How to succeed and win deals in Asia? Part 4: Solutions to Sales Channels Development.

How to succeed and win deals in Asia? Part 4: Solutions to Sales Channels Development.

How to succeed and win deals in Asia? Part 4: Solutions to Sales Channels Development.

Jari Hietala

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I would like to sum up this article by describing for you a kind of an ideal case of a market entry via channel partners step by step. It is at the same time a list of prerequisites for success at Asian markets in chronological order.

Test Drive your offering

It all starts from a competitive offering. To win deals in Asia you must have an offering, which has some unique features and adds value to your potential end- customers. In terms of specifications you need to know if your products are acceptable at chosen markets, if the features or characteristics of your products are needed or appreciated by your customers or if the price of your offering is competitive.

We recommend testing and validating your products or services with the needs and expectations of your potential end- customers, before you start investing in time-consuming market entry operations. See an example of a multi-country Market Test Drive here: https://asianinsiders.com/portfolio/market-test-drive/.  

 

Find the Best Markets

Choose the best markets for your Asian market expansion based on facts. This goes hand in hand with the previous point of validating your competitiveness in the markets. Gut feeling is not a good advisor. Do not blindly go where many other companies seem to be going. At Asian Insiders we use proven methods to do the market selection professionally.

Learn to know your markets

Study carefully the market of your choice. Do not rely only on your channel partner. Asian Insiders typically carry out extensive research to acquire thorough market knowledge for our clients. We do not limit ourselves at desk research, but most of our work happens through meetings and interviews with potential end- customers, industry experts and opinion leaders and by utilizing Asian Insiders’ unique methodologies.

The research covers quantifying the market opportunity, understanding the market structure, growth prospects, competition, purchasing behavior and need for localization.  We also study the entire business ecosystem, end customers in different market segments, the role of authorities, etc.

One of the focus areas is the identification of targeted end- customers, as this information is critical for the Sales Funnel Management and Joint Market Development Plan later on.  

Channel Strategy & Channel Concept

Design your Channel Strategy and Channel Concept as the foundation of your market entry and channel development.  Let me elaborate on the Channel Concept and its main elements:

1. Design of Channel Deliverables

  • “Channel Concept” is based on needs and expectations of different end-customer segments on the entire purchase-delivery-usage-after sales- life cycle.
    • Particular emphasis is on gaining an understanding of the process of how your customers eventually decide to purchase a particular product or service and what kind of activities (= channel deliverables) must be performed in order to convince them to choose your offering rather than your competitor’s. Asian Insiders usually utilize for this purpose a commonly used behavioral model AIDA – Attention-Interest-Desire-Action.
      • The sales process can be seen as a series of target-driven communication activities in which the seller wants the buyer to act at the end of the process by placing a purchase order to your company – creating action (how do you make the purchasing as simple and easy as possible for your end- customers).
      • For the customer to opt for your product, he must first see your offering as the best choice – creating desire or preference (what activities do you and your channel partner have to do in order to achieve this)
      • Gaining preference is only possible after you have first made the customer interested in your products – creating interest (what activities do you and your channel partner have to do in order to achieve this)
      • The first task is to make potential customers aware of your offering, then make them interested to learn more  – creating awareness (what activities do you and your channel partner have to do in order to achieve this)
    • By acquiring knowledge on customers purchasing behavior based on Asian Insiders’ methodology, it will be possible to design necessary channel deliverables or required actions, phase by phase, to be performed by the channel partner or the manufacturer/principal.

2. Design of the “Ideal Partner Profile”

It is not enough to just list your standard partner criteria, but you need to know what activities have to be executed in order to eventually win deals together with your partner as explained in the previous paragraph. Your channel partner most likely needs to learn your customers’ expectations and purchasing behavior.

Typically, Ideal partner profile contain the following criteria:

  • The size and financial fundamentals of the partner
  • Partner’s business strategy
  • Partner’s existing product portfolio
  • Market and customer know-how
  • People and soft values incl. communication & transparency.
  • References & reputation

Partner’s willingness and commitment to work according to your strategy and channel concept. Together you either win or lose new business.

Design of a “Channel Partner Value Proposition”

  •  It may not be easy to catch the attention of the best channel partner candidates, as they already most likely represent others, too. To convince them, a good value proposition is needed.
    •  At Asian Insiders, we help you to create a “Channel Partner Value Proposition”, which:
    • Describes the business opportunity for the partner – how much money they can potentially make with you. We help you to acquire this understanding. As said earlier: you as the principal should really know the target market and not rely only on the information provided by your partner
    • Describes your approach and offering to the market
    • Explains what actions (= channel deliverables) are needed by your partner and by your company
    • Crystallizes the benefits for the partner
    • Explains why your company is the best possible choice for the partner
    • Explains your expectations for the partner
    • Explains how you will support the partner in their work

4. Channel strategy

  • Which channels do you have to deploy to be able to reach your target customers in terms of business segments and geographies? You may have to build your presence on multiple channels. For example, one distributor might not be able to cover all industry sectors. It is usually your customers who choose which channel they prefer to use – you can then make sure you have a presence in those channels.  Possible options:
    • Direct sales to Key Accounts (incl. online- sales). This is a global policy of many big “blue-chip” companies. You may use agents who act on your name, but all business deals will be done by you directly. Customers may require your local or at least regional presence due to their service requirements etc.
    • Agents. Sometimes in Asia agents are required for language reasons and due to local business practices.
    • Distributors or dealers. This is the most common channel in use. Sometimes multiple distributors are required to reach all customer segments, geographies or because of language reasons, etc.
    • OEM’s, System Integrators or Package Builders.
    • Combination of the above-mentioned channels

5.     “Joint Market Development Plan”- template – why & what’s in it?

Picture 5. Joint Market Development Plan Table of Content

  • Committing partners for mutual goals and developing a mutual strategy for performing required “channel deliverables” or concrete actions at the chosen market segments towards predetermined target customers. Again, I am referring here to the acquired market knowledge you as the principal should have before you even start searching for potential channel partners.
    • Make sure both sides have the same vision of partnership (terms, goals, responsibilities, actions, etc.). See the example below.

Picture 6: Example of roles & responsibilities between the principal and channel partners

  • Setting up the mutual goals for all the milestones of Sales Funnel Management. In addition to agreeing on sales targets in Euros or Dollars, it is of utmost importance to set targets also for the earlier milestones in the sales funnel. When you do this, you can track the actual activities of your own sales team and your partner.
  • If you focus only on the value of orders, you are not supporting or helping your channel partner in their sales work. You need to manage the entire sales funnel!

Picture 7: Sales Funnel Management

  • Securing that all the necessary actions are taken into consideration for the actual sales to happen
  • Short, documented, actionable and traceable plan
  • Easily understood, agreed and supported by both parties
  • Both parties must sign the plan. It forms a confirmation of the commitment to provide resources, an agreement to targets and actions
  • The follow-up and channel partner collaboration are also possible by using digital tools. Asian Insiders recommends “The Rudolf”, a digital tool for channel management and partner collaboration.

6.     Find and engage best possible channel partners

When you think about the above described systematic process, which culminates in the acquisition of the channel partner, I believe it should be quite easy to believe in the Asian Insiders’ systematic approach.

You already know the market, your offering addresses exactly the needs of the target segments, the right channels are designed which can deliver that offering to the pre-defined target segments, you know how big the potential is for you and the partner, you have a clear plan how to capture your share of the market, you have a clear Value Proposition for the partner and the necessary tools and working processes are already in place to effectively manage the actual sales work.

he probability to get success and win deals at Asian markets is a lot higher than in case of a more traditional way of simply focusing on finding and appointing channel partners.

The real question is: what do we have to do in this market to get (more) sales?  Developing and managing sales channels is much more than simply searching for business partners and signing distribution agreements with them. We see professional channel management as an opportunity for companies to differentiate from the competition and at the same time improve competitiveness, shorten the time-to-market and increase revenues!

Building a customer intimacy strategy, providing solutions that are adapted to specific customer situations, and delivered to the customers through individually tailored channels, is better achievable and more sustainable for most companies than price- or technology strategies.

One example of Asian Insiders’ work for channel development can be found here: https://asianinsiders.com/portfolio/opening-business-for-another-division-for-multi-industry-company/.

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