In any business, large or small, having the right routes to market is a crucial component for long-term success and growth. You can have a world-beating product or service, but if it is not being marketed, promoted and delivered with optimum efficiency, your business will be fighting a losing battle.
For a home business, an effective channel marketing strategy can be the difference between success and failure. The average home worker does not have the luxury of being able to simply recruit a skilled and experienced channel marketing manager, so the chances are, these are skills you will need to develop for yourself. Here, we take a closer look at the unique discipline of channel marketing.
What is channel marketing?
Your sales channels are the means by which your product or service is delivered from you to your end user. Every business is different in the way these operate and the number and complexity of the sales channels it uses. To take a couple of examples, a web designer might work directly for clients, having little use for channels, while a business producing handmade soaps might sell through department stores, gift shops or even supermarkets.
Channel marketing is the act of finding the right parties to deliver your product or service to market and then creating and managing an effective partnership.
What are the challenges?
Channel marketing calls upon a broad range of skills and disciplines. These include business strategy, operational management, relationship management, and sales and marketing strategy. There are also aspects of pricing, promotion and contract negotiation to consider.
If your business is in its infancy, you will need a clear understanding of all these different facets of a channel marketing program. That means devising a strategy for selecting the most appropriate partners, getting them on board and then working alongside them to get the whole program working, while adhering to your underlying brand values and ethos.
Sometimes the most successful channel marketing partnerships come from the most unusual directions. It’s not just a case of small companies making it big through a lucrative supermarket contract, such as Levi Roots, the darling of MBA lecturers the world over and the inventor of Reggae Reggae Sauce. Even the biggest companies can change their whole sales strategy for the better with some innovative thinking – this case study from AT&T is a prime example.
So if there is one skill that is important above all others in channel marketing, it is the ability to think outside the box. Grocery stores have evolved from food shops into places where you can also buy toys, stationery, clothes, electronics and even personal insurance because channel marketers spotted an opportunity.
Channel marketers also need to be experts at building relationships. Channel marketing partnerships need to be exactly that – partnerships where both parties are contributing and working together. That means having the ability to see the business relationship from both sides, and to understand what drives and motivates the other party.
On top of all that, a channel marketing professional must possess a good grounding in traditional marketing strategy. Relationship building is great, but the ultimate goal is to sell your product or service to your end users, and that means understanding the marketing mix and establishing the right strategies in terms of pricing, promotion and so on.
Developing your channel marketing skills
It is relatively recently that business schools have fully acknowledged the distinct skill sets that are needed in channel marketing. You can now study for a formal qualification in Channel Partner Marketing that will cover all the above points and more. It’s a great way to build on your existing sales experience to be able to get out there and find, develop and nurture those all-important sales channels.
Types of channels
Finally, let’s take a look at some of the different types of sales channels you might consider. The breadth and variation really brings home the diversity of channel marketing.
- Retail – this is, perhaps, the most obvious type of sales channel, where you sell through a physical shop or showroom.
- Wholesale – your products are purchased in bulk and then further distributed to other channels.
- Ecommerce – the ecommerce space is getting ever larger. It might involve direct selling through your own website, but increasingly, home businesses choose channels such as Shopify or Amazon.
- White Label – popular in the clothing sector, this is where products are rebranded as “own label” by resellers such as department stores.
- Value Added Resellers – this is a channel where the partner adds something to your product or service, such as a systems integration specialist who supplies, customizes and optimizes your software.
- Agents – intermediaries who are essentially your representative.
Clearly, each of these requires its own approach and will have very different needs and expectations from the partnership. To get the most out of each channel, you will need to adapt your strategy accordingly.
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