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CH04 Channel & Customer Relationship Cost Checklist Worksheet

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Related Chapter: CH04. How Channel and Customer Relationship Reshape Price Structure Basis: KM048 (Channel and Price Structure), KM049 (Customer Relationship Cost) / primary_note: MN06

A. Channel Structure Check (based on KM048)

  1. Is our product/service using, or planning to use, a direct channel or an indirect channel as its core channel?

    • Direct channel: ______________________
    • Indirect channel: ______________________

  2. If using an indirect channel, what is the distribution margin / fee rate?

    • Channel name: ______________________ / Fee rate: ______________________

  3. If using a direct channel, does the business have the capability (people, systems, budget) to handle customer acquisition, delivery, and service on its own?

    • Capability in place: ______________________
    • Gaps: ______________________

  4. If price were set without reflecting channel-specific fees and distribution margin, would the business lose money the more it sells? (Check whether cost ratio + fee ratio + SG&A ratio together exceed 100%)

    • Cost ratio: ______ % + Channel fee ratio: ______ % + SG&A ratio: ______ % = ______ %

  5. Given the target customer, product characteristics, available resources, and pace of growth, is the current channel choice appropriate?

    • Judgment: ______________________
    • Rationale: ______________________

B. Customer Relationship Cost Check (based on KM049)

  1. What activities go into acquiring customers? (List each of people/systems/promotion)

    • People: ______________________
    • Systems: ______________________
    • Promotion: ______________________

  2. Is the cost of the above activities reflected in the current price structure (cost + margin)?

    • Reflected: ______________________
    • If not reflected, what change to price/margin would be needed to reflect it: ______________________

  3. How much does it cost to drive activities that lead to repurchase and additional purchases (customer relationship retention)?

    • Item: ______________________
    • Cost: ______________________

C. Overall Judgment

  1. Does the target margin still hold once cost, channel cost, and Customer Relationship Cost are all reflected?

    • Holds / Does not hold (mark the applicable item)
    • If it does not hold, what should be adjusted: channel composition / price / how the customer relationship is operated (mark the applicable item)

  2. Is there a process to revisit price when channel structure or order volume changes?

    • If yes, describe the process: ______________________
    • If no, when is the next review scheduled: ______________________