HOW RATIONAL AND STRATEGIC IS YOUR CHANNEL PRICING STRUCTURE?

Consider the following channel pricing questions...

>	Are you leaving money on the table?
>	Are you getting what you pay for?
>	Are your discount structure programs aligned with your company's strategic objectives? Are there aspects of your discount structure that are actually working against your company's strategic objectives?
>	Do you have a rational channel discount program that is easily understood and explained, or do you have the "Let's Make Deal Program" where everyone has a different price and nobody really understands why?

	>	Do your channel partners understand it?
	>	Can your own sales force easily explain it?

>	Does your current structure reward the channels that support your products the most? Or are you unknowingly subsidizing poor performance?
>	Are volume discounts and growth rebates the only variables in your program?

	>	Are they weighted properly?
	>	Are the thresholds appropriate?

>	Do you have channel incentives that are designed to motivate specific channel behaviors?
>	Do you understand the value, role and application of front-end incentives in the form of discounts, versus back-end incentives in the form of a rebate?
>	How do other forms of channel compensation fit within your overall channel strategy (i.e., freight terms, special pricing programs, technical support, training, co-op or MDF funds, payment terms, etc.)?
>	If you use tiers to differentiate channel partners, do the tiers define differences in rewards and discounts? And are the tiers properly defined?

Are they based on what you value or what the customer values?

>	Do your current discounts minimize or enhance channel conflict?

If you are unable, unsure or completely in the dark about these and other critical questions that should be considered, your channel compensation is likely costing you significantly in a variety of ways (e.g., wasted margin dollars, loss of market share, lost sales to competitors, loss of mind share, and poor brand recognition among end-user customers).

What is the Solution?

For most manufacturers and service providers, channel discount structures literally involve tens of thousands of dollars and are highly complex. We understand that making major changes to your dealers/distributors/resellers channel compensation is a scary proposition. It is also an emotionally charged issue with your channel partners.

We also recognize that many companies believe a change in their discount structure approach may be needed, but are unsure where to start. Too often, managers are not sure if pricing to their resellers aligns with the goals and objectives they have established for the business. In addition, managers must contend with conflicting messages from the field sales organization and from channel partners regarding the effectiveness of their discount programs.

Frank Lynn & Associates has consulted numerous companies across a diverse set of industries in the redesign of channel pricing programs. To properly examine channel compensation, a systematic assessment of every aspect of your program, from strategic business objectives, legal constraints, and program metrics to management functions and organization design is required. Frank Lynn & Associates offers a "Channel Pricing Audit" as the best first step to resolving complex channel discounting issues.

The Frank Lynn & Associates "Channel Pricing Audit" process involves the following:

>	We will provide a list of data, materials, and information needed for the audit. A survey of questions will be distributed to key client personnel. These surveys will be completed and returned to Frank Lynn & Associates
>	Frank Lynn & Associates will schedule an initial two-hour telephone discussion with key managers that are familiar with the current discount approach, policies and programs
>	We will review the program information and survey results. Afterward, Frank Lynn & Associates will schedule one-on-one discussions with key management personnel and field sales representatives. This is done in a one-day session at the client's facilities
>	After the facilitation is completed, we will submit a report summarizing the pricing insights, conclusions and recommendations from the meeting that are likely to have a positive impact on the company and more effectively align with overall sales goals and market share objectives

The "Channel Pricing Audit" is not intended to deliver a newly redesigned and implemented discount structure. It is an assessment of your existing program(s) (or a newly developed program). It consists of a facilitated discussion with management and selected sales personnel to assess your existing channel pricing structure, policies and programs and organize an agreed upon set of next step activities.

It does not involve input from your dealers/distributors/resellers--it relies on an internal view of the program and Frank Lynn & Associates' experience.

If appropriate, the scope of the audit can be adjusted to include direct input from your dealers/distributors and resellers. Contact us to discuss a quote for this approach.

What are the Benefits of the "Channel Pricing Audit"?

Our proprietary approach will provide the following benefits/deliverables:

>	Our audit will identify if a change in your current program is warranted
>	The audit will assist management in establishing change priorities
>	The audit will identify opportunities to change your current program to more effectively change the desired behavior of channel partners
>	The audit will provide a forum to discuss alternative channel compensation programs and their potential fit and benefit to your company and products
>	The audit can serve as a critical review of a new or redesigned sales channel pricing system
>	The audit is a low-cost way to minimize unnecessary destructive channel conflict

Why Frank Lynn & Associates?

For over 30 years, Frank Lynn & Associates has been dedicated to one goal--helping companies design and implement effective and efficient go-to-market systems that deliver tangible business results. We help our clients create management and pricing systems that enable them to market, sell, deliver and support their products and services and drive growth in sales and market share.

The experience of the principals of Frank Lynn & Associates brings market and channel pricing insights based on hundreds of engagements from an extensive and diverse group of industries.

We provide in-depth knowledge and expertise dealing with the marketing and sale of products and services through both direct sales forces and indirect sales channels including: system integrators, value-added resellers, distributors, dealers, specialty retailers, catalogs and the Internet.

What is the Investment in a "Channel Pricing Audit"?

A principal of Frank Lynn & Associates leads each "Channel Pricing Audit." The investment for the audit, in most cases, is $7,900 plus travel expenses. (This price may vary if the audit involves multiple company divisions, pricing structures and channels.)

This price includes meeting preparation time, data gathering, survey management, phone conferences, management interviews, if appropriate and the on-site facilitations, discussions and recommendations.

Our "Channel Pricing Audit" is an excellent way to quickly determine if a change in your program is warranted. It is also an efficient way to receive feedback on a new program you wish to launch.

While the audit is not a redesign of your channel pricing program(s), if it is determined that changes are needed, the investment made in conducting the audit will be utilized by Frank Lynn & Associates and will reduce the overall cost of any proposed changes to existing programs or the creation of a new discount structure/compensation program.

If you schedule an audit, we will also provide you with the following additional value:

>	A complimentary subscription to our Client Communique newsletter, which is published three times each year and read by over 12,000 senior executives around the world (Value $300)
>	A 25% discount to our Marketing Through Distribution Channels and Discount Structure Dynamics workshops. We offer each workshop once per quarter at our corporate offices in Chicago, IL (Value $500)

Yes, I am Interested! What are the Next Steps?

In most cases, we conduct two "Channel Pricing Audits" each month, and we typically schedule them one to three months in advance. If you are interested, please contact Karl Edmunds, Vice President, at (312) 558-4866 to discuss the audit in more detail and to schedule convenient dates.

Are There any Options?

Yes, we offer a more extensive assessment for companies that want to expand the scope of the audit to include feedback and perspectives from end users and indirect channel partners. If you are interested in a more in-depth evaluation, then we will work with you to tailor the audit to best meet your requirements.

Our Guarantee...

Our proprietary compensation audit works. We have over 30 years of proof. Our guarantee is simple, if you are not completely satisfied with our audit, we will resolve your issues or waive our professional fees.

2010 SCHEDULE

September 29, 2010

Strategic Issues in Distribution

New routes to competitive advantage

September 30, 2010

Pricing Strategy: How to Design and Implement Effective Channel Pricing

Realistic and workable approach to developing effective channel pricing strategies.

October 20, 2010

Marketing Through Distribution Channels

Use data-driven channel marketing to drive growth in sales and market share.

October 21, 2010

Professional Sales Channel Management

Using proven management tools, frameworks and methods to prepare channel managers to drive sales and market share through indirect sales channels.


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