Branding and Product Positioning for the Channel Provider

I recently listened to a common type of miscommunication between channel partners and a vendor about marketing. The partners told their vendor that they wanted branding. The vendor obliged by creating a Marcom campaign that none of the partners used. Both complained to me that the other was unreasonable. Since both the vendor and the provider wanted the same thing, how come the outcome and results were so poor?

The problem is that although they use the same words, vendors and partners mean very different things when they talk about business development. Often when channel providers say ‘Branding’ they mean ‘Marketing.’ When they say ‘Demand Creation’ they mean ‘Joint Sales.’ When they say ‘Promotion’ they mean ‘Leads.’ Partners need tactical marketing directly tied to their internal sales process.

Classical branding is a mistake for most channel providers. Brand is a complicated composite of many factors: a product’s visibility in the market, the seller’s reputation, the product’s efficacy, price, the perceived value, etc. Brand is a type of short hand the customer uses to categorize and prioritize solutions.

In the absence of due diligence, brands deliver a premium in either pricing or preference. However, without substantial budgets and sophisticated marketing capabilities, branding efforts will do little more than drain away precious resources.

The two approaches to building a brand

Think about it. It is no coincidence that there is a correlation between market share and brand. There are two approaches to building a brand and neither is inexpensive. One is through customer impressions and one is through customer transactions.In the traditional, demand-centric (impressions) approach, brand is built by repetitively telling the customer the brand message through advertising. Key measurements include touches, unaided recognition and image. In the transactional approach, repeated, positive customer interactions are the key. Big companies have BOTH numerous customer interactions AND marketing departments to communicate their solutions’ impact. That is branding.

To compete, channel providers need the power of product positioning and consistent tactical marketing. Product positioning differentiates your pitch from the noise and competition to address a specific customer business issue.

The stronger the link to business results, the faster the sale and the higher the margin. A specific list of executive buyers, a clear understanding of their needs and proof of impact on their requirements will do more than any vague branding campaign for the average partner.

How to Succeed

This simplicity means product positioning is easier to implement and measure than branding. And that means even unsophisticated, but consistent, marketing campaigns can succeed.I am not saying that branding is bad, just that it is not the best use of scarce marketing resources for a specialized channel provider. Vague, hard-to-leverage image and awareness campaigns just do not deliver the specific ROI demanded by the typical channel provider.

Going head-to-head with large, well funded, dominant market competitors is not usually the path to longevity or profitability. Besides, most providers tell me that their biggest problem is not lost sales but lack of market visibility and legitimacy. Many are confident in their abilities and believe in their products, but are frustrated at being the best kept secret in the industry.

Scott Karren, the “Channel Pro,” is chief executive officer of Channel Ventures, a channel development consulting firm. Read his online weblog.