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.