Insight

In industries ranging from software to automobile, most companies selling into Asia have to rely on a comprehensive network of partners and distributors to achieve effective penetration into this vast & diverse continent.

With the huge range of cultures, languages & business-norms across Asia, specific channel strategies can vary greatly in the details. However, in general, principals tend to provide their partners with access to world-class products, R&D, branding and selling-methodologies. Partners, in return, are expected to reciprocate with local networks and market knowledge, FOS (Feet on Street) resources and the necessary political connections.

In the past, most MNCs could count on there being a long line of potential partners eager to represent their brand. However, with the booming economies of China and India, this is no longer true as foreign companies fall over each other to access these promising markets.

Thus, attracting the best partners and keeping them motivated has become more critical than ever before. Effectively managing your channel partners is, of course, a complex topic, but listed here are a few main points that a principal needs to carefully consider:

1. One of the first steps of effectively engaging a partner is to clearly define their roles and responsibilities.
   Do you only want them to sell? Who is responsible for market research,
   marketing and fulfillment? Will they be playing the role of a VAR
   (Value Added Reseller), SI (Systems Integrator) or a Wholesaler?
2. Next, clearly articulate the goals and targets
   that are expected of the partners. To motivate partners, set clear
   profit and market-share expectations and explain how you intend to help
   them to achieve these targets.
3. Principals must also help the partners assess their potential risks and rewards
   of entering into the venture. What kind of relationship are they
   entering into? Are the targeted territory and margins big enough for
   them to make a decent return on investment and motivate further
   expansion? What are the key industry trends that they need to be aware
   of?
4. Another key factor is to provide adequate opportunities for learning.
   Most partners are hungry to learn from MNCs’ world-class best
   practices. Enabling partners to effectively upgrade their management,
   sales and fulfillment skills can be a strong motivator. Of course, you
   would be best served by carrying out a comprehensive assessment of your
   partner’s prevailing skills levels before spending your precious
   training dollars.
5. Principals should also ensure that the contractual terms are fair
   and not too rigid. If the benefits of the contract accrue primarily to
   the principal, partners may not be motivated to put their weight behind
   the partnership.
6. Finally try to understand your partner’s longer-term aspirations.
   Where and what does the partner want to be in three to five years?
   Ensuring that your partner’s longer-term goals are in sync with your
   own strategic roadmap helps keep the partnership strong and viable as
   time goes on. Forging a partnership on diverging visions is a recipe
   for disaster.

A properly motivated partner is crucial in maintaining the long-term
viability of your business in Asia. Make sure that your own channel
managers are well trained in this crucial aspect of their
responsibility.