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.
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:
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.
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.
For most companies, the difference between success and failure in achieving their aspirations can be tied to two or three key strategic decisions. Channel strategizing and planning, therefore, should be about identifying key issues, building alignment between members of your management team, and establishing individual and team commitment and accountability. CSA is highly skilled in guiding senior executives and their teams through strategic planning processes to generate momentum, enthusiasm, and action.
The primary goal of a CSA channel leadership workshop is to educate and enable senior executives to guide their most important channel relationships to break from old paradigms and embrace powerful, new paths for system–wide differentiation and gain. Executive participants begin to rethink ways to make customer–focused channel strategy an essential and transparent part of business strategy. They leave the workshop newly energized and freshly skilled in ways to pursue – jointly and collaboratively – the new management discipline of effective channel stewardship.
Each workshop provides a balanced blend of executive education and practical application, and engages attendees in focusing immediately on accomplishing the two primary goals of channel stewardship – trust and transparency.
The optimal path to stronger channel partner relationships starts with a quick checkup. What’s the health of the relationship today? How effective does each company in the channel system feel its relationship partners are, how do partners rate the company’s effort, and how does the company score itself?
Not only does taking a baseline reading give everyone a rough sense of what’s going well and what isn’t, it also gets your partners in gear for thinking together about channel issues – which is the first step towards building trust at the executive level and, ultimately, transparency between companies up and down the channel.
Chicago Strategy relies on tailored one–on–one discussions, well–honed survey methods, and related analytical instruments to generate a clear picture. We facilitate follow–up partnership strategy workshops between companies and their channel members to generate fresh insights, new directions, confident decisions, and clear accountability and commitment to action.
A sample analytic used to facilitate deeper channel relationships is shown above. Ideally, initial results are discussed face to face by executives from across the channel system in the “safe zone” of expertly–facilitated Chicago Strategy workshops.