The Channel Challenge

As manufacturers face new competitive challenges, distributors alter their capabilities, and customers change their requirements, the path forward keeps shifting.

Many manufacturers have not updated their channel policies in a decade, while wholesaler-distributors have undergone significant changes in terms of online disruptions by non-traditional competitors, multi-generational workforce dynamics, digital transformation challenges, evolving salesforce structure, and so forth.

Clearly, old assumptions about channel design and management are being challenged. While distributors and their suppliers are busy responding to forces of change from their organizational perspective, are they also looking at the forces of change from their channel perspective? How do we align our interests in today’s age of disruption and the customer experience-driven economy?

Our Research

These questions were the driving force behind this groundbreaking research study. The solution does not come from distributors alone or manufacturers alone, but rather from collaborative research. This first-of-its-kind study is based on a consortium made up of multiple distributors (15 distribution firms from six lines of trade) and manufacturers (5 manufacturing firms from four lines of trade) who came together to research and develop solutions. The consortium answered questions both quantitatively and realistically using real-world channel data.

Outcome: Channel Alignment Framework

The result is a comprehensive Channel Alignment Framework that presents a menu of creative channel compensation forms that can help distributors and their manufacturers develop various channel capabilities that can create value for end customers. The focus is on making a one-to-one connection among manufacturer’s channel compensation, distributor’s capabilities and customer value, all leading to a process where all entities can have constructive, objective dialogue rather than subjective, selective fault-finding. The framework ends with linking how all parties involved can capture value from customers and how it is linked to their financial goals.

Program Overview

• Understand the creative use of channel value drivers for channel compensation and collaboration.
• Understand the one-to-one linkage among manufacturer investments, distributor capabilities and customer experience using the ground-breaking channel framework.

The Program focuses on TWO key areas

• Develop channel value proposition
  • Manufacturer value proposition: Key elements
  • 10 Distribution channel value drivers
  • Channel compensation: Drivers & Disruptors
• Manage channel alignment
  • Aligning Supplier – Distributor – Customer
  • Bringing it together: Channel Alignment Framework
  • Adapting to channel forces

The ACTvantage Channel Alignment Framework