“We’re taking an API approach and working more with our partners who want to go there.”
That was the quote that stuck with me after listening to a senior marketing executive from Schneider Electric a few weeks back. I had been in Chicago for three days, participating in a panel discussion and taking in a number of conference sessions, but this one quote kept my mind spinning. Before we talk about the various implications of the API approach, let’s first define it.
What does taking an API approach mean, exactly?
Technically speaking, API stands for Application Programming Interface, but there is a danger in being too literal with our interpretation. When Schneider Electric’s executive introduced the API approach, she went on to describe it as integrating with channel partners at a deeply technical level (think tight ecommerce connectivity and integration between the manufacturer and distributor), with significant implications spanning the entire sales funnel, from co-op marketing investments to cooperative selling and everything in-between.
I just can’t help but think about the downstream implications of the API approach. Whether you adopt a similar approach or your competition does, manufacturers will undoubtedly be impacted. The API approach presents a shift for distribution partners and, I think, contains some broader lessons for marketers regardless of industry. Let’s unpack that a bit.
Implications for Manufacturers
The API approach changes things for manufacturers in part because it changes their relationship with channel partners and, potentially, their relationship with customers. On the plus side, it’s rather easy to imagine how manufacturers could gain administrative efficiencies at scale using the approach, while also gaining deeper visibility into the entire buying process and potentially a greater understanding of end customers. Beyond that, the API approach—deep technical integration with channel partners—means that you’re weaving an increasingly complex and intricate web in your channel relationships. Of course, the more complex the knot is, the harder it can be to untie.
Manufacturers taking this approach would also gain options. Deeper knowledge of customers and insight into the buying process could be leveraged in any initiative to serve customers directly, in addition to opening up varied paths for channel partner optimization.
And as much as the approach can spell options and opportunity for manufacturers, I can see how distributors may not be as keen on it all.
Implications for Distributors
Laggard distribution partners slow to digitally transform their marketing and sales engine risk being left out in the cold.
Unfortunately, these distributors wrongly believe they can use personal relationships at the local level to maintain a stranglehold on customer relationships. Interestingly, if you ask their leadership, every single one of these distributors will tell you that the buying process will eventually be online. However, they wrongly assume that the buyers’ transition to digital will be gradual—that they will see it coming and have time to adapt slowly. The truth is, change will come fast.
In many cases, they’re already losing share of wallet with existing customers they assume to be loyal, and they just don’t know it yet. B2B buying is undergoing a generational change at the same time as many leading manufacturers are getting really good at servicing customers directly. In short order, distribution partners challenged to find new ways to add value in the middle of that relationship will find themselves removed from it entirely.
Implications for Marketers
First things first, if you’re reading this, you already know if you and/or your marketing team is capable of operating at a level where implementing an API approach is even possible. Growing digital capabilities—both personally and team-wide—has been on the to-do lists of marketing executives for more than a decade, and that means more than understanding SEO basics and what a CMS is. The API approach speaks to deep ecommerce know-how coupled with extensive distribution channel experience and knowledge of how that channel can operationalize digital tools.
Beyond the digital professional development imperative lies what I think is an even larger consideration. I believe that people, generally—and marketers, specifically—tend to underestimate the compounding impact of iteration. For almost everyone, implementing an API approach or any such similarly complex digital undertaking is uncharted territory. To me, that means that it will take time, trial and error, and ongoing optimization and iteration to arrive at the true promise these approaches can deliver. It all adds up to a situation where advantage will accrue disproportionately to early movers, with an increasing gulf separating those who “get it” and those who don’t.