Channel Strategy Challenge
The Insight to Action team was asked by Holganix, a soil amendment company, to develop a go-to-market channel strategy. Their theme for the year was “Probability, Simplicity and Leverage,” and there was a desire to achieve focus across channels. The company perceived it was pursuing too many different segments that required very different channel strategies. Working with the sales and marketing team, we followed a disciplined research approach to deliver the objective and ensure alignment.
Synthesize Employee and Partner Expertise to Frame Market Hypotheses
In this first step, we conducted in-depth interviews with stakeholders within and outside the organization. The brand has a partnership with one of its largest distributors, so including distributor voices as well as internal management team voices was critical. We also reviewed secondary sources, and the team segmented the existing customer base.
The outcome of the hypotheses was 14 different market segments for initial exploration. This included seven segments in the “Base Business” markets and seven segments in the “Expansion” markets. The B2B markets included:
- landscape firms (small, medium and large)
- golf courses and country clubs
- pro sports fields
- parks & recreation
- legal cannabis producers
- small organic farmers
- sustainable farmers
- large organic farmers.
There was also one B2C segment: passionate home gardeners.
First Cut Investigation of Market Segments and Channel Strategy
A three-week, high-level investigation was conducted for each of the 14 different market segments in the second step. Channel strategy and how the B2B segment was reached was a key area of focus. Other factors examined were size, growth, profitability, cost to serve and fit with the client’s brand vs. competitors. Research sources included industry experts and secondary data sources.
After this high-level investigation, the team reviewed the findings and used criteria to select the four high-priority segments for deeper research and consideration.
Deeper Examination of High-Priority Segments
In-depth interviews were then completed with current customers, lost and reduced customers and prospects in each of the four high-priority segments as a third step. These included small landscape firms, medium landscape firms, large landscape firms and super whales (very large landscape firms).
Each interview examined three major areas:
- Business Overview
- Soil Amendment Specifics
- Brand Awareness, Impression, Marketing and Sales Reaction
The findings clearly identified growth areas, pain points, business focus (e.g., commercial vs. residential), organic perspective and more. The most popular marketing and sales approaches tied to the pain points and business focus.
Cultivating Channel Strategy at Target Selection Summit
The team held a target selection summit as the fourth and final step and identified the specific approach to reaching each priority segment and its channel strategy. As Holganix CEO Barrett Ersek observes:
“As small businesses, we all have limited resources. We need to be careful on the shots we take, to use our bandwidth effectively. This market study gave clarity to do that. That combined with breaking the industry bottlenecks to drive growth.”
For instance, the smaller- and medium-sized landscape firms align well with the distributor. It is not cost effective to reach them with direct sales efforts. They were selected as the highest priority, and the role of the manufacturer is to train distributor staff, provide website and app backups, and offer videos and webinars. They were considered the best fit given the strong, healthy partnership with the distributor.
The second priority segment included larger landscape firms and required a different channel strategy. These firms expect to see the manufacturer at trade shows and demand that sales representatives call on them directly. They are not well-reached by the distributor. The company chose to selectively pursue these as they are often high value.
It’s common in B2B to see a company with many different markets it can address, with each market requiring a different channel strategy. The team was much more confident in their decisions after taking the time to carefully examine the choices, use criteria and data, and then align. They succeeded in delivering on “Probability, Simplicity, and Leverage.”
Can your channel strategy benefit from research and careful analysis? Get in touch with the experts at Insight to Action, contact us today.