4 Strategies Semiconductor Manufacturers Can Use To Harness Their Potential With Distributors
The semiconductor industry is a world experiencing significant change.
Because of the increased adoption of portable software, massive consolidation within the consumer base has ensued.
When you combine this with limited margin growth, Japan’s economic deceleration of the yen and soaring pricing/market competition, it’s no wonder why the relationship between manufacturers and their distributing partners is hurting.
The ever-increasing challenges that continue to mount within the distribution chain is made worse by:
Poor end-customer insight – Manufacturers [commonly] have little to no understanding of the needs and/or pain points into their partner’s direct customers. This results in irrelevantly/improperly designed sales and marketing programs that don’t correlate with their distributor’s needs, which contributes to low incentive program opt-in rates and diminutive partner mind share.
Failure to offer adequate support – Manufacturers who are unfamiliar with the way their distributing partners conduct business [in]advertently destroy their relationship; partners want their manufacturers to have a good understanding into their weakness areas, expertise, business operations, etc., in order to maximize both company’s strengths.
Parallel partner portfolios – Manufacturers that don’t treat each channel partnership as a unique rapport or create a “status quo relationship” where each distributor shares the same incentives, consultation, training, product lines, etc., deteriorate [profitable] opportunities.
Ineffective modification – Because the semiconductor industry is a marketplace of constant change, distributing partners require their operations to be reevaluated on a consistent basis. A once effective partner strategy may not be the next day, and manufacturers that fail to regularly adjust their tactics face further [channel] complications and inept communication.
Semiconductor manufactures that establish mutually beneficial channel partnerships with distributors face a plethora of advantages. From the introduction of new customers to higher demand of ‘slow-moving’ product, there are virtually endless opportunities when cohesion and empathy exist between two business partners.
Following are 4 strategies manufacturers can use to harness their potential with distributors:
1.) Defined expectations:
Nothing deteriorates a partnership more than a service-level agreement that is inaccurately stated. The ‘fine print’ should be perceived to its standards, which should never be breached or abused. Distributors should have a detailed understanding of the services you will provide and the tangible benefits that come with following the SLA.
2.) Assist in marketing:
Your promotional expertise goes a long way in terms of the success or failure of your partnership. As the manufacturer, no one understands the functionality or benefit of your product better than you, so it’s essential to never underestimate the value you can provide distributors via marketing (e.g., co-branded content, blogs, web copy, brochures, product manuals, collaborative marketing efforts or funds that are made available).
3.) Readily available materials:
Similar to providing marketing expertise, offering your distributing partners with supporting resources that will help strengthen their ability to sell your product goes a long way. Case studies, eBooks, videos, white papers, infographics, etc., that are presented through an easily accessible Partner Portal platform is essential for successful implementation.
4.) Hand-off qualified leads:
Sometimes all your partner needs is a little confidence to get the ball rolling. If your distributing partner is struggling to qualify leads and move inventory, don’t be afraid to pass off a low-risk opportunity their direct sales team can take advantage of. The long-term benefits go a lot further than the short-term loss.