Today’s interconnected world gives you more opportunities than ever to sell your products and services through multiple channels, whether internal or external, direct or indirect, online or on the ground. It’s likely, in fact, that you already use more than one marketing or distribution channel. But you may not have given much thought to how they can all work together to reach your best customers when they’re ready to buy. Here’s a strategic approach to multi-channel sales.
Let your customers decide.
"Companies don't choose channels; customers choose channels," asserts John DeSarbo, principal at consultancy ZS Associates based in San Mateo, California. "The most important thing to understand when establishing a channel strategy is the customer's preference."
Consider sales channels in terms of customer-product pairs. A customer may have channels to several products, and a product can be linked to multiple customers via multiple sales channels. "An important thing to keep in mind is that a customer is likely to use multiple channels in deciding whether to buy from you," DeSarbo says. "For example, you might sell certain things through your website, certain things through a field sales organization, and certain things that are sold by an intermediary. One customer might decide to use all of those sales channels, particularly if they buy multiple things from you."
A growing trend, in fact, is channel integration, in which customers may migrate from one channel to another depending on where they are in the purchase process. "Customers are increasingly handling the front end of their buying process themselves by shopping online," DeSarbo says. "They're engaging with companies through their websites, social media, and mobile apps when they're learning about a product, but when they ultimately come to purchase, they may want to buy in another channel."
Research industry best practices.
Once you understand your customers' preferences, DeSarbo recommends gaining an understanding of how your competitive set is going to market. "That usually opens up possibilities or sets up constraints," he explains. "If everybody in your market is selling one way, then you need to understand that."
Of course, many startups today are gaining a foothold precisely by establishing disruptive distribution models. Consider companies that sell razor blades or other disposable essentials by subscription, offering customers both convenience and savings. DeSarbo recommends caution, however. "There are many things you want to consider if you're implementing new channels," he says. "For example, do you have the influence in the industry to make such a change? "
Do a cost-benefit analysis.
Each sales channel, of course, has its own costs. Direct online sales may be the least expensive, but they will only connect certain customers and products. A full-time field sales team falls at the other end of the cost spectrum. Third-party distributors, intermediaries, and inbound sales teams would likely fall somewhere in between. Each channel has fixed and variable costs that must be considered. Given the volume of business expected to pass through any given channel, which approach will be the most effective? "It's important for a mid-size company to really understand that often they just can't afford to build a direct sales organization to serve certain customers," DeSarbo argues.
Maximize your channel mix.
With customer, channel, and cost data in hand, you're ready to prioritize channels and develop a holistic strategy. To take two extreme examples, you would likely deploy your most costly resource – your field sales team – to large customers and complex sales, while simpler sales to smaller customers may be handled in a more automated fashion online.
With so many channels available to get your products into the hands of customers it's difficult to know just where to begin. But by taking a methodical approach to your sales channel strategy, you can maximize the balance between your capabilities and your customers' preferences.
