Channel Mechanics

COVID-19 and The Channel

Channel Mechanics

COVID-19 and The Channel | An Outside-In Approach to a World Turned Upside Down

I am writing this blog “sheltered in place,” or isolated, or whatever the appropriate term is for staying at home.  Likewise, I’m assuming that many of you are in the same situation. While Covid-19 presents a critical challenge for the channel, it also offers time for reflection on what vendors can do to help their end-users and partners get through this crisis, while remaining viable themselves.


The goal of this blog is to outline two approaches for the channel during Covid-19:  firstly, for the immediate term and secondly, for the months and years that follow. Right now, the imperative for vendors is to focus on helping partners stabilize their financial situation. From there, we must all turn to our mutual end-users to develop an “outside-in” approach – one that uses market understanding to direct and drive not only channel management practices, but all major functions of the business.


Priority #1: Stabilizing The Channel Amid Covid-19

Right now, partners need two things from their vendors in order to keep operations running:

  1. Cash, in the form of loans at little or no interest. Partners’ access to cash will vary by country. In the US, I believe that manufacturers will have easier – and greater – access to government assistance in the short term. If that is true, they should consider cash loans to their partners.
  2. Compassion, in the form of modified policies and programs. It’s a word that is seldom used in business. But this is a time when good business practice demands that vendors examine their policies and programs to determine if modifications are possible. This is especially true if a high percentage of your partners’ target markets are in industries such as travel, hospitality and retail, that have been severely impacted by the crisis.  Forms of compassion might include:

– Implementing a temporary freeze on tier position. Thereby allowing partners to maintain their status through the crisis.

– Adjusting sales targets and other program requirements while maintaining benefits as much as possible (you will want to get accurate sales forecasts from all of your sales channels).

– Extending or re-scheduling promotions that are no longer relevant to the market environment.

– Re-assessing your returns and order change policies.


Priority #2: Planning for What’s Next

Stay Close to your End-Users

No one is assuming that workstyles and, therefore, end-user needs will return to “the way we were.” In some segments (eg. health care, education, retail, warehousing and logistics), work may change dramatically, meaning that purchasing behavior can change and end-users may expect new/different offers and types of partner support. Right now, in many segments, virtualization is prevalent. Where and how will it continue to grow?

All segments will focus on cost management. Therefore, strategies for “doing more with what you have” will be increasingly important.


What to do now?

– Stay close to your end-users through targeted market research that will guide offer definition as well as sales and marketing strategy.

– Share your research with your partners.

– Invite partners to virtual strategy sessions where you jointly share market perspective and identify options for how to optimize performance in the new environment.

– After that, ask partners what they need from you in terms of offers and support.


Re-align Your Channel Strategy and Management Practices

It’s clear that protecting and supporting valued channel partner relationships during Covid-19 requires coordination across multiple business functions. Channel teams need to have major input into this business re-alignment, providing input into how their organizations can:

  • Strengthen the current position in segments that have remained relatively strong through such initiatives as:

– Targeted promotions and incentives

– Cost-effective bundles and solutions

– Training and talent-sharing (perhaps among partners in non-competing territories) to help the most seriously affected partners address new business opportunity

  • Re-align the position in segments that have been seriously weakened or have changed. For example, initiatives here include:

– Review of production and offer launch plans

– Offer prioritization/rationalization

– New types and levels of partner support (ex. virtual training, demo programs for new offers, etc.

– Tools for collaboration with other partners


When the Surge of New Business Comes…

And it will…

  1. Make sure you have kept your partner training and certifications up to date so they can hit the ground running.
  2. Help partners order what they need through inventory consignment and/or credit/extended payment terms, that you can provide yourself or align with a credit partner.
  3. Continue to engage your partners in acquiring and sharing market knowledge.
  4. Likewise, continue to engage your organization in defining “what we learned” and “how this impacts our business.”


To conclude, the truth is there is still much uncertainty about the global economy and the individual markets we serve. Hopefully, we can use our time alone to listen to our end-users and our channel partners and develop strategies and practices that are win/win for all, during this Covid-19 pandemic.

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