevant. I believe in personalization and variable content applications, because it will help make your content relevant for each individual recipient.

It is not enough to do something once. One base hit does not a Hall of Fame career make. If you are going to invest in a communications platform for your channels, it must be sustained. If you have quality content that is relevant, it will catch on. It might take some time, but it will stick and likely spread over time. Content without consistency is frustrating.

Let your channel audience know what is coming. Set an agenda or a calendar. If you are doing webinars, give them the “showtimes” in advance. Let your audience set future events. If your partners know and expect that your quality newsletter, teleconference, or webinar is on the first Monday of each month, you just might be able to build anticipation.

With scheduled, consistent, and high quality content, you can build an effective communications platform that will help you get through the noise.

Hey…remember me?

One of the biggest challenges facing a channel organization is your ability to effectively reach your channel audience in a consistent manner. Consider a company that has 2,000 channel partners spanning all 50 states. They have 30 “relationship managers” all centrally located (no branch offices). This sounds like an extreme example, but my guess is that this describes many midsized companies.

We should all agree that face-to-face interaction is the best. There is really no substitute for meeting with your partner on a regular basis. The challenge is that with 30 relationship managers, each would be responsible for 67 channel partners on average. It is time and cost prohibitive to have face-to-face meetings as often as necessary to build more meaningful relationships.

Thank goodness for technology. Many companies are using technology to enable other, less costly, vehicles to communicate with their channel partners. You need to overcome the fact that there are indeed many companies already doing webinars, newsletters, and blogs. Somehow, you need to stand out. You need to be different, but equally effective. You need to challenge the status quo.

Recently, I was faced with this same challenge. We chose to use personalization to differentiate ourselves. Our goal is to make each of our channels feel special. Receiving a standard corporate email wasn’t going to accomplish that goal. Instead, we chose to send each individual their own newsletter, personalized from their relationship manager. As we learn more about these channels, we will employ variable content capabilities, so that every newsletter is different.

The nice thing about face-to-face interaction is that it is uniquely personal. I believe that if you cannot meet directly with your partner as often as you would like, you should not forego the personal aspect of your communication. It is a little thing that makes a big difference.

Channel Management as a “System”

I love systems. I love them because if you have a good one it can sustain your operation for a very long time. I first realized this through sports. Great sports dynasty’s all have systems. Throughout history there are countless examples of this:

* The San Francisco 49ers of the 80’s and 90’s. Their West Coast Offense was a system that dominated the NFL for over a decade.

* Duke Basketball: Their system is so refined that it impacts their recruiting. They don’t necessarily go for the best athletes, but rather they choose players that fit their system. They do this better than anyone else.

* New York Yankees: They have had a number of systems, but most recently they have leveraged their financial strength to attract top talent. On the opposite side of the spectrum is the Oakland Athletics that use a system of scouting intelligence to fill their roster with a very small payroll.

* The Triangle Offense of the Chicago Bulls in the 90’s. Sure they had Michael Jordan, but the system is now working for the Lakers.

There are many others, but this got me thinking about business and business philosophies that use systems to drive success. General Electric, Cisco, Google, and Microsoft (to name a few) are examples of big companies that have maintained their success by adhering to their philosophy over very long periods of time. Then look at Motorola, Nortel, Sun Microsystems, and Yahoo!. Each of these companies were industry behemoths that abandoned their “system” and have fallen from grace.

The important thing about “systems” is that they have to be flexible. You have to maintain the basic philosophy, but adapt to changes. Joe Montana was very different than Steve Young, but both had great success in the same system.

I believe that as a channel leader you need to build a “system”; one that is sustainable and flexible. If you are constantly tinkering with your model or changing your channel philosophy you will lose your channel partners. It is important to adjust, just don’t lose your system in the process.

Bigger Than The Widget

There are three steps required to sell into a channel. I am oversimplifying, but I think that if you follow these steps you will find success. These are linear, so you cannot do Step 2, before Step 1.

STEP 1: Sell Yourself
STEP 2: Sell Your Company
STEP 3: Sell Your Product

This is very logical if you work backwards and ask yourself a few questions. Would you buy a product from a company that you didn’t trust or believe in? Would you buy from a company that had a reputation for poor service or one that didn’t have a compelling value offer? Let’s say the company was one you respected and they had a competitive product, but the sales person was unresponsive or not keenly aware of the industry and your challenges? It is really hard for a bad salesperson working for a bad company to sell a great product.

When you build your channel business think about the people that you need to represent you and your company. Get the best channel sales people. You must then arm them with a story…a real story, not just some marketing fluff. A story about the experience the channel will have when they work with you. Back that up with an infrastructure that supports your story. Make sure your operations and service teams are in place. Make sure your marketing programs reinforce the story and make sure your executive team is your top evangelists. Make your product bigger than the widget. Create switching costs through your sales excellence and channel support infrastructure. De-commoditize your product.

It is just simply not enough to have a great widget, because the product is really much more.

Grassroots or Mahogany Row

Channel management is not a marketing function. Sure there are marketing components, but there are also operational, financial, sales, and other considerations as well. I find that channel organizations tend to reside under Sales or Marketing…which is fine. It has to sit somewhere after all.

The issue is that because your business…your entire business…is dependent on your go-to-market model, you have to have alignment in the way in which you manage your channels. It is not enough to simply build a channel program, assign quota to a few sales representatives, and expect extraordinary returns. There is a cultural element that needs to be taken into account.

Senior management (Mahogany Row) needs to be on board with your plan and evangelize the vision, both internally and externally. Likewise, the team of people needed to effectively implement the plan need to not only be on board, but also enthusiastically share in the success. Many people will point to the sales teams and decide that their support is all that is really required. It is certainly important, but if you do not have the finance, accounting, marketing, and operations teams in full support, you’re probability of success will be greatly reduced.

Part of your job as a channel leader is to represent each of your channels individually and all of your channels holistically to your internal audience. It is always exciting to get the endorsement of the bigwigs on the top floor, but don’t discount your need to build cross functional teams with the people that make the day-to-day successes.

Channel Partner vs. Fulfillment Partner

Many companies have a direct and an indirect sales model, which will inevitably create some channel conflict. I am not suggesting that you have to choose one or the other, but rather that when you have both you will have to be aware of and mange channel conflict. This becomes a business issue…not a marketing issue or a channel issue. It is a fundamental and strategic position that you have to address as a company.

While at a technology company, our direct sales leader preferred to use the channel as a “fulfillment partner”. His view was that his team would get the deal and hand it off to the channel for fulfillment. In a perfect world, we would also provide the service. The fulfillment partner would get distributor pricing and whatever margin the deal was sold at. Hmmm.

The same direct sales leader suggested that the channel should be used for “unaided business” only. He described this as business that “just happens”. I, for one, have never seen business that “just happens”, but would love to find it. Unaided business is now one of my favorite oxymorons.

The reality is that the channel wants to have a thriving business, as well. You will be hard pressed to find a channel partner that will be willing to just fulfill an order for you. You will be equally hard pressed to find a channel that will accept responsibility for unaided business. Besides, if there was such a thing as unaided business, why wouldn’t the vendor do that direct and get the entire margin?

The BIG question that a company needs to answer is one of customer relationship ownership. Does the channel own the relationship or do you? Is there a way for both you and the channel to have a relationship with the customer? Sure there is, especially now. If you choose to have both a direct and indirect go-to-market model, you must set boundaries and procedures and follow them. Perhaps a Channel Bill of Rights as part of your channel program is required? Whatever your strategy, you must adhere to the fundamental principles of mutual commitment, mutual growth, mutual profitability, and brand.

So What?

Never stop asking yourself, “So what?” If your marketing material says something like the following…

* Dual Fast Ethernet Router with 2 WAN Interface Card (WIC) Slots and 1 NM Slot
* Memory upgrade for both Flash and DRAM: (32-MB Flash and 128-MB DRAM)
* WIC-1ADSL

…you should ask yourself, “So what?” I don’t know what any of the above means, but I am sure it is important. However, it doesn’t tell a story. Does all of this mean that the router is the fastest? Is this router the most reliable? It is a mistake to assume your audience can make the leap, no matter how obvious it is to you.

The iPhone is a great product and has all of the bells and whistles, but the story being told is one of lifestyle, not features. It promises that if you have an iPhone, you are in some way cool. They have answered the “so what?”

When you work with a channel you have to help them with the story…with the “so what?” If you don’t, your product will get jumbled in with all of the other routers, cell phones, and USB headsets. Why is yours better and why should anyone care?

Never Would Have Guessed

Much of your channel marketing will be in the form of storytelling. Seth Godin’s “All Marketers Are Liars” is a great read and stresses the importance of storytelling. I think the real challenge is that you have to have more than one story. Your story will be different depending on your specific audience. What you say to an existing, loyal customer will likely be very different than what you say to a reluctant prospect.

Since your channels all are different in at least few ways, you will need to adjust your story appropriately. For example, an “Up & Comer” will require a very different marketing approach than a “Fader”. But it goes beyond that. Geography, size, history, and culture will have a say in the matter. Business performance and company goals will also need to be considered. Don’t assume that you have a one-size fits all story that everyone will readily accept. Trust me…you don’t.

I once surveyed a group of small resellers across the country. One question we asked was, “What keeps you up at night?” We expected to hear about competition or hiring and retaining a competent workforce or customer retention. Sure all of these were important, but the #1 concern on their mind was “making payroll”. Surprising, but refreshingly simplistic. The story we were telling about product features and price points wasn’t directly addressing their top concern. By adjusting the conversation to one of cash flow, we were able to better position ourselves within those channels.

Knowing your channels, their motivations, needs, and drivers will enable you to create authentic stories for each of your partners.

Channel Lifecycle Curve

Not every channel will be in the same lifecycle stage. Depending on how you choose to look at your channel community, you should be able to plot each of your channels on a bell curve. Most recently, working with Relationship Marketing in Des Moines, IA, we built a tool that enables us to look at our channel community across approximately 15 variables. We have chosen to plot them on the bell curve as “Up & Comers”, “Steady-Eddies”, and “Faders”.

The types of programs and investments we make are directly tied to where the specific channel sits in the lifecycle. For instance, an “Up & Comer” would require a very different investment strategy than a “Fader”, with whom we may choose to divest our relationship.

Analytics are very important in this process. It is not enough to subjectively try to place each channel on the curve. You will find too much bias and an inaccurate assessment. Also, using the quantitative analysis will enable you to track the movement of each partner over time. This is another way to track and gauge your success.

Co-Marketing Made Simple

I have seen many Co-marketing programs with many different components, requirements, rules, and procedures. These programs, sometimes called “Co-op” or “Marketing Distribution Funds (MDF)", have become tablestakes in many industries. At a previous employer the co-marketing program became extremely complicated and frustrating for the channel partners. I don’t think that they need to be complicated and that by focusing on the Four R’s, you can build a compelling co-marketing program with your channels. The Four R’s are:

Recruitment
Return
Retention
Referral

While your channel relationships should be based on the four Relationship Principles, your tactical co-marketing goals should be structured to drive results with the Four R’s.

Recruitment is the goal supporting of your channels need to expand their customer base. Lead generation is almost universally included in co-marketing programs, but not always as effective as perceived. You must help drive demand for your products and services for the benefit of your channel partners.

The now new customer must Return. They have to have a great experience with the product and your channel partner. It is not enough to get the customer in the door through your recruitment efforts…you must get them to want to return.

You have recruited a new customer; they have had a great experience and have returned. Now you want to build life-time value with the customer. It is not enough for them to come back once. You want them as a loyal customer that looks to your channel as their first option. Retention is paramount to achieve sustained profitability.

Customers are your best sales force. Referrals will drive not only more business, but better business. Customers that volunteer support for you and your channel are incredibly valuable. You must support this community and enable them to tell your story in the market.

Simplify your co-marketing program by adhering to the Four R’s and you will drive new customers to eventually be your storytellers. Your message will become viral and you will forever have a committed channel partner community.

How Good Are You?

When I was in business school there were many discussions about benchmarking. The idea was that you took a look at the best company in your industry and used them as the basis for achieving a level of excellence. If Company A provided the best customer service in your industry, then they would be the benchmark for customer service.

Sorry Professor’s, but you got it wrong.

Let’s say you work in insurance and one of your agents is at a cocktail party with some friends and the topic turns to customer service. Are you confident that, when asked, your agent will say that your company provides the best customer service? Or will they have another answer, like Barnes & Noble, or Google, or the carwash down the street? Today, benchmarks go way beyond your particular industry. Your competition is everywhere. If you want your story to be told and spread, you compete with everybody.

Customers have all the power. They know that they can get any product at any time. You simply have to be better. This is especially true when managing your channel relationships. They have choices, so your story (which includes the WHOLE experience) must be extraordinary and beyond what is “expected” in your industry, because they will compare you to everyone.

What Would You Spend?

Let’s say you had 1000 channels in your community, but that the top 10% were the most valuable. These are the one’s that follow the Four Relationship Principles: Mutual Commitment, Mutual Growth, Mutual Profitability, and Brand. These are the partners with whom you want to build your business around and the one’s in which you want build your share of wallet. Inevitably, you will need to decide the affordability of your channel relationship program(s) and make tough choices about the elements that stay and the elements that go.

Recently, Starbucks closed all of their stores (everyone of them) for three hours. They did this for training. When you do some reverse math, I estimate the total cost of the training to exceed $24 million. Seems like a lot for barista training. But, again using some best guestimates, it is really only about $100 per employee. When you consider that the training gets passed along to customers in the form of improved service, the investment is less than $1 per customer. Is it worth it?

If your Top 100 is the best of the best, then your investment in those relationships is paramount. It is not some tangential marketing program, but rather an integral part of your business strategy. Is $10,000 per partner too much? What about $50,000?

I think that if you frame your investment decision around the investment per channel, you will be able to find the investment required to build your channel relationships. While the correct answer is, “I will invest whatever it takes”, the reality is that you will need to convince someone to give you a bucket of money. The overall spend may look large, but on a per channel basis, the investment will seem reasonable.

Now that you have your money…you better be able to measure your results.

Value vs. Volume

Has your partner ever asked how they can get a bigger discount or higher commission? My guess is that most respond with something related to their sales volume. Maybe the partner has to reach a certain volume to get a price break or a larger commission. Does this make sense? The answer is probably “yes” and “no”…although, I am leaning towards “no”.

Since your channel represents your company and your products in the market, they are in essence representing your brand. The experience they receive will be directly transferred to your brand. If the customer has an excellent experience and receives great service from your partner, it will have a positive effect on your brand. Unfortunately, the opposite is also true. If a partner doesn’t return service calls, or doesn’t live up to the Service Level Agreement, or is not fully trained on the product, your brand will suffer.

What, then, is the best way to structure your financial incentives? Should it be based on volume of business that partner does with you? Does the end user care? Or, should it be based on the “value” that partner offers the end user? Should it be more about the end user experience or more about the transactions between you and the channel?

Value is more important than volume. Can you structure your incentives around channel competency and service capability? Yes, you can. Is it harder than building price breaks based on volume? Yes, it is. Is it worth the extra effort? Yes, it is.

Brand – Principle IV

Every relationship has a label – a brand. It might be “best friend”, “fishing buddy”, “confidant”, “lover”, “mentor”, or numerous other labels that give meaning to a relationship. These brands make it easy for us to explain our relationship and for others to appreciate it.

Channel designations are an important “brand” component to channel relationships. Many companies choose to use precious metals (platinum, gold, silver) and others use gems (diamond, ruby, sapphire). There are countless labels that can be used, but the branding that goes behind the nomenclature is extremely important because it lends credibility and an endorsement of the partner to the end user.

The designation represents that one party in the relationship has achieved a certain status and that the achievement represents value to the end user. When an end user is sourcing a product they want to work with a channel that has demonstrated some commitment to the product and worked to achieve a level of competence in support of the product. The designation enables them to market and differentiate themselves from their competitors.

Would you rather buy from a Platinum Partner versus another that did not carry an equal designation?

The company providing the designation must establish a tiered structure of requirements and then provide marketing support behind the designations they offer. It is important that a significant amount of equity is built for the designation, or channel relationship, brand.

Achieving a Microsoft or Cisco designation has value for the reseller and creates a competitive advantage for them in the market. The designation equity is also extremely important to Microsoft and Cisco because the reseller will invest thousands of dollars into achieving the designation, thus creating switching costs for the vendor.

How you structure the designation program in terms of requirements and benefits will be discussed later, but a focus on end user value is critical. The days of volume based designations are over, because they offer very little to the end user…the brand becomes meaningless.

Relentless Discomfort With The Status Quo

Ahhh…election season and the inevitable chorus of “change” is bellowing from the camps of each presidential hopeful. Even our sitting President said that if he were running again, he would base his campaign on change. So why are we so willing to demand change from our elected officials, but reluctant to embrace change at work, or at home?

Two reasons come to mind. The first relates to the level of personal investment involved in driving change. When we elect a President based on a mandate of change, our job is basically done. There is only so much we can do to be actively involved in changing healthcare policy, economic policy, or homeland security. We trust our elected officials to hold true to their campaign promises. We really do not get involved again until elections roll around four years later. Conversely, at work (or home) we are expected to be actively involved in implementing the new ideas, or new process, or new technology. This can be disruptive and there is no guarantee that it will be effective. Besides, we think, how bad are things anyway? Do we really need a change?

That brings me to my second reason for reluctance. Change carries a somewhat negative connotation in the workplace. I prefer to use “renewal” instead of “change”. You change when things are bad, but you renew to do better. In fact, I would argue that even the best of the best go through periods of renewal. Tiger Woods and Jack Welch would not have reached the top levels of success without constantly renewing their approach to golf and business, respectively. The best of the best do not rest on their laurels – they look for better and more efficient ways to achieve success.

I heard a phrase a few years ago that stuck with me: “Relentless discomfort with the status quo.” I wish I could remember where I first heard it so I could give proper credit where it is due, but regardless, it is a great expression of renewal. The best are never really satisfied, never comfortable with the status quo. Our country’s founding fathers, Albert Einstein, Martin Luther King Jr., Henry Ford, and even the person that invented the “sippy cup” all realized that the status quo wasn’t good enough. They knew that through their discomfort they could find a better way.

Changing the status quo comes with plenty of risk and many will pressure you to keep things as they are. Usually the pursuit is worth it and sometimes the payoff is enormous. Every industry is competitive and working to tip the balance in your favor by challenging the status quo can be what separates you from the pack. Are you willing to take the risk?

Mutual Profitability – Principle III

This is the probably the easiest Principle to “get”. We always hear about a win-win situation during negotiations, but this is a little different. A negotiation or a contract is just one thing. It is not a relationship. Many would argue, in fact, that trying to find a “win-win” scenario is not always the best thing to do during a negotiation. Regardless, a relationship is more than one thing…it is a lot of one-things strung together. In a relationship, mutual profitability is essential.

One sided relationships never work…at least over the long haul. Both parties must be getting something out of the relationship. It might be financial profit, an association with another company, hard work, great service, or a great product, but any lasting relationship will have something for both sides.

Like with growth, it is in your best interest to help your partner gain mutual profitability (however they define it). Ultimately you will gain from their profitability, as well. Likewise, you should expect, even demand, that you are getting what you need from the relationship. It doesn’t matter is you are the supplier or the buyer, you should not waiver from your commitment to profitability over the long-term. Do you really want a partner that is not committed to your profitability?

When you have partners that are truly invested in each other, there is the opportunity to celebrate successes and support each other in the market. Through mutual profitability comes excitement and opportunity.

Do you want a horse? How about two horses?

On my phone LCD the name of a product GM appeared. Must be important if he is calling me directly.

“Hey Al, what can I do for you?” I asked helpfully.

“I need a program to get rid of some inventory.”

“What kind of program?”

“The kind that gets rid of inventory.”

“Why do we have so much inventory?”

“Because we couldn’t sell it.”

“So, you think a marketing program will get rid of it?”

This was a very real conversation that I had with someone that I respect tremendously, but he always wanted to push his product through the channel at all costs. The problem that he had was that he had a product with no demand (hence the excess inventory). A marketing program (or Ginzu knife special) was not going to solve his problem. What he needed was a better product that fit the needs of his customers.

If somebody offered to sell me a horse, I would say no. Why? Because I don’t want a horse. If he then said that he would give me two horses for the price of one, I would still say no. I simply do not want a horse, no matter what deal you offer. It is an issue with demand, not price. Besides, if it was a price issue, why not just lower the price?

Sometimes we expect our channels to make up for our own problems. Shifting a demand related problem to the channel only stuffs the channel and pushes the issue further down the chain. It will not only not solve your problem, but quite possibly create longer lasting and bigger problems with your relationship.

Mutual Growth – Principle II

Ben Franklin once wrote, “Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”

Growth within your channel community can come in a variety of different ways. Certainly revenue growth is important, but so are increases in technical certifications, expansion of the portfolio mix, shorter lead times, and other operational efficiencies. Each of your partners will have different capabilities, cover unique markets, and have their own needs. Your growth initiatives should be designed and customized for each of your channel partners.

There is, of course, a selfish element to driving channel growth. Simply put, it is in your best interest to support the growth of each your channels, because that is how you will meet and exceed your objectives.

Growth will also drive gains in your channel share of wallet, making you increasingly more important to that particular partner. Growth will create switching costs (think about the training investment required for technical certifications) making your position with the channel more indispensable.

Relationships rooted with this principle will thrive; those content with the status quo will become stale and eventually deteriorate.

Say What?

A few years ago my son was selected to be on a “competitive” soccer team. He was eight. This is one where the parents were very involved…maybe too involved. The coach asked us parents to stay away from practice for the first couple of weeks so that they could establish some rapport with the kids. One evening I showed up to pick up my son and the coach had them all gathered around in the center of the field giving a somewhat animated speech (or lecture). I couldn’t hear what was being said, but there were 30 eight year old boys staring at this guy like he was Knute Rockne.

On the way home I asked what the coach was saying and my son said, “It was nothing.” Now I know it wasn’t “nothing” so I pressed him a bit and finally he said, “Well I didn’t really get it. He said we needed to put stuffing in our shoes.”

So far this team had tapped me for uniforms, warm up jerseys, coach’s fees, and about six hours a week. I wanted to know more.

“He said that last years team won the state championship and that we needed to work hard to be as good as they were. He said that we needed to stuff our shoes.”

Huh?

I sat on this for awhile until I finally got it…

“Did he say that you had big shoes to fill?”

“Yeah, that was it!”

Remember your audience. Effective communication is critical, but needs to be tailored and customized for your audience.

Some people say that if they ask me what time it is, don’t tell me how the watch works. Fine, but some people want to know how or why…make sure you know what they really want.

I am happy to report that there were no reported blisters or broken toes.

Mutual Commitment - Principle I

“For better or worse.”

For most of us these are the four words that define mutual commitment in a relationship…especially if you are married. It represents the unconditional commitment to the relationship regardless of the circumstance or situation. It means that come Hell or high water, I will be by your side fighting to the bitter end. When the commitment is broken, so is the relationship. When one party is no longer willing to be by your side, for better or worse, then you no longer have a good relationship.

As I have probably mentioned earlier, there is no such thing as a perfect relationship. If we, however, are trying to build and grow our relationships to become as close to Utopian as possible, then it is reasonable to say that one of the basic relationship principles is Mutual Commitment.

There are many ways that Mutual Commitment gets represented in a channel relationship. It can range from exclusivity or preferred vendor status to access to product trials to co-marketing. The point is that both companies become invested in each other beyond financial terms. They have an emotional and sometimes passionate relationship with each other. To some extent their brands and brand equity are connected…there is an association and link between the two companies.

There is a lot that goes into getting to this point in a relationship. There will be dates, doubts, and perhaps some diversions. Investment of time, money, and resources is necessary, but the payoff can be tremendous.

As you consider how to build your channel you should consider this level of commitment as a goal and invest in plans to move you in that direction. An individual will not make this happen on behalf of an entire organization; rather the entire organization must be committed to make it happen.

Relationship Principles

A co-worker/friend of mine and I were at a large telecommunications company a few years back and had the challenge of re-working the channel program. Rest assured this was a huge task littered with internal political battles, a company accounting scandel, and an antequated program as a starting point. What to do?

We spent a lot of time discussing relationships. My wife asked me at one point what I was working on and I proudly said, "Relationships!". She asked, "What the hell do you know about relationships?" OK...fair point. My colleague and I did, however, come up with four basic prinicples that guide effective relationships...whether business or personal. These are:

Mutual Commitment
Mutual Growth
Mutual Profitability
Brand

I'll expand on each of these later, but the adherence to these prinicples will guide you on how you build your channel program and develop long lasting relationships with your partners. Interestingly, after I left the telecommunications company I went into a niche insurance market with the goal of building better relationships with independent insurance agents (our channel). Applying these same prinicples worked. It is my belief that they transcend industries.

I will let Oprah, Dr. Phil, and the rest of the daytime pundits argue about finding the perfect relationship (not possible, btw). Instead I encourage everyone to focus on these four basic principles as a way to build "better" relationships.

Why Channel Relationships?

Because it matters most. Because if you want to be successful in getting your products and services sold through indirect channels you need to understand the dynamics of the relationship more than you need to understand discount schedules, technical attributes of your product, or marketing programs. These are tablestakes...but how you manage and build your relationships will ultimately determine your success.

This blog will be dedicated to offering examples, borrowing success stories, and offering anecdotes about channels and the relationships that matter.

If you find this blog and want to share, argue, disagree, or simply wax poetic...go for it.