Accelerate Growth Through International Channels

April 25, 2006
Your international growth will sputter and stall if you don't upgrade your overseas sales, marketing, and channel competencies.

Everyone knows we all compete in a global economy, and sales through international channels are already strategically important to many companies. However, many executives are worried that year-over-year growth through international channels is not sustainable.

Some blame aggressive competitors, cost disadvantages, and unfriendly regulators. But more insightful leaders realize that early decisions made at market entry limit today's flexibility, organizational skills, and problem-solving options. In short, many companies have underinvested in overseas markets and not kept up with changing conditions.

Ask yourself the following questions about your company's approach to sales, marketing, and channel management in overseas markets:

  • Do your local sales and marketing teams know as much about customers and market conditions as your channels?
  • Did you grant exclusive territories to channel partners without locking in controls and visibility to customers?
  • Is your intended value-proposition reaching customers in local markets, or are expedient decisions eroding your market position?
  • Has your company kept up with the growth of alternative channels?
  • Do your channel people around the world think of distributors as customers, or do they demand value-added services and growth?
  • Are your most experienced sales and marketing managers jetting around the globe to put out fires?

If you answered "yes" to more than one or two of these questions, then you have some serious work ahead to update and develop your international channels. But, you should know that without also upgrading your international sales and marketing organizations, you will not achieve the results you desire.

The good news is that you can learn by the actions of manufacturers in international markets. In my experience, several new imperatives are emerging:

Take off the blinders: Too many manufacturers focus on brand and product issues, while others fail to listen to local market feedback. You can't drive one channel execution all around the world, but you can ensure that all local teams approach their markets with a common process and appropriate tools

Regain control of market strategies: Your local managers must ensure that critical strategies concerning pricing, positioning, and customer targeting are made with discipline and deep market insights, and not delegated to local channels.

Upgrade value propositions: Customer perceptions and channel partnerships can be improved by integrating product and channel benefits into a meaningful offering.
Also, policies and controls are needed to monitor and influence communications delivered by the channel.

Demand more from "nation-state" distributors: Exclusive territory rights are a huge give to any distributor, and in return, manufacturers must gain dedicated brand support, customer data, cooperative planning, and above all, accountability.

Strengthen in-country, value-added channels: Import/export channels provide an expedient tool for cracking open new markets, but long-term success requires more. Customers must be offered high quality service, and channel relationships must be a partnership, not a handoff.

C-level sponsorship is required for success, but a simple five-step audit will help your managers assess your company's strengths and weaknesses, and set your own imperatives:

  1. Talk to end-customers -- Find out if local channels are meeting customer needs and communicating your value proposition for effective results. Check your offering for relevance and differentiation.
  2. Measure coverage and presence, market by market -- Coverage is your channel's share of the market, and presence is your share of the channel's business. These fundamental metrics often go unexamined, and new data can propel your business forward.
  3. Recheck your balance of direct and indirect selling -- In today's multi-channel systems, you must be equally adept at both... and skilled at managing the conflict that results.
  4. Consolidate visibility to marketing spend -- Gather all promotions, discounts, rebates, incentives and other spend into a single worldwide view. Then, determine if you are getting adequate return on your investments.
  5. "Handicap" your global markets -- I mean handicapping in the same sense that wagers are placed on a horse race: consider local conditions and prioritize the races (i.e., markets, segments, or customers) most likely to yield a win.

Upgrade your international organization as you develop your global channels, and you can create an effective and efficient engine for driving sustainable growth. Pay attention to people, process, and systems, and at the same time, revisit the span of control assigned to the managers you will hold accountable. Be creative, but get the facts and demand a disciplined approach.

And most of all, build your international channels for speed with local sales and marketing teams that can win races!

Mark Dancer is vice president and principal with Pembroke Consulting. He is based in Chicago and may be reached at [email protected].

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