How Do You Choose Sales and Marketing Channels?

Before the Internet, there were essentially two types of sales channels: direct and indirect. Once a company chose its sales channel, it built a corresponding marketing strategy to support it. If you were a brick-and-mortar store, that’s where you sold your products. If you were a wholesaler, you sold through distributors or resellers. It was fairly straightforward.

Today, as an ecommerce business owner, you may be thinking that your channel is obvious: the Internet. You have a website, you offer products, and you promote your products through various Internet marketing channels like pay-per-click ads and comparison-shopping engines. You have a Facebook Fan page. You utilize search engine optimization and have a “1 click” checkout in your shopping cart. What else do you need?

The answer depends largely on your customers and products. It may include leveraging other direct marketing channels like display ads within the Google or Microsoft networks or on Facebook. It could include affiliate partners marketing your products, print ads, comparison shopping feeds, or product ads on marketplaces, such as Amazon.com.

Your strategy may also include indirect marketing channels like blogs, and customer-engagement strategies using social media, public relations, speaking engagements, newsletters, contests, and sweepstakes.

On the sales side, is your own website really reaching your entire target market or do have products that could also be sold in marketplaces like Amazon.com, eBay.com, Sears.com, and Buy.com? Should you open a wholesale store or is your product better suited for direct consumer sales? Are there niche online stores that would better suite segments of your market? Would you benefit from adding a telesales staff to increase your up-sells to engaged consumers from your website?

There are no simple answers. To highlight the complexity of channels today, consider Apple. It sells directly and indirectly. It has its own brick-and-mortar stores and brick-and-mortar resellers — sometimes directly adjacent. Apple sells its own products, and it also makes tremendous revenue and profits from reselling music and apps. It has upended the traditional notion of sales channels. Yet both Apple and its partners continue to flourish. Not every company can be the next Apple, but we should all learn from its success.

Choosing Sales Channels

Your strategies for sales channels will influence the marketing channels you select. First, decide whether you want to sell directly or indirectly to your target consumers. If you have your own online store, you are already selling directly. But, many successful ecommerce businesses never sell products directly. They market exclusively through indirect channels like marketplaces. To the consumer, this is a direct sales channel. But if you sell your products or even have a microstore within a marketplace, these are really indirect sales channels. If you sell on Amazon.com, for example, that company owns the customer experience. It collects the money, sets return policies, and risks its reputation. Other marketplaces include Sears.com, eBay.com, Newegg.com, Buy.com, and Esty.com.

Another indirect channel is affiliates. You may have affiliates that sell your products or act as a marketing channel. Either way, this can be a powerful channel.

If you are a manufacturer or distributor, you should evaluate selling through channel partners, directly to consumers, or both. This is an area of great change. When Proctor & Gamble, for example, decided to market diapers directly to consumers via an online store, it created much angst among its partners and resellers. I foresee huge change in this area, with manufacturers selling increasingly through multiple channels, including their own websites.

Aligning Marketing Channels

Once you have selected your sales channels, you need to develop the marketing channels to support them. Will you choose indirect brand marketing, or direct marketing with a call-to-action that links to a shopping cart?

Direct marketing generally means targeting a specific message for your product or service to the end consumer. Most ecommerce businesses use search marketing strategies to ensure that their ecommerce stores are visible to search engines; search engines still deliver the highest volume of traffic to stores. But, there are many other direct marketing channels to consider, such as the following.

·         Email marketing.

·         Search ads.

·         Display banner ads.

·         Print ads.

·         Radio or television ads.

·         Direct mail.

·         Affiliate networks.

·         Remarketing.

Indirect marketing channels are where the biggest changes have occurred in the last decade. Indirect channels generally are used to create awareness for your products or brands.

The emergence of social media continues to shape the landscape of brand and indirect marketing. Choices for indirect marketing are too numerous to list, but here are some key options to consider.

·         Social Media. Facebook, Twitter, LinkedIn, Pinterest, Tumblr

·         Network ads. Google’s AdSense ads, for example.

·         Blogging. Your company or personal blog.

·         Thought leadership. Contributing and commenting on authoritative and industry related websites and blogs.

·         Press coverage. Public relations campaigns.

As you evaluate various channels, consider the factors that lead to sales and impact profits, such as traffic, costs per-impression or per-click, and conversion rates. Look at the impact on the other areas of your business model. Ask important questions about each potential channel, such as:

·         “Do you have the staffing to support a social media strategy, or will you need to outsource those activities?”

·         “How much will that outsourcing cost at what level of commitment?”

·         “If you sell wholesale, can you and your suppliers support the level of inventory required?”

All sales and marketing channels require infrastructure and organization. I’ll address those issues in the coming weeks.

Parting Thoughts on Establishing an Effective Field Marketing Organization

• Don’t separate demand generation from dead management
• Don’t hire inexperienced people as leaders
• Don’t have a lead mentality and measure things as cost per lead (CPL) – cost of customer acquisition is what matters
• Resist the temptation to rank individual programs to whack the poor performers.  Whacking things is fine if viewed in the context of an integrated multi-touch intitiative
• Understand that Field Marketing, regardless of whether it sits in Sales or Marketing, is part of the Sales process
• Have a seat, a respected seat, at the Sales planning table at the area or regional level
• Take responsibility to work with product groups to package (not build) products into compelling solutions (this can be solely with internal products and services or with external partners)
• Have skin in the game—variable compensation for a Field Marketer has to be 25%-50% of the total compensation package and has to be tied to the geographies that are supported
• Automate systems for accountability
• Establish, learn and iterate processes so that they support the business and do not become sales inhibitors

Channelizing the Global Market - Tophawks.com

In this sizzling summer, we all have bought a can of chilled Coke to avenge our thirst. It is a point to be pondered, how the Coke became such a popular company, conquering the market across the globe. The answer is channel sales.

Channel Sales is basically, a method of distribution used by a business to sell its products, usually by dividing its sales force into groups that focus on different selling conduits. For example, a company might implement a channel sales strategy to sell its product via an in house sales force, dealers, and retailers or by direct marketing. In other words, channel marketing is including a third party called re-seller, the sales force in order to expand in a global scenario.

It might apparently be easier to not involve any middlemen and sell the product directly. But this cannot assure that the product will reach to the wider section of the global market. Therefore, it becomes necessary to incorporate intermediary, so as to reach larger section of the market.

Retail Marketing can be a helping hand when considering channel sales, for example, Microsoft. Microsoft’s products are sold through ‘Channel Sales’ because Microsoft would have become a retail operation in order to achieve the same level of global sales. This would hugely increase their costs and still not be as effective as ‘Channel Sales’.

Channel Sales is like outsourcing the costs of having your own far-reaching sales operations, whilst still retaining an excellent portion of the sales profits. These days the relationship between the seller and the re-seller is much closer, allowing for better cooperation and coordinated strategies.

Channel Sales doesn’t just mean shipping your products off to a third party and hoping for the best. Channel Sales means keeping your outsourced sales teams up to date with your products, ensuring that they are adequately informed and regularly updating them on changes and issues in order for them to function at their best. Nonetheless, this is significantly less costly than training and maintaining your own sales teams. Particularly with the current global economic problems we are all facing, any opportunity to save money and increase profits has to be considered a benefit. This type of outsourced sales through partnerships with re-sellers is effective for strategic growth and for the increase in incremental revenue for the vendor.

The main benefit of working with a Channel Sales provider – a re-seller, is that you can rapidly expand your business without having to rapidly expand your entire business operation. Of course, if you then wish to slow any aspect of your business down, you can stop supplying your re-sellers with certain products or introduce new ones with little fuss. All of this costs the vendor nothing in terms of initial outlay; the cost of Channel Sales comes after the sale is made. Overall, it doesn’t have to be an either/or decision; companies can employ channel sales partners in order to get the most expansive sales growth. Thus, channel sales can be prove to be the best option, if considering expanding in the global market. Sometimes, asking for a little help can be a lot profitable. Isn’t It?