Channels—pipes that connect offerings to customers—provide the necessary touch points to market, sell, and support products and services. Channels could include field sales reps, strategic allies, business partners, master or local distributors, integrators, value-added resellers, manufacturer’s agents, brokers, franchises, telemarketers, telesales, agents, television, websites, email, extranets, e-marketplaces, social media and, depending on your market, ten or fifteen other channels. These channels can provide three kinds of touch points:
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One-way channels
These are static channels where information flows from a business to customers e.g., direct mail, promotion, advertisement (TV, radio, newspaper, Internet), products, etc. -
Two-way channels
Channels where actual communication happens i.e., information flows between you and your customers, allowing you to make a sale. These channels include: sales reps, call centers, partners, distributors, value-added resellers, retail stores, your service team, social media tools, etc. -
Multi-directional channels
These are the channels that not only provide a link between you and your customers but allow your customers to spread the word about you, reach other customers, and build a clan. These channels also allow you to reach friends of your customers, hence building word-of-mouth marketing. These channels include: blogs, emails, demos, videos, social media, forums, web, mobile, etc.
Implementing all or even a handful of these channels will extend the reach of your business to a diverse customer base. For example, if a business is selling only through its field sales force, its reach is limited by how many salespeople it can support and how much it can sell. Now, if the same business also starts selling over the Internet, it can suddenly reach the whole world! While the business is at it, how about setting up a call center in India, so it can provide the best customer support at a fraction of the cost?
Such was the rationale behind many channel initiatives that started as a direct consequence of the relentless pursuit of owning the total customer experience. The result: maximum flexibility for the customers, hence increased revenue growth for world-class companies.
As we know, for every world-class company that gets it right, there are 10,000 companies that are not cutting it. The telltale signs are familiar: slow sales growth or increasing sales costs, or both; an inefficient distribution network in which only a tiny fraction of partners do any real selling; poor results from web initiatives; conflict between channels; "dormant" go-to-market IT solutions, such as ineffective and incorrectly used CRM packages; and an ever-expanding inventory of products and channels that generate few, if any, tangible business results1.
It is not that we laggard companies are not doing their best, it’s just that they overlooked one key point: The quest for owning the total customer experience is not about building as many channels as possible and throwing them in the marketplace for customers to use as they see fit. It is about providing the right experience to the right customers in the right markets.
Most of us didn’t do this, so now we are in a situation where we have multiple channels—salespeople, Internet, distributors, partners, etc.—that are not producing results. Our selling cost is hitting the roof, and our profit margins are shrinking. On top of it all, we are in the midst of recession. What’s the solution?
Next chapter "From Multiple Channels to Integrated Multichannel Selling" discusses it in detail.
Related:
Reference Material:
1. Go To Market Strategies by Lawrence Friedman