Manufacturers were once many steps removed from their customers, with wholesalers and distributors providing a crucial link to sales. Managing channels or distributors was never a simple or easy route to market, as manufacturers had to juggle inventory, forecasts, changing demand patterns, and evolving relationships. Although technological advancements impacted channel management, the space did not change much for 40 years. Then, during the past five years - and especially the past 16 months - the sector saw an explosion of interest in navigating the disintermediated B2B world, as all stakeholders have suddenly came to terms with a direct-to-customer world. Now, four areas that traditionally proved problematic - partners, forecasting, relationships, and changing customer demands - can receive some long-overdue improvements with partner automation.
Channel Partner Challenges
When one thinks of partners, ostensibly we think about people. But channel partners are organizations with their own agendas, problems, opportunities, and people. They are organisms that suppliers cannot control. Furthermore, these indirect sales teams may have different priorities than other vendors, as their revenue and margin targets are not limited to one single source of supply.
In the past, manufacturers overcame this with rebates, marketing incentives, or whatever could entice partner organizations to sell their products over the competition’s. The complexity and ambiguity of these relationships meant that managing a channel network was time-consuming and difficult. Managing rebate and marketing schemes alone could be extremely labor intensive, with data often siloed in different departments, providing very limited visibility for the commercial team to use to their advantage.
Manufacturing automation can easily address rebate and incentive management. Solutions like the Rebate Platform from Salesforce attempt to remove silos by extending the customer data to include rebate and incentive information. This includes digitizing manual rebate planning/pay out and secure data sharing between colleagues and the distributor network, providing data on program ROI and total transparency.
Extending visibility for partners about the supply chain, rebates, forecasting, and other attributes helps manufacturers differentiate themselves by improving the relationship with their channel partners – in effect utilizing B2C customer-experience techniques for their B2B partner network. By automating the entire promotion process, manufacturers are essentially moving the dial from a transactional to a relationship-based model with channel partners. This shift will be impactful, considering the experience expectations for the new generation of channel partners. Getting the program right is about driving partner behaviors away from the transactional/volume/discounting-based experiences of the past, and toward a relationship/performance-based, digital-first program. This ultimately leads to better engagement of the entire customer base, and at lower cost.
The ability to accurately forecast demand is paramount in sectors where the deal size is traditionally large or a business model such as construction or automotive supply. Forecast accuracy, if off by just a simple percentage point, can negatively impact organizations to the tune of many millions of dollars. The predictability of demand is enhanced by the channel network. Even with its complexity, the network can smooth-out peaks and troughs and protect the manufacturer. Sharing data between suppliers and customers is one way to improve forecast accuracy, deepen relationships, and improve the supply-chain experience, ultimately impacting the end user experience.
Traditional CRM solutions or opportunity-based models don't tend to cater for run rate or project-based business models; therefore, they need to be modified or replaced to accommodate such features. This means the visibility of sales agreements, delivered actuals, and forecasts rely on multiple spreadsheets to provide sales and operations staff with their version of the truth. Nobody can see the total picture, which makes forecast accuracy (if measured at all) somewhat of a lottery.
By combining opportunity-based business with run rate, solutions like Salesforce's Manufacturing Cloud can address these traditional CRM limitations, especially as the manufacturers' portion of the run-rate business can be substantial. These types of automated solutions can also accommodate run rate/sales/framework agreements as part of the go-to-market or supply chain model.
Improving Channel Partner Relationships
Traditionally, sales reps visited customers in person with product catalogues and/or to discuss or negotiate contracts. As this model became more expensive, companies began managing customers and partners based on account tiering. This meant only the biggest revenue generators received face-to-face service.
Today, manufacturers can utilize digital technology and automation to enhance the relationship with all of their channel partners, not just the biggest spenders. Creating partner portals or gated parts of the ecommerce platform are effective ways for manufacturers to provide all partners with the digital equivalent of brand assets, training materials, news, and detailed product information. And, since all of the information is online, channel partners can self-serve on-demand, a model that is exactly what they prefer.
Accommodating Seismic Shifts in Customer Demand
Millennials, who generally prefer a different and digital way of doing business, are now reaching positions of purchasing power. They have grown up online and are accustomed to real-time responses and excellent customer service. Millennials in the manufacturing sector demand the same B2B experience journey they’ve come to know from their B2C environment. Their “loyalty” is more experience- than brand-based, and they want to conduct business on their terms, not their vendors’ (via chat-bots, email, SMS, mobile, face-to-face, or a combination of all of these).
How that experience is defined across supply chains, pricing, sourcing and more is both a challenge and opportunity. Those organizations that are first-movers to differentiate on experience will ultimately be the winners, and it may not come at the expense of price or margin.
The past few decades have given rise to the growth of production automation, sales automation, marketing automation platforms, and more. But partner automation has become a new focus as manufacturers realize that the demands and expectations of the buyers within their channel partnerships are changing. Today, the customer experience within the dealer/channel/distributor network is more likely to impact the success or failure of a partner’s performance. By adopting partner automation, many of the manufacturer’s challenges can be resolved for everyone, not just top-tier partners. Automation can also help these networks evolve, which is an essential step for both distributors and manufacturers to respond to ever-changing customer and market demands.
Senior Management Consultant, Wipro Limited
Richard provides Wipro customers with industry vertical expertise in manufacturing and distribution. He helps companies translate their vision into digital transformations. Richard has vast experience with B2B and B2C customers including DuPont, GE, Group Rocher SA, Wolseley PLC, Wilko, Rexel SA, and Howdens PLC.
Nordics Manufacturing & Consumer Goods Practice Lead, Wipro Limited
Thomas leads the Manufacturing and Consumer Goods Practice in the Nordics providing industry vertical experience and insight. He helps customers connect strategic ambitions and challenges to the right digital solution and transformation. Thomas has over 17 years of experience in retail, manufacturing, driving strategic sales development, commercial excellence, and sales operations.