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Helping Brother to understand their channel

It is difficult for a business to rely on others to sell, support and market your products. Your targets and revenue forecasts are ‘estimates’ of others ability and not tried and tested facts of your own sales team. These figures may change as your partners focus or goals change and in difficult times they may abandon you product line entirely. This is the problem for a vendor, a problem for a channel manager and for a channel sales director, who will be expected to offer facts, not estimates to her own board and who knows that many different factors affect those results including the partner relationship.

This black hole in forecasting is further complicated by the inability to know where much of their product or services go – the classic ‘who owns the customer’ issue. Units may go through your channel but the identity of the customer is hidden from the vendor’s view by the partner or distributor. If you know who is buying your product at least this will support forecast claims. If you know who is not buying your product you can at least ask them why.

This was the issue for Brother, who didn’t have enough information to identify their channel through put. Brother engaged Anderson Baillie’s Business Growth consultants on two occasions to address different parts of this problem. The first was to audit their key distributors to determine why distributors supported key partners and who they affected in the channel. The second stage of the engagement was to understand Brother’s market penetration.

Understanding distributors

Key to the first stage of the programme was to work with the IT teams to introduce a tracking and tracing approach. Huge amounts of data were already being captured from the channel, yet Brother could not see where their products went, who was selling them or get any hard evidence of consumption behaviour beyond their distributors.

Anderson Baillie presented an audit approach that would identify the process and practices of the distributor, their culture, loyalty to the Brother brand and their use of data. This latter point helped identify new segments of data that when presented to the Brother IT team enabled them to determine who was buying from which distributor and the overlap between the distributors – hence channel risk. Direct mail data was presented to Brother as a starting point to determine the end user customer profile, which could then be used in data acquisition for direct mail and customer acquisition campaigns.

Understand consumption

The second stage of the commission with Brother saw Anderson Baillie analysing six years of trading data. This exercise was conducted to understand the frequency and procurement patterns within the data at a reseller level. This data would then produce a pattern of buying behaviour on which Brother could easily manage sales promotions and target the effective support of key resellers who were either selling specific lines or had insufficient throughput for Brother to carry on supporting them.

This data along with the audit results enabled track and trace processes to be added to the data reports which were now appearing from the channel each week when it had previously taken two months. The data itself proved that only ten percent of sales were through the channel and that an average unit of sale for the channel was one unit. Brother had massive coverage in the market place, but had not created multiple sales. Therefore their turnover could be significantly improved if the majority of the reseller community, who procured just one unit each year, simply bought one more.

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