Ah, distribution. So-called "channel conflict." What I love is when companies forget that their business isn't about distribution, its about designing a kick arse product and maintaining its relationship with its consumers. I should only need to mention the automotive industry in this context as one of the best examples of a distribution channel hijacking a company's focus. Ford, GM, Honda, Nissan, etc. I've consulted with 2-3 myself. EVERY company I've personally done work for wants to CONTROL its sales and service experience because its distributors has been pillaging its customers with horrendous sales experiences and burning down the rest of the relationship in the service counter where service managers drive over 50% of a dealership's revenue. Such absolute BS has given rise to certain companies taking stronger hold of the experience: Saturn, Hummer, Lexus. I worked with one that FUNDAMENTALLY is going to change the way you buy their cars because they can't stand their dealer's practices.
Interestingly enough, I've also consulted for a consumer package goods company (like Johnson and Johnson and Proctor Gamble) that had the same issue. As it turns out, CPGs have zero relationship with their customers because the darn grocery stores stole it away from them. Its the grocery stores that collect all the customer buying behavior and control how the shelves are stocked with goods. So this company is trying to create a relationship directly with customer, working with large grocery chains to drive business into their stores, but maintaining relationships directly with the customers of certain products.
So, what has this to do with EC? Their industry has probably the craziest distribution chain in the world, besides that of honey. We all know how hard it is to find all the products you want in the same retail store, and that's partially due to the distribution chain's antiquated structure and partially due to the fact that stores simply can't stock every $10K amp, $5K CDP, and a range of inexpensive items for the normal hi-end consumer who is not yet an audiophile (in the $1-2k range of components). Its also partially due to the fact that many of our favorite esoteric companies can't manufacture enough products to sell to the mass market via Best Buy, etc. Bose, and say whatever you like about their products, has done a GREAT job at recognizing that customers come #1. They sell goods in all sorts of channels: retail stores, company outlets, online direct, online retail, direct via TV commercials and magazine articles, etc.
My point is that distribution isn't a revenue and CRM strategy, its a cost strategy. If you let your cost strategy drive your business, then you end up in the status quo. If you let your CRM strategy drive your business, everything suddenly changes. EC's priciple problem is that its European, and it thinks that distribution is a country-to-country thing while the EU has open trade and free borders. No passports are required to go anywhere. In a very small continent, it'll take you a couple of hours by train to get to 2-3 different countries. Customers routinely shop where the bargains are. So, EC tries this crazy anti-competive distribution scheme that keeps every country in its own box, pleasing its distributors, but screwing their customers.
I'd suggest that EC reorient their focus and figure out how their customers like to buy their products, rather than how their distributors would like customers to buy their products...
Interestingly enough, I've also consulted for a consumer package goods company (like Johnson and Johnson and Proctor Gamble) that had the same issue. As it turns out, CPGs have zero relationship with their customers because the darn grocery stores stole it away from them. Its the grocery stores that collect all the customer buying behavior and control how the shelves are stocked with goods. So this company is trying to create a relationship directly with customer, working with large grocery chains to drive business into their stores, but maintaining relationships directly with the customers of certain products.
So, what has this to do with EC? Their industry has probably the craziest distribution chain in the world, besides that of honey. We all know how hard it is to find all the products you want in the same retail store, and that's partially due to the distribution chain's antiquated structure and partially due to the fact that stores simply can't stock every $10K amp, $5K CDP, and a range of inexpensive items for the normal hi-end consumer who is not yet an audiophile (in the $1-2k range of components). Its also partially due to the fact that many of our favorite esoteric companies can't manufacture enough products to sell to the mass market via Best Buy, etc. Bose, and say whatever you like about their products, has done a GREAT job at recognizing that customers come #1. They sell goods in all sorts of channels: retail stores, company outlets, online direct, online retail, direct via TV commercials and magazine articles, etc.
My point is that distribution isn't a revenue and CRM strategy, its a cost strategy. If you let your cost strategy drive your business, then you end up in the status quo. If you let your CRM strategy drive your business, everything suddenly changes. EC's priciple problem is that its European, and it thinks that distribution is a country-to-country thing while the EU has open trade and free borders. No passports are required to go anywhere. In a very small continent, it'll take you a couple of hours by train to get to 2-3 different countries. Customers routinely shop where the bargains are. So, EC tries this crazy anti-competive distribution scheme that keeps every country in its own box, pleasing its distributors, but screwing their customers.
I'd suggest that EC reorient their focus and figure out how their customers like to buy their products, rather than how their distributors would like customers to buy their products...