Today, empowered b-to-b buyers research, source and price many products online. This research brings them in contact with a broad representation of channel partners, including online-only resellers, traditional resellers with an online presence, third-party vendors and auction sites. In this environment, partners often differentiate themselves by using aggressive online-price advertising that does not represent the market position of the product. This behavior can have a negative impact on the supplier’s brand while driving margin erosion and channel conflict. With legal restrictions on price fixing, what can suppliers do to ensure they are protected?
The solution: Institute a minimum advertised price policy (MAPP) in the channel.
A MAPP sets a minimum (or floor) for advertised pricing on defined products and offerings. Resell partners may sell the product at any price but may not advertise it below the defined minimum. Therefore, these policies are a marketing policy for pricing, but they are not price-setting.
If you are considering a MAPP, here are some ways to build an effective policy for your channel program:
MAPP should expressly allow the reseller to control customer prices beyond advertising. Check with your legal counsel to determine local state and country requirements. When done correctly, a MAPP can protect the brand, support higher partner margins and minimize channel distress.
If you would like more information on how to successfully align your channel pricing strategies with your channel management strategy, please contact us or consider joining us at 2016 Summit Europe.
Eileen has a deep background in developing channel sales programs that drive revenue and helping channel leaders gain insights into growth strategies and industry best practices. She has delivered multiple partner programs, successful partner recruitment and development efforts, and impactful field and partner enablement. Eileen brings nearly 20 years of channel experience to SiriusDecisions, having worked previously for companies such as Avaya, VBrick Systems, NetApp and Symbol Technologies.