Finding the Perfect Partner
The challenge of selecting and managing sales networks for equipment and materials in today’s electronics assembly market
Whether you’re making screen printers or producing solder paste, whether you’re part of a multinational conglomerate or you’ve spotted a niche and you’ve launched a startup company, one day you’ll need someone to find you new business, sell your stuff and keep your customers happy.
At some point, all sizes of SMT equipment manufacturers (OEMs) and consumable materials makers will rely on a network of “channel partners” to engage with, sell to and service their customers. These partnerships take many forms, ranging from a one-man (or woman) band to countrywide distributers, or even super-distributers, working across continents.
The way the partnerships work varies with the demands, responsibilities and consequent legal obligations of those involved. It’s a fast-evolving business: as manufacturing technologies converge to satisfy the customer’s need for greater flexibility, faster operation and smaller product, so there’s a growing imperative for channel partners to understand the applications and technology of the machinery and materials they support.
Add continual shifts in economic, legal, cultural and environmental factors to the mix and these partnerships can be tested – which is challenging because they’re vital for delivering consistent sales, great communication and the quality of service that customers expect, and you want to deliver. Everyone in the partnership should have the same goals: to maximise sales and build a reputation for providing the best value, with the best available technology, and exceptional customer service.
For a successful partnership, it’s essential to understand who is responsible for each of the fundamental steps in the chain that drives the business.
The rewards for a good partnership are increased margins and improved sales turnover, built through repeat orders and referrals. (A good reputation is a prize all too often underestimated when it comes to the bottom line.) However, finding the right balance of qualities when matching OEMs to channel partners can be a challenge. Get the partnership wrongand the result could not only be low sales performance, but the more drastic implications of poorly serviced global key accounts (GKAs), or interminable and expensive legal wrangling to solve disputes, or worse.
For a successful partnership, it’s essential to understand who is responsible for each of the fundamental steps in the chain that drives the business. No matter what the product or service on offer, or where in the world it is, the chain can be broken down into four steps:
• Lead Generation
• Lead Conversion
When it comes to marketing, it tends to be OEMs that set the direction. The target client group will be dictated by the nature of the equipment, its capability and price point (or in case of materials makers, the type and application). What a channel partner needs to show is a systematic and consistent means of lead-generating among those target clients.
Larger OEMs may also be concerned with areas of corporate social responsibility (CSR) so channel partnersterms of environmental and employment policies.
For partnerships to work, both sides must have faith that what is promised is what will be delivered. Channel partners need confidence in the security of supply and pricing structures and OEMs need to value channel partners’ locally established personal customer relationships. A workable sales strategy and timely targets are essential for a mutually beneficial and professional relationship to develop and thrive.
A means of sharing KPIs and project details via a CRM or some other form of integrated database and sales ordering platform helps provide consistent, accurate communication.
Performance is the watchword at a technical level: OEMs must provide the technical, logistical and administrative support for channel partners to physically deliver, commission and train operators, deliver customer service, and handle warranty events. The product needs to do what has been promised, and to do it on time, every time.
Finally, ignore the respective legal responsibilities of a partnership at your peril. Understand:
• The legal structure of the entity you are engaging with and its creditworthiness
• The fail-over plans in the case of business interruption
• Any necessary product or public insurances or licenses required to trade legally and that might be affected by any regulatory standards or approvals (i.e. CE or WEEE compliance)
• The need to observe Non-Disclosure Agreements (NDA) and data protection requirements.
Transparency is essential in a successful partnership. There’s much to be said for knowing who does what and when, for whom and for what return. As ever, the key to success lies in the detail!
Terry Morgan is CEO of Voxvia consultancy with 30 years’ of experience specialising in European sales and distribution networks of equipment and materials within the electronics manufacturing industry. For more information, visit www.voxvia.net or contact Terry directly at email@example.com, +447973838275.
BY TERRY MORGAN, CEO OF VOXVIA CONSULTANCY