What We Do

Our services are comprised of these four key competencies. Chicago Strategy helps clients see distribution channels through the end-customer’s eyes. Our engagements focus on helping companies develop distribution channel systems that drive accelerated growth and profitability.

Baseline Channel Audits

Comparing the distribution channel pressures of today with those of even ten years ago reveals a striking decline of distinctive marketplace differentiation. These changes represent a significant opportunity for companies that requires they regularly reassess ways to guide, manage and motivate channel partners to achieve new levels of growth and profitability. CSA helps companies answer critical strategic distribution questions – thoughtfully, factually, thoroughly, and actionably:

How are end–customer channel needs evolving and how do they create new challenges in achieving your channel–driven growth objectives?
What gaps exist between channel partners’ current business models and the requirements and economics of changing customer channel needs?
How motivated and prepared are channel partners to respond effectively and efficiently to industry and competitive performance pressures in local markets?
Are channel management and incentive programs aligned with the demands channel partners are facing in the current marketplace?

Approach. The CSA Channel Opportunity Audit is an independent and systematic diagnosis of your company’s distribution channel opportunities and threats. The CSA Channel Opportunity Audit is typically executed in four to five weeks of elapsed time in your marketplace, and proceeds systematically through four assessment and analysis steps:

Step 1: INTERNAL MANAGEMENT INTERVIEWS. A highly–seasoned distribution channel expert from CSA will interview senior thought leaders and line managers within your organization to surface critical insights and beliefs about current distribution channel opportunities and threats.
Step 2: EXTERNAL MARKET DISCUSSIONS. CSA will conduct one–on–one working discussions with end-customers and distribution channels in your marketplace to surface their insights and observations about how changing industry and customer dynamics are affecting their current business models and economics.
Step 3: SYNTHESIS AND DIAGNOSIS. A Channel Opportunity Audit report will be provided to you that outlines how your company is positioned to address pressing channel threats and opportunities.
Step 4: PRIVATE FACILITATED WORKSHOP. You and your senior leadership colleagues will receive an advance briefing packet and participate in an executive-level Channel Opportunity offsite facilitated by management advisor and educator Rick Wilson, a global expert on distribution channel strategy, execution and management.

Turnkey Channel Strategy

Our work developing and implementing growth-generating distribution systems follows a straightforward five-phase path whose hallmarks are probing logic and unsparing analysis, with a dash of creativity; enough hard facts to piece together a reliable view of both risk and potential; and management consensus at every key juncture.

Approach. Our Channel Strategy approach is firmly rooted in what matters to end–users.

Where some methods start from an inward look at organizational strengths and shortcomings and then build from there, the tenet of our work is that the most resilient distribution systems look outward first. Our gyroscope is how well the system currently performs against customer demands, while being alert to latent or developing needs that end–users may not fully recognize themselves.

In getting to the level of day–to–day action, the basic questions therefore become: What distribution services will satisfy end–users? What activities are needed to deliver these services? Who is best equipped to perform them?

Five-Step Process. In simple form, developing a distribution channel strategy can be thought of in five steps:

Early steps, performed simultaneously and independently, generate descriptions of three distinct poles of distribution: (1) an “ideal” setup capable of delivering everything end-users need or wish for, (2) today’s existing system, and (3) a boundary line in the sand beyond which executives are not prepared to go.

Coaxing their needs and dreams out of end-users is something of an art. So is dividing a market into segments of users united by a set of similar desires. The trick is to make concrete distinctions only where it counts, to prevent the analysis from ballooning to unmanageable proportions.

The fourth step, “gap analysis,” brings the three analysis pillars under one spotlight, contrasting their features with each other’s and examining what it would take to remove gaps between the existing and ideal systems in order to improve value to end users. From there, several conceivable options are outlined. In the fifth step, based on the trade-offs presented management selects one choice as the optimal blend of investment and reward, and draws up a roadmap for implementation.

BEST LEARNED BY DOING As with most things, what is simple in theory tends to be complicated in practice. The devil is encountered during the myriad small steps that go into crafting the optimal system and getting it to run smoothly. For that reason, channel strategy is best learned by doing. The following brief descriptions begin to suggest what is involved.

Step 1: IDEAL CHANNEL SYSTEM This imaginative exercise momentarily assumes dreams can come true. It gives the company a “clean sheet” world unconstrained by existing channel relationships, by any limits that management imposes, or even by what appears possible today. Essentially, it creates wish lists for targeted end-users.
Step 2: EXISTING CHANNEL SYSTEM The company’s pipelines to market have to be described in every respect. Exhaustive documentation and every last number may not be required, but a view from every angle is. That means at least a snapshot of product and service flows from the company to its end-user, a relative sense of marketing as sales productivity, and a reliable, if patchy sense of channel economics. (Estimating activity costs demands, as we have said elsewhere, a tremendous amount of inventive thinking, an ability to concentrate on direct and traceable costs, and several aspirin tablets.)
Step 3: MANAGEMENT-BOUNDED SYSTEM Any company is under the sway of its own characteristic set of presumptions, biases, preferences, habits, and pathways. Cultural and organizational patterns, hard as they are to pin down, are real. They have to be taken seriously: Which group “owns” channels within the company: sales, marketing, or operations? Just how strong are the forces of conventional wisdom and inertia? Can the power of evidence and logic really win out?
Step 4: GAP ANALYSIS How much separates the ideal from the existing system? What configurations does the one possess that the other does not? What competencies must be built, borrowed, or bought to come within striking distance of the ideal? And how much time, investment, and skill would it take to arrive there?
Step 5: OPTIMAL SYSTEM & IMPLEMENTATION The best channel system is one that meets the tests of market attractiveness, competitive strength, attainability, and long-term adaptability. Speaking more concretely, it also specifies who — the company or its distributor — is to perform each channel activity and how to apportion equitable compensation. Not until the optimal system is chosen does it make sense to wring out redundancies, shave down overlaps between distributors, and generally tighten network efficiency.

Looking Ahead to Implementation

One near-certain outcome of choosing to build an optimal system is a sudden upsurge in personal responsibility. A great deal will need to happen in many places in a coordinated way. Sharing responsibility up and down the distribution system network makes change more manageable, even if the lack of control can sometimes be unnerving.

Oddly enough, executional pressures subside considerably when managers start to embrace a customer- and market-focused approach to channel strategy, when they expand their view beyond their own company’s internal operations to encompass their channel partners, and their channels’ channels, along the entire distribution system.

Channel Strategy Workshops

Channel Partner Engagement