Knowing what is happening in the marketplace is vital to the success of your enterprise. Monitoring emerging trends, customer likes and dislikes, and understanding unmet customer needs can determine how rapid a rate of incline or decline your business experiences. Companies spend millions of dollars conducting surveys of customers, potential customers, industry experts and key opinion leaders to determine if their products or services effectively meet, exceed or miss market expectations.
Many companies utilize channel partners to flow products and services to the marketplace. Channel partners can take the form of wholesalers, distributors, manufacturer’s representatives, franchisees, online consolidators and retail stores.
The reputation and actions of your channel partners will directly impact your company’s brand and reputation. Therefore, it is vital that channel partners are thoroughly vetted.
Additionally, government regulations require U.S.-based companies to know who they are doing business with and ensure to the best of their ability that partners are legitimate enterprises with no ties to terrorist organizations and are not directly or indirectly providing support to terrorists or terrorist organizations.
Conducting in-depth due diligence on your channel partners prior to entering into a business relationship, along with periodic follow-up reviews, will not only dramatically reduce your risk exposure but will ensure that your company remains in compliance with U.S. laws and regulations.
Clear expectations of confidentiality, performance, behavior, ethical business practices and reporting requirements should not only be clearly and explicitly explained in the written contractual agreement, but your channel partners should be thoroughly trained on the obligations and expectations delineated in the contractual agreement. The channel partners should also receive annual refresher training on the contractual requirements. Annually, channel partners should be required to certify that they understand the provisions of the contractual agreement and are in complete compliance or provide detailed explanations of any instances of any non-compliance.
Once a channel partner has been thoroughly vetted, a detailed contractual agreement signed and the training completed, it is incumbent on your company to conduct ongoing monitoring of their compliance with applicable laws, regulations and the terms of the contractual agreement. Additionally, many companies have had their reputation badly tarnished by the actions of a channel partner. For example, the Internet videos that went viral of the disgruntled teen doing unsanitary things to the pizzas he was preparing for delivery to customers. Not only did the companies named in these videos experience significant consumer backlash, but the entire fast food industry faced heightened consumer and regulatory scrutiny.
It is vitally important for companies to actively monitor the marketplace to ensure that they do not risk missing new trends and opportunities as well as impending changes to standards, laws or regulations. Active monitoring allows companies to know when a competitor is enhancing features of an existing product or service, unveiling a new product or service, or implementing price changes. Effective monitoring can also provide early warning relative to a competitor acquiring or merging with another company; divesting itself of a key component of its company; terminating a supply chain or channel partner; entering or exiting markets around the world; or discontinuing a portion of its current product or service offerings. Additionally, marketplace monitoring provides early notification when a competitor stumbles, experiences quality issues, initiates a product recall, or becomes embroiled in an official investigation into allegations of wrongdoing.
Companies with effective marketplace monitoring programs have gained significant advantages through the visibility and insights they have gained. Whether making changes to current product or service offerings or rushing new products and services to capitalize on market opportunities, the earlier that management has sufficient information to implement new strategies, the earlier potential market share gains can be realized. Additionally, the earlier that a company becomes aware of potential issues with channel partners, government regulators or new and emerging forces that are manifesting themselves in the marketplace, the better prepared the company can be to effectively manage those risks.
About the Authors: Jerry J. Brennan is the founder and Chief Operating Officer of Security Management Resources (SMR Group), the world’s leading executive search firm exclusively focused in corporate security. Lynn Mattice is Managing Director of Mattice and Associates, a management consultancy focused at the development and alignment of Enterprise Risk Management and Business Intelligence Programs, as well as Intellectual Property Protection and Cybersecurity.