Getting the right strategy for selling high end test equipment means choosing channel reseller partners to develop a complementary distribution network. Werner Mueller from Tektronix says relationships are key

While distribution is an established route to market for electronic components, when it comes to high value test systems, channel partners are typically the exception, not the rule. For the growing base of small and medium-sized firms (SMEs) who need access to such products, distribution has an increasingly important role to play in the route to market.

Building a distribution network to address the needs of SMEs requires a fundamentally different approach compared to that used for indirect sales of commodity products.

Conventional distribution is not easily applicable to high-end oscilloscopes. Key differences are that SMEs typically buy these products infrequently, sales are conducted in a highly competitive market, and the selling/purchasing proposition is more sophisticated, requiring higher levels of product knowledge, demonstration skills, and applications consultancy.

Other differences are that the higher item value may require more negotiation, a wider decision making unit, and higher levels of sign-off authority, and the purchasing process can take longer. Furthermore, the post-sale support required will also, in the majority of cases, be greater.

For the high-end product manufacturer, the objective is to put in place reseller partners that give the SME customer the same level of confidence that they would expect when dealing with the manufacturer directly. In effect, the most suitable reseller is one that represents the manufacturer in every possible way – from product knowledge to technical expertise, and from commercial representation to post sales support.

At the same time, customer peace of mind will only come from the knowledge that they are buying from a familiar and trusted source, no matter how frequently they buy. This means that supplier/reseller relationships must be built on strategic, long-term co-operation rather than short-term tactical gains.

A good channel strategy starts with a vision in which satisfied customers repeatedly buy a manufacturer’s products from trusted reseller partners. Successfully implementing this strategy requires the appointment of the right partners, and an understanding of the processes needed to maximise the benefits for customer, manufacturer and reseller alike.

A key element in delivering these benefits is an ongoing reseller evaluation process. One example is the formal certification programme that we have used at Tektronix to develop a ‘complementary channel’ distribution network, comprising silver, gold and platinum authorised channel partners.

A formal certification programme is a vehicle for the regular review of all reseller partners against specific criteria. The objective is to deliver benefit to the customer, while optimising the number of partners to maintain the balance between maximising reach and minimising channel conflict.

Certification criteria cover sales and marketing, product knowledge, product demonstration skills, applications consultancy, and business considerations such as brand focus and loyalty, stock levels and financial health. Some of the criteria – for instance those requiring testing of reseller engineers’ product knowledge and technical support competencies – are assessed using online systems, while others are measured by consultants. Points are awarded against each criterion. Based on the number of points they receive, reseller partners become eligible for agreed levels of discount and other incentives.

A true relationship is a ‘two-way street’, and manufacturers cannot simply make demands of their channel partners without giving something in return. The successful high-end product distribution model requires the manufacturer to help its partners meet the requirements of their SME customer base.

Such support will include regular product training, updates on technology roadmaps, technical backup, easy access to demonstration and training materials, supply of product for customer evaluation, and analysis of the strengths and weaknesses of competitive technologies. From a commercial perspective, sensible pricing and discount structures, flexible payment terms and strong logistics support will be as important as the long-term loyalty of the manufacturer to its resellers.

Finally, for a customer to have the peace of mind that dealing with a channel partner delivers the same experience as dealing with the manufacturer directly, it is essential that the manufacturer’s employees respect, understand and support the reseller partners as they would their peers in their own organisation. This creates true long-term, robust partnerships.

Werner Mueller is the European director of partner business at Tektronix.

www.tektronix.com