The decision to establish a channel, reseller, agency or franchise network is typically driven by the attraction of leverage.
The executive expects that the financial return from leveraging the sales and delivery capability of third parties will offset the significant management load that establishing and supporting a channel represents.
Dalsuit have developed a number of services to assist our clients in getting this process right.
Channel strategy – structure and objectives
The channel strategy defines the structure and the business benefits to all parties involved..
Decisions need to be made regarding the expected return over time, legal relationship, warranty responsibility, support, incentive programs, recognition and tiering of resellers within the program.
Managing the channel
Managing a channel compromised of a group of independently successful business owners requires a transparent approach supported by a clear set of business conduct guidelines. Examples of areas that this needs to cover include:
- Providing support for proactive resellers balanced with an expectation for equal treatment by the others
- Resolution of prospect and territory contention between resellers
- Retaining a direct sales force who service certain clients directly at a price point that the channel partner cannot compete with.
- Recruitment and training of sales people who can engage effectively and leverage the channel.
The decision to franchise requires careful consideration on timing and form.
- Too early in the life cycle of the franchiser business will result in less attractive sale prices to fewer numbers of potential franchisees.
- Too late and the franchiser may face significant competition from firms offering similar opportunity in a commoditised market.
Dalsuit assists with advice on timing, co-ordination of legal and financial structure, development of pre and post sale franchisee package, documenting of the operations manual, negotiation, training and periodic reviews.