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Channel Strategy Definitions

By Scott Karren, CEO, Channel Ventures

Channel Professionals often use the same words but with very different meanings. Additionally, words such as objective, mission, strategy, program, campaign, initiative, project, and promotion have overlapping meanings. Even worse, as you move out from the channel to other parts of the organization such as the marketing and product groups, it seems like a completely different language. For example, in channels we refer to a program as a collection of benefits available to members; Marcom people may call a promotion or contest a program. While I do not intend to write a comprehensive glossary of channel terms (at least not today,) defining some key terms is helpful in organizing thoughts about channel development.

Objective: This is a long-range, high-level goal, often qualitative in nature and frequently with a time frame of 2 to 3 years. In addition to unit sales and revenue quotas, the objective often is stated to include market share, account coverage and channel loyalty.

"Our product will be widely accepted among medium sized end users."

Mission: A key step or milestone within an objective. Like the objective, the mission also is a high-level goal, but usually short to medium range in nature. Unlike the objective, the mission almost always is quantitative and clearly measurable.

"We will transition 500 ISVs to our platform within the next 12 months."

Strategy: The senior level, essential idea for accomplishing an objective. A good channel strategy has several attributes: it matches strengths with the competition's weaknesses, it is consistent with company culture, it can be implemented, it is clear and simple to communicate and it is comprehensive. Most importantly, it has to work.

"We will cut channel headcount and costs to compete directly with Dell on price."

Tactic: Specific activities that support the strategy, mission and objectives. Channel recruitment, training, programs, tools and events all can be effective tactics is appropriately aligned and managed.

"We will use Executive Conversation's 'EFS, Channels' to increase the acumen of our CAMs."

Plan: The allocation of budget, headcount and resources to implement the strategy and accomplish the mission and objectives.

"We will invest $50M in our managed accounts over the next 2 years."

Program: The vehicle to take a plan to the channel, a program is a contractual relationship between a vendor and the channel. Designed to reduce the costs of channel administration, a program is a collection of support, training and benefits available to qualified members. Programs are frequently tiered to support account coverage across broad, tele-managed and managed accounts. The best programs are based on provider business models, not vendor product lines.

"Our 'Specialists Program' markets the brands of our most innovative partners.

Initiative: Short-term goals for channel productivity. Frequently set around product launches, product awareness, program recruitment and program requirement compliance, initiatives have set metrics and time frames, usually less than a year. The initiative may be a formal, named project, a pilot project or an informal executive directive.

"During the launch period, each partner will participate in 'Home Run'."

Campaign: Marcom activity to the channel or end-user. Less formal or comprehensive than a program, campaigns may still have membership requirements. To be effective, marcom must work directly with field sales management to align the message with partner business needs.

"Catch the wave! Be a Wi-Fi Implementer."

Promotion: Targeted marcom event designed to drive sales. Unlike advertising, promotions answer the "Why now?" question.

"Sell fifty of our products by Christmas and win!"

More important than the words we use is the overall process we use to build and manage the channel. Without a clear channel development philosophy, none of these individual activities is really effective.

Scott Karren is the CEO of Channel Ventures, a specialized consulting firm that works with vendors and partners to build profitable channels. Mr. Karren has led his companies to successfully complete over 1,000 channel projects impacting over $150B of channel revenue.

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