Channel development is a strategic approach for all those companies that decide to establish a better or broader commercial relationship between themselves and your customers.
Channel development consists of selecting one or several companies (consultancy, integrator, reseller, MSP, etc.) to distribute your products or services so that they are more and/or better consumed by your customers.
In other words: a channel model (or indirect or partner selling) is one that involves an ecosystem of companies that depend on each other and collaborate in the process of selling a product or service. What you basically do is amplifying and expanding your commercial network so these other companies sell or distribute your solution for you.
But, before we continue… What is a sales channel?
A sales channel is the means through which products or services are shown to consumers, enabling the relationship between the company itself and the potential customer. It can also be an outreach channel to promote the product or service being offered. An advertising platform for the public to come into contact with the items and become customers.
It is about attracting both those who already know the brand and those who do not. For this reason, it is very important to choose the right sales channel and to take into account the outlay to be made on it. A manufacturer’s products will not be shown in the same way as a wholesaler’s or a retailer’s products.
Now, back to channel development.
The objective of having an indirect sales model is to sell more.
This consideration of implementing a sales channel development strategy in your company, specially if you sell, for instance, technology solutions (SaaS, customised software, etc.) seems very obvious, because a model like this offers us certain advantages that we did not take into account:
- Interaction with customers that you cannot reach directly.
- To be aware of and learn about the market’s novelties/needs.
- Provide more volume/capillarity to your products.
- Decrease your commercial effort.
- Provide value-added services to your product or service.
- Open new markets or reach new segments.
Once we have found the need to sell through partners (channel development), for example, we want to go to a very specific market segment to which we do not have access or enter a new country without the capacity to hire our own sales force, we must follow a series of steps:
- Strategy and design.
- Identification of potential partners.
- Onboarding and activation.
- Channel management.
The decision to incorporate an indirect or a distribution channel in your sales strategy should result from a well-argued answer to the questions you should ask yourself before building a new distribution channel.
10 questions to ask yourself before implementing a channel development strategy
- What value do distributors bring to my product or solution?
- Do the distributors complement my product or service or do they only resell it?
- What is the relationship that potential distributors have with the end buyers of our products and solutions?
- What should these distributors be like multi-brand, exclusive, specific to my product, from sectors related to mine…?
- How many distributors should I have?
- Where should they be?
- What relationship should we build with our distributors? What do we have to offer them so that they will sell us our products?
- What should we offer them? What should we demand from them?
- How do our competitors relate to their distribution channels?
- What actions should we take so that our distributors prefer to sell our product over others that we distribute?
Once these questions have been answered, we will have a clear vision of whether or not it makes sense to incorporate a distribution channel or a channel development strategy in the sale of our products.
If you are considering the possibility of developing a distribution or commercial channel, we, at Springboard35, are experts with more than 20 years of experience. Get to know us and how we can help you expand your business by expanding your partnership’s network. Don’t hesitate more and contact us at firstname.lastname@example.org and we will advise you on how to make the best decision for the commercial development of your company.