Industrial manufacturers, take a page from the financial services playbook

A few years back a friend of mine who ran a smaller mutual fund management company asked me to look at ways for his firm to attract higher caliber brokerage firms (their channel partners) to sell their products to investors.  Being focused on industrial products for most of my consulting career, I jumped at the chance to learn about another industry (and to subsequently apply those learnings to my industrial clients).

I’ll never forget going through the process of interviewing employees of the mutual fund company and their channel partners.  One statement I heard over and over again was “Returns just have to be good enough; what really drives our success is the manner in which we service the brokerage houses”.  I was floored.  How could it be that getting the best returns possible wasn’t the highest priority for every mutual fund company?

My client explained it’s because investors buy what their brokerage sells.  They trust the brokerage will do a good enough job determining the appropriate funds.  Many investors who buy mutual funds simply don’t have the time to do the research themselves.  The mutual fund company understood that and focused its efforts on making itself as attractive as possible to the brokerages.

For whatever reason, many industrial manufacturers have been slow to get this.  They spend most of their efforts building the best products for end-users, but give insufficient thought to creating a value proposition that makes channel partners want to carry, invest in and emphasize those products.  This needs to change and change starts by manufacturers understanding the quality of their channel partner value propositions in detail.

By the way, since learning this little tidbit about the mutual fund industry, I’ve been meaning to do a little research to find better returns for my own investments, but I just haven’t had the time.  Maybe that’s the point.

Bart Schwartz, President / ICR / 630.503.6093

Channel Partner Feedback, Indirect Channel Best Practices, Indirect Channel Performance, Industrial Manufacturers

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>