What is Sales Channel Marketing Management and Strategy?

What is Sales Channel Marketing Management and Strategy?

What is Sales Channel Marketing Management and Strategy?

The primary goal of a sales team is, of course, sales. Achieving that may be straightforward for small organizations with a clear, single sales channel. However, complex businesses with many sales channels can benefit from a more inclusive approach. A successful multichannel strategy engages marketing, distribution, and finance teams, among others. It may also spend equal amounts of time managing direct and indirect sales teams. This integrated approach can increase profits, but it can also increase management challenges. To reach the ultimate goal of more sales, managers should have a solid understanding of sales channel marketing and its many components.

Sales Channel Marketing Responsibilities

As noted above, a myopic focus on sales may not lead to more sales, especially in a large, interconnected channel sales strategy. An effective strategy identifies the best use of marketing and sales resources to increase collaboration and minimize conflict. To achieve those broad goals, a sales channel management strategy should align the efforts of in-house and external teams.

The Roles of Marketing, Sales, and Distribution

So what is channel marketing? What role does it have in a sales channel strategy? A channel marketing strategy supports a sales team by building awareness for a product and helping prepare a potential customer for interaction with a sales team member.

A channel marketing strategy may help prospects simply know a product exists. For well-known products, it may continue to keep a brand top-of-mind or reaffirm its core differentiators. During long sales cycles, a marketing team may deliver a continuous set of messages to potential clients to help prospects “warm up” for the sales team.

Historically, the distinction between the marketing and sales departments—the former responsible for leads, the latter for sales—has led to conflicts. When profits sag, marketers tend to claim that sales staff are failing to close quality leads. For its part, members of the sales team tend to argue that the leads are poor quality.

This potential source of conflict can quickly undermine an effort to develop a functional multi-channel strategy, which depends on deep collaboration. The need for collaboration may extend beyond the marketing and sales teams to include distribution partners as well. While the marketing and sales channels must deliver sales, the distribution channel must fulfill those obligations.

A dysfunctional distribution component can severely inhibit a business’s ability to deliver a product or service to customers. Thus, all three channels must work together to build a sustainable multi-channel strategy that promises customers persuasive benefits and delivers those benefits consistently.

Direct Sales, Indirect Sales, and Channel Conflict

Even within sales, there are important distinctions. Direct sales refer to those sales made by sales staff within the company. Indirect sales are those handled by third-party partners. This distinction has two primary implications:

  1. Sales channel marketing should support direct and indirect sales.

A channel marketing strategy may need to influence more than just end-of-line customers. It may also need to influence the partners that are part of an indirect sales strategy. After all, partners are interested in working with companies that will help them make money, too.

A complete sales channel marketing strategy may help consumers understand a product’s benefit and also help channel partners understand the profitability of selling that product. These demands on channel marketers often require a large team to develop targeted messaging for each party.

  1. Sales channel managers should seek to reduce conflict.

With multiple sales channels, customers may have a choice: buying directly from the company, through a wholesaler, or at the retail level. Companies seek to develop these channels to give customers increased access and choice, which may lead to greater overall sales.

However, this choice also raises the potential for conflict. Internal and external sales teams may compete for the same customer, which can lead to confusion and frustration. Successful channel sales managers monitor sales team responsibilities closely to minimize conflict throughout all sales channels.

Further Cross-Departmental Collaboration

A collaborative process may not end with sales, marketing, and distribution. Ultimately, a sales manager or VP of sales reports back to the CEO. During those conversations, the most important metric may not be the raw number of sales but rather the profitability of those sales.

To develop a profitable channel sales strategy, managers may need to work with a business’s finance department to determine the expense-to-revenue ratio for various channels. Beyond identifying the most lucrative channels, this knowledge can help forecast staffing needs and ensure a growing sales team stays within the bounds of company profitability.

Increased integration may concern managers accustomed to working more independently. Still, the demands of a multichannel strategy continue to offer benefits to those who increase collaboration within an organization as well as with outside partners.

How to Manage Sales Channel Marketing Effectively

The many responsibilities of managing sales and marketing channels offer opportunities for continual improvement. These are the keys to developing and sustaining a successful strategy.

Conduct Thorough Background Research

At the start of a new or expanded channel strategy, managers should ask three key questions:

  1. Who is the buyer?

In many cases, the answer will include multiple buyers. Those buyers may be consumers, wholesalers, retailers, or others. As part of an initial research phase, all potential buyers should be included, even if some are later dropped from the strategy. Assessing the full landscape for all potential buyers provides managers with an initial understanding of the full potential of a multi-channel strategy.

  1. Where can they be reached?

By identifying the potential places of influence, managers can begin to develop a sales channel marketing strategy to reach prospective customers. Those customers may yield a diverse list of marketing opportunities that include business publications and trade shows, as well as traditional direct-to-consumer channels like television or radio.

  1. How can they be reached?

This final question begins to assess the feasibility of reaching the target audiences. By understanding the potential cost of reaching certain consumers—such as developing, producing, and distributing a television advertisement—managers may begin to realize which channels will have the highest expenses. This advance information can help shift a marketing and sales strategy toward the most profitable avenues.

Take Advantage of Technology

Some sales staff or managers may be wary of adopting new technology. However, the use of a customer relationship management (CRM) system or partner relationship management (PRM) system has significant benefits for channel management:

Sales forecasting. To accurately forecast sales, managers need a steady stream of historical and contemporary sales data. A CRM or PRM allows sales staff to score leads based on the likelihood of a sale and the potential value of that sale. That information, in turn, can be combined to generate sales forecasts. By monitoring the accuracy of these forecasts, managers can help sales team members adopt better lead-scoring practices to improve the forecast’s accuracy.

Channel analysis. In a multi-channel strategy, managers benefit by learning more about the value of each channel. A CRM or PRM can segment lead and sales data by channel. In addition to helping identify valuable channels, the real-time information may help shift resources for maximum impact. For example, a sudden growth in wholesale customer leads may justify an increased investment in an email marketing campaign that targets their needs.

Combined analytics. Both a CRM and PRM combine data from marketing and sales teams. The assessment of sales data may influence the content of marketing materials. Similarly, the inclusion of marketing information can help sales representatives learn about a prospect’s past interactions before the sales conversation begins. The continual interchange of information between the teams can help create a more seamless experience for prospects.

The Demands and Benefits of Channel Marketing and Sales

The multichannel approach outlined in this article engages many components of a business simultaneously. A marketing team must generate leads from multiple customer types, and a sales team must work with inside and outside partners to form profitable relationships. Then, a business’s distribution must fulfill the promises made by the sales and marketing departments. Finally, all components are evaluated for their contributions to the business goals set forth by the C-Suite.

The development of a successful channel marketing and sales strategy can be fraught with challenges. Managers who are hesitant to increase collaboration and share data openly may struggle to overcome some of these common issues. Successful managers, on the other hand, benefit from remaining open to new internal and external partnerships, and to the deployment of the technology that supports them.

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Matt Goldman

Matt Goldman

Matt Goldman is a Content Marketer/Social Media Strategist for Tenfold. His writing has focused on social selling, marketing, as well as gamification.

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