Currently, we observe two seemingly contradictory trends in market and customer management: On one hand, an increasing number of manufacturers are opting for direct sales, while on the other hand, they are increasingly involving numerous partners in delivering their services to customers. But what lies behind the paradox of these developments?
Why Direct Sales is Gaining Ground
Trading partners or sales representatives lose importance when they fail to create added value between manufacturers and customers (e.g. competent advice, inventory management, & ensure availability). At the same time, customers are increasingly seeking direct access to manufacturers, breaking through traditional sales channels. Especially in the digital world, they are less and less adherent to the rules agreed upon by manufacturers and their partners. Direct contact also pays off for manufacturers: They are closer to the customer and receive immediate insights and market feedback to accelerate product development and innovation.
Why Partnerships Are Still Essential
So why is partner management gaining importance despite this? By integrating partners, providers can specifically optimize their own value creation processes and unlock additional potentials. The concept of partnership in this context is broader than the “old” understanding of indirect sales. The possibilities for engaging partners are diverse: as a source of access to new target groups, for generating and qualifying leads, or for processing orders and support services. However, effective implementation is very challenging.
How to Manage the Balancing Act?
- Analyze the Status Quo: Identify the potentials in your customer and market management by analyzing the buyer journey of your typical customers and comparing it with your own value creation process. Scrutinize whether the effort and yield are appropriately aligned.
- Identify Needs for Action: Based on this, deduce the strengths and weaknesses of your current approach. Depending on the situation, this may mean replacing existing partners or actively seeking out new partnerships.
- Coordinate Activities: Carefully integrate partners at points where you need support. It is essential that you maintain an overall view of your value creation processes and clearly regulate who takes on which activities.
- Ensure Performance: Ensure that both sides benefit from the collaboration (win-win). This requires clear agreements and rules for evaluating and appropriately compensating the contribution of both partners.
- Manage Partners: Without a coherent system, the efforts in partner management evaporate. Differentiate where it makes sense (e.g. by type of partnership) and consistently manage your partner portfolio.
Conclusion
The apparent paradox presents an opportunity for all parties involved in B2B business. At the same time, it requires courage and consistency to part ways with what no longer works.