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Customer satisfaction is the one thing you never, ever abdicate to a channel. Once there is a competitive product on the market with wonderful technical support, and you know there will be soon, what do you think is going to happen?
She said that customers absolutely love their products (a highly technical product with a lot of different applications), but customers think that this company’s technical support is really, really poor. The potential client said that the company has dug their heels in on this issue. They are paying their channel partners to support customers via a large discount, so therefore it’s no longer the manufacturer’s responsibility. The channel partners will do it. I responded by disagreeing, saying that it remains the manufacturer’s responsibility. Customer satisfaction is the one thing you never, ever abdicate to a channel. Once there is a competitive product on the market with wonderful technical support, and you know there will be soon, what do you think is going to happen?
I related to her the story of how IBM discovered this very quickly back in the olden days when they introduced the IBM PC. Their original channel strategy was similar to the one of the potential client. IBM provided their brand new dealer network with what they thought was appropriate technical training and a very healthy margin to provide support locally to the dealer’s customers. IBM refused to publish a phone number that customers could call. The only IBM numbers available for technical support were for dealers. Turns out the dealers very quickly gave these numbers to the customers because the dealers couldn’t answer all of the various application questions that quickly emerged. IBM would never risk customer satisfaction, so they quickly put together a technical support hotline for customers and set the standard for customer support. From that discussion came this article.
You have to believe two things in your head and heart or the rest of this doesn’t matter:
- Regardless of who sells a product to a customer (direct or indirect channels), the manufacturer is ALWAYS responsible for ensuring the satisfaction of their customers.
- Customer satisfaction problems, regardless of who’s “at fault,” will result in lost customers and lost market share.
Responsibility for customer satisfaction doesn’t mean that you as the manufacturer have to do everything yourself, or worse yet, duplicate similar efforts of your channel partners. It does mean that you are responsible for understanding the requirements of a particular customer segment for a particular product or service. It also means that it is essential to select the channels that can deliver those requirements. And here’s the key: if your channels cannot or will not meet the needs of your customers, then it is your responsibility to supplement the channels’ capabilities. You may have to provide additional training or other resources, or you may have to deliver the support yourself. Or it may mean that you need a different channel member or a different type of channel altogether to meet customer needs. You cannot simply say that the channel is supposed to do this or that and walk away. It’s true that most customers can differentiate between a problem that is the manufacturer’s responsibility (e.g. a product performance problem) and a problem that is the channel’s responsibility (e.g. no inventory), but the results are the same . . . a lost customer.
Following is a basic chart that will help you start to define customer requirements. First, determine for a particular segment interested in a particular product/service if the requirement applies (Customer Requires This). Then, decide who should perform the activity (e.g. who provides testimonials). In many cases, there may be a joint responsibility between the manufacturer and the channel (manufacturers make sure they properly forecast to ensure product availability and the channel inventories an adequate amount to meet customer delivery requirements). This will only work if you use it for one product/service and one customer segment; otherwise, your answers will always be “it depends.”
Customer
Requirement |
Activity |
Customer
Requires This |
Channel
Responsibility |
Manufacturer
Responsibility |
| Product, company, channel awareness |
Product, brand, channel advertising; promotional activities, (tradeshows, seminars, etc.), web site |
|
|
|
Needs
assessment |
Help in determining right product or configuration or application |
|
|
|
| Demo/sample |
Product demo at channel or at customer site (try and buy); Samples for evaluation |
|
|
|
Testimonials/
references |
Provide objective case studies, evaluations, etc. |
|
|
|
| One-stop-shop |
Provide appropriate bundle of products/services |
|
|
|
Product
availability |
Ability to meet customer’s delivery requirements |
|
|
|
Pricing/bid/
proposal |
Timely response to customer pricing data needs |
|
|
|
Financing/
leasing |
Financing arrangements for capital equipment directly or through 3rd party |
|
|
|
Trade-in
options |
Trade-in options available directly or through 3rd party |
|
|
|
| Installation |
Assist with installation and testing of product |
|
|
|
| Training |
Train end user(s) on product applications and ongoing use |
|
|
|
| Warranty service |
Responsive in-warranty service available |
|
|
|
| Ongoing repair service |
Various levels of repair service available |
|
|
|
| Ongoing technical support |
800#, web support, searchable database, engineering support |
|
|
|
| Ongoing product and technical updates |
Information on new products and product updates “pushed” to customers |
|
|
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This process of defining customer requirements and assigning responsibilities has value in a number of scenarios:
- You are introducing a new-to-your-company (or even more importantly, new to the market) product and are going through the channel selection process.
- You are going to sell your product to a new customer segment which might imply a different channel.
- You have limited resources and you need to know which of your channel marketing programs are important, which programs are redundant and which programs are obsolete.
- You have increased “noise” from your customer base and are concerned about disenfranchised customers.
If we go back to the inspiration for writing this article, customers of the potential client would mark a large X in the last two requirements – ongoing technical support and ongoing technical updates – and would expect this support from the manufacturer. Customers know that the manufacturer designed the products, wrote the software that enables the products, and therefore are the only ones who can truly provide the kind of technical support required to effectively use the products. If channels are being compensated for technical support but are unable to effectively provide it, well then that’s another topic for another day.
IRCG is an experience-driven, general consulting practice specializing in distribution issues for business-to-business distributors and manufacturers. The firm was started in 1987 by J. Michael Marks and is well known for helping companies achieve competitive advantage. You can contact them by calling 321-956-8617, or visit www.ircg.com for more information.
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