Q&A Bantor on Disruptive Distribution

Question: Isn’t it our channel partner’s job to add extra value to end-users and gain share for our products?

Answer: Relinquishing too much responsibility for your end customers’ total experience reduces opportunities to create proprietary differentiation and higher margins for your own products and services in the marketplace. It is always in your best interest to help shape the powerful new value propositions that will draw end customers and channel partners closer to your company. In a world of increasing distribution scale and consolidation, too much market power is being lost by passive incumbent suppliers.

Question: What’s more basic than getting channel partner relationships right and continuously improving supply chain performance?

Answer: It has become painfully clear that focusing on conventional performance levers creates little sustainable advantage. Incremental improvements are simply inadequate to hitting growth and profitability targets. Indeed, the usual improvements—broader line coverage, more competitive prices, rising allowances and rebates, increasing product quality, higher fill rates, faster delivery, electronic order entry, recipe promotion, chef training—are now simply ‘costs of entry.’ They have become requirements. Future winners are already taking steps to find more differentiated strategic levers for their future.

Question: Wouldn’t it be risky to open up to a key partner, even for the sake of greater channel system competitiveness?

Answer: Putting your nose to the internal grindstone then periodically lobbing new programs or price concessions over the wall to channel partners is ‘old school management.’ Powerhouse market leaders engage intensely in strategic collaboration, co-development, joint risk-taking, and tighter relationships up and down their value chains. In today’s networked world, ‘go it alone’ is what’s truly risky.

Question: How can we take on longer-term differentiation when everyone is stretched for time and resources?

Answer: There’s no doubt that competition today forces organizations to be lean and efficient. The trick for growth mavericks is to find strategic leverage through collaboration. Engaging with channel partners – really engaging in an open, strategic dialogue – creates more enthusiasm, higher impact strategies, and greater commitment. But best of all, collaboration creates a bigger pool of opportunities and resources. Are you and your channel partners paying enough attention to sustainable differentiation?