Today we would like to welcome Rick Wilson as our guest blogger. Rick is a distribution strategy expert, writer, educator, advisor, and speaker.
A new generation of marketing automation tools is not only improving the efficiency and effectiveness of established channel ecosystems, it’s creating fresh opportunities for long-frustrated manufacturers to re-think how they go to market, and put in place higher-performing distribution channel structures without sacrificing cost or profitability gains.
Let’s consider the once mature analog circuit market that is experiencing a renaissance in growth as a new generation of smaller industrial and medical device makers seek out new chip components for their innovative products. Like many markets in the current environment, the routes-to-market for analog chips are highly consolidated around a small handful of low-cost national distributors with little capacity or incentive to provide hands-on, high-touch product expertise and customer assistance to these smaller customers.
The information required by smaller customers is relegated instead to online ‘data sheets’ of technical specifications. But after years of focus on digital chip technology, current device development engineers at small- to mid-sized manufacturing customers lack a deep understanding of analog technology just as they find themselves buried under a long-tail avalanche of technical promotional materials.
This customer knowledge gap means most product and purchasing engineers at smaller manufacturers simply default to familiar legacy brands or suffer through costly trial-and-error component selection. For them, the analog chip supply chain is cumbersome, risky, time consuming and inadequate. What they crave instead is a more effective way to tap into analog product engineering information, expertise and support with the same level of hands-on assistance that small, local value-added resellers have long provided in other technology markets.
Innovative circuit manufacturers investing in new analog product differentiation recognize this need to change the end-customer’s buying experience, but feel trapped by current large-scale, commoditized distribution channel options. Conventional wisdom has long held that the demand creation capacity and competence a more fragmented network of locally-based, high-touch distribution channel partners would provide to smaller customers is simply unaffordable and a strategic non-starter. While not the whole story, today’s new Marketing Automation solutions are a big part of how a forward-looking chip manufacturer looking to change the rules of engagement could streamline the economics of complex information dissemination through a new system of smaller, more local distribution channel partners.
Critical application- and vertical-market specific technical content, along with promotional campaign design and structuring would still be centralized at the manufacturer for low-cost development. But new promotion automation tools would be leveraged to certify and incentivize specific channel partners to match with each application, promote the marketing program itself for ease of channel adoption, and orchestrate end-customer online search optimization and retargeting mechanisms that drive new leads and incremental higher-margin demand opportunities to the best partner with the right services and expertise. In this new scenario, the follow-on promotional activity of an army of local channel partners would be leveraged to rapidly expand the chip manufacturer’s earned media clout in a confusing and crowded analog marketplace. Mindshare with channel partners would climb naturally as they experienced more profitable demand generation through the manufacturer’s marketing programs.
But best of all, end-customers would learn about and select the product manufacturer’s solutions in a more efficient and effective way. At the end of the day, smarter use of technology to create more customer-driven distribution will always win.
