Channel marketing is one of the least well-understood aspects of marketing. Some of the confusion comes from the fact that for marketers, channels tend to be media such as email, magazine advertising, telemarketing, and so on. Channel marketing, however, does not refer to these marketing channels; it refers to sales channels such as retailers, catalogues, websites, door-to-door sales and events. On the B2B side, it is typically direct salespeople, websites, or channel partners.
Over the past two or three years, the demands of the recession have increased the importance for many B2B marketers of using channel partners. At the same time the rise of social media has presented many opportunities for conducting channel marketing more effectively.
However, channel marketing is an unfamiliar area to many B2B marketers, and they are discovering that while the rewards for getting it right are significant, the penalties for getting it wrong can be severe.
As marketing budgets have dwindled – or in many cases plummeted – since the end of 2007, more B2B marketers have had to cut their direct sales forces. As a result, many have increasingly looked to their channel partners to bring in the sales. Tony Phillips, head of client services at specialist channel marketing agency JJ Marketing, says, “The recent recession has undoubtedly increased uptake in channel marketing. We’ve seen it happen through the work we’ve been doing for British Gas Business in creating innovative and engaging broker incentive schemes. They have recognised the importance of the broker channel and put some serious resource behind it.”
At the same time the arrival of social media and new digital formats has created new opportunities for engagement and interaction, allowing vendor brands to get closer to their channel partners.
Maeve McDonald, CEO at channel marketing specialists McDonald Butler, comments, “Social media has introduced a whole new way of communication. Marketers can use blogs and podcasts for training their channel partners. They can use social networks to keep them updated on company news, product developments and marketing offers. They can also encourage their partners to use social networks as a way of engaging with their customers. Social networks lay bare the thoughts of a live audience, and marketers who work alongside channel partners can have more ears to the ground.”
Supporting partners via social media
German ERP vendor, SAP, recently invested in a major education programme to demonstrate to its channel partners how social media can be used. Commenting on the venture, Hardy Poppinga, VP of volume and eco-system marketing for EMEA and India at SAP, explains,”Our partners were very keen to start using Web 2.0, so we set up a social media programme for them. We worked with our agency, DNX Marketing to provide online guidelines and a Q&A, for which there are now 300 partners registered. We run monthly webinars where we bring in social media experts to advise on subjects, such as how to build your online reputation.” He reveals that SAP get approximately 1500 attendees at the monthly webinars.
Poppinga goes on to explain that, crucially, partners were set monthly tasks, so they could start to get involved in social media straight away, and this has resulted in 150 pieces of activity such as blogs, LinkedIn discussions and tweets.
Poppinga concludes, “Successful channel marketing is all about keeping it simple and treating partners as individuals. Social media allows you to create campaigns that are both simple and individually tailored, and for that reason I expect it to play an increasingly important role in channel marketing in the months and years ahead.”
Building partnerships
New opportunities always bring fresh challenges, and it is important to ensure that you use social media correctly in your channel marketing. Failure to get it right can be costly. While a channel partner can be a source of significant sales, it can also be a source of brand damage, wasted resource, and in the worst cases legal action.
The first principle of channel marketing has always been that it should be a partnership, and the arrival of social media has not changed this. As Tracey Fielden, head of channel marketing at Canon UK, explains, you need to work hard to build mutually productive relationships. “It’s vital that you provide partners with valuable tools and resources, as well as opening up additional access to third parties such as agencies,” she says.
She continues, “For example, through the online PartnerNet we give our partners marketing materials and sales collateral, as well as service and support details. They can use templates to create tailored mailers such as that a partner recently used to invite their customers to print trade show IPEX. This enabled the partner to easily target customers and raise awareness of their stand at the show.”
Considering options
In the same way, it is important to consider all available channels. Whether it is social media, online events and video, or just traditional weekend conferences, there are many ways to engage your channel partners. Consider all your options and ensure that you make the most of what is available. For example, many B2B marketers assume that Facebook is purely a consumer communication channel. According to an IDM survey in February 2010, 52 per cent of B2B marketers use LinkedIn but only 27 per cent use Facebook.
As Neil Fox, Strategy Partner at direct-to-digital agency TDA, comments, “While Facebook accounts for the majority of social networking activity, it’s also the network that is the least understood and used by B2B marketers. They’re missing a trick here, especially when it comes to communicating with channel partners, many of whom are far more likely to spend time on Facebook than on LinkedIn.”
Building trust
Trust is an essential component of channel marketing. However, trust must first be earned. One of the greatest dangers with channel marketing is that because you are delegating the communication of your brand to a third party, your brand can be misrepresented. As Martin Brindley, managing director at marketing agency DMG Europe, points out, “The addition of a channel partner means that you have an extra point where the message can be distilled if not managed correctly. Some companies use a two-tier channel, which removes you even further from the delivery of your message.”
This danger is intensified with the arrival of social media. One of the strengths of social media is that it provides opportunities for ongoing, ad-hoc engagement with customers, but this is also a potential weakness. These frequent, quickfire, more casual interactions can easily stray off brand, and so you need to put in place stringent safeguards to ensure that your partners firstly understand your brand, and secondly know how important it is to remain true to it.
Another option that you might want to consider is introducing a mystery shopper programme. More than anything else, however, you should demand complete and clear reporting. As McDonald concludes, “It is vital that your partners are selling you correctly. Many organisations give marketing funds to a partner marketing pot without ever really knowing what it was spent on and what, if any, the results were. In order to retain control, you must have 100 per cent visibility as to what your channel partners are doing and understand how they are generating and nurturing leads.”
