Sales channels are an integral part of marketing, without them it is impossible to imagine the growth and development of a company. But few people understand what it is and why they are needed.
In simple words, a sales channel is a way of attracting an audience to a company.
Each company chooses the most suitable sales and sales channel for it in terms of finances and ease of implementation, and with the help of it it attracts new customers and advertises its goods. Therefore, there is no single structure of sales channels. All their divisions are conditional, and if desired, the company can even come up with its own sales method, improving the existing one or finding a radically new method.
But if we still talk about the conditional division of this part of marketing, then often the sales channels are divided into:
- Active.
- Passive, or incoming.
Active
The most effective method for comparing results. Active sales channels imply and practice personal communication with each client in order to find an individual approach to it. In this type of sales, the initiator of the interaction between the client and the company is the company itself.
Active sales have a number of pros and cons.
Pros:
- Efficiency through personal interaction with customers.
- Thrift. Most active sales channels avoid the cost of transportation, advertising, etc.
- Clarity of plan and action. A company interacts with a specific customer for a specific purpose.
Minuses:
- Difficulty in managing. When using methods of active sales channels, it is very difficult to control each participant in the interaction process.
- Clarity of plan and action. This item applies to the minuses, too, since each employee, when communicating with a client, should be ready to answer all questions. Improvisation is not allowed, because personal contact requires the reliability of all the information provided.
- Communication costs. Typically, active sales channels use telephone communications to communicate with customers, and costs are not always recouped.
To understand active methods in more detail, consider what sales channels there are (active):
- Telemarketing.
- Partnership cooperation.
- "Dealer".
Telemarketing
A telemarketing sales channel is a way to attract customers through a telephone conversation. Telemarketing especially needs a clear plan and action. Communication managers should be able to quickly interest the client, while not bothering him and trying to be unobtrusive. This type of sales is very effective for companies offering services rather than goods, since a telephone conversation excludes the opportunity to demonstrate the product and its functions. But Internet companies or window replacement services are actively using this channel, since it is the most effective and profitable one for them.
The advantages of telemarketing include:
- The speed of dissemination of information. A company can very quickly attract a sufficient number of customers.
- Thrift. Telemarketing excludes all types of costs, except for telephone communications.
Minuses:
- Lack of product demonstration.
- Negative attitude of some people. Many people are negative about telemarketing, and as soon as they understand who is calling them and why, they interrupt the call.
Partnership cooperation
Partnership cooperation is a sales channel that practices the interaction of several companies for mutual benefit. Typically, partnerships come from organizations that have related or similar products or services. Due to this, one company in addition to its products advertises and distributes the products of the second company, and it does the same. Since the products in most cases are similar or complementary, this type of sales channel does not cause contradictions among customers, and doubles the influx of customers and profit to participants.
Benefits of partnerships:
- Double the speed of distribution of goods and services.
- Saving. Companies do not spend money on advertising, transport, etc., since affiliate assistance is enough for distribution.
Minuses:
- Dividing income and paying interest to a partner. In partnerships, companies do not interact for free; each side pays for the help of the other.
- The need for retraining of staff. Since two companies with different structures are already beginning to appear in marketing, the personnel involved in the sale and customer acquisition have to retrain in order to present information about the two companies with dignity and integrity.
Dealership
The so-called dealer sales channel is the most distant and weakly related to active types method. There is no direct contact between the client and the company, which is expected in active sales channels.
The dealership is that a company that does not have enough money, and because of this and the ability to organize its own sale of goods, shifts this role to another company that has such an opportunity. Due to this, the company gets the opportunity to make a profit without going into minus, and the dealer company receives a good share of everything sold.
This method is referred to active sales channels because the company has to actively attract dealers, that is, in fact, they begin to act as customers who need to be interested and persuaded.
Pros:
- Cost savings. Since the company is not wasted by itself, but the dealer does it for it.
- An opportunity to enter the market without funds.
- Development at the expense of the dealer company.
Minuses:
- Lack of direct contact with customers.
- Paying a large share of the income to the dealer.
- Dependence on another company.
- No guarantee of the duration of cooperation. A dealer company can at any time find the best offer and terminate cooperation.
Passive or Incoming Channels
Passive sales channels are those channels that allow you to attract an audience without interacting with customers directly. In this type of sales, the initiator of the interaction between the company and the client is the client himself, who has read the product information using one of the passive sales methods.
Active types of sales are more effective, and passive types are more simple and popular.
Consider what are the passive-looking sales channels in two examples:
- Advertising.
- Feedback from former customers.
Advertising
The most popular way to sell these days. We see advertisements several dozen times a day. It is everywhere: in our telephones, televisions, buses, outside the car window in traffic, on the radio, on a tree, in the stairwell, on products, etc., etc. Advertising is the most popular marketing move. It allows you to leave the necessary information in the person’s subconscious, without even talking to him. And for this, companies have come up with hundreds of different ways. Someone draws attention with a beautiful picture, someone with a sounding slogan, still others an interesting video, fourth come up with a song about their product, and fifth, for example, put pressure on pity. All these methods work perfectly and delight their companies with profit and influx of customers.
This time, consider the cons first:
- High cost.
- High competition. Since there is no direct contact with the client, you have to come up with more interesting and unusual advertising than competitors.
- The need for regular updates.
Pros:
- Time saving.
- Large spread range.
- The ability to demonstrate the product with all its functions.
Former customer reviews
A sales method that requires minimal effort from the companies themselves. All that is required of them is to create the “Reviews” section on the website and ask the client to leave their feedback there on their goods / services.
This sales channel can be called the most popular among customers. Potential buyers are given the opportunity to familiarize themselves with the product not only from the words of the manufacturer, but also from the words of real people.
But for companies this type of distribution is quite dangerous, therefore, it is mainly used by large companies with many years of reputation or those who are 100% sure of the quality of their goods / services.
Pros:
- Saving. Costs are completely absent, as the clients themselves engage in the attraction.
- The trust. A person with greater willingness and confidence buys the goods, knowing the impressions of real people.
- The interaction of people. Due to the chain reaction, the number of customers increases, the principle of word of mouth works.
Minuses:
- Negative feedback.
- Slow spread.
A small analysis of sales channels
After all the examples, you can make a small analysis of active and passive types of sales.
Both types of methods will bring the desired result to companies, so the choice of method depends only on the direction of the company, its capabilities and desires. The effectiveness of sales channels is on the side of the active types, but at the same time they are very labor intensive and need clarity of action. Passive ones are simpler and more global, but at the same time they do not guarantee such an active effect. Passive and active channels can be used at the same time, for example, to order advertising and ring customers.
As for the management of sales channels, it is much easier with passive channels, since they almost do not require regulation. While most active types require strict control.
But the development of sales channels does not have a clear leader. Both passive and active can be improved and developed in their own way.
Basically, the channels for selling goods are passive. Since in active sales methods there is almost always no possibility of demonstration. And the sales channels of services, respectively, are usually active, but this is not a mandatory rule, and each company can try to reverse this scheme if it finds a worthy method for this.
Which sales channels are better? It is impossible to answer this question unequivocally, because they are all individual, and each of them is ideal for a certain type of marketing.
Bank sales channels
The Bank is an economic institution that provides many services to individuals and companies. The bank is a vivid example of applying several sales techniques at once.
His sales techniques are both active and passive. Let's start with active sales methods.
Since the bank has its own "point of sale", it actively uses a direct channel when contact with a client occurs in a personal conversation. Employees of the institution personally present to customers the information they are interested in.
The bank also practices telemarketing, of course, more often in order to notify existing customers about something, but sometimes in order to attract new ones, if we are talking about a new, recently opened bank.
Financial institutions are actively engaged in partnerships, signing various agreements on joint programs.
Now consider the passive channels used by the bank.
In large banks, a method of promotion with the help of corporate clients is very common when large companies interacting with the bank exchange useful information among themselves, including that related to the bank itself. Thus, on the advice of one company, the bank receives a new client in the person of another.
Such institutions do not refuse the most widespread passive method of sales - advertising. Banks actively place it in print and video formats, attract famous people to participate.
As a result, the bank uses each of the sales methods discussed above, which once again confirms that the sales channels have no structure and cliché. They can be used in any form, in any quantity and for any purpose.
How to effectively manage your sales channels
And finally, we will discuss how to choose the right method of sales and use it effectively. This is easy enough to do. You need to understand three main points to understand what you need to aim for:
- Who is your product / service for? Who will be the main buyer. It is necessary to try to identify all types of potential customers in order to develop an approximate strategy for further actions.
- Where it is easiest to catch your target audience. After finding potential customers, it is worth analyzing their age group and interests in order to understand where it is easiest to find an audience and which sales channel to choose.
- How you will attract customers. Having determined the audience and places, you can proceed to the final stage - the choice of sales channels. It is worth considering all the points at once. A particularly important role here can be played by the age of the audience. If the goods / services are aimed mainly at young people, then it will be most rational to place ads on the Internet. If the target audience is mostly middle-aged, then you can add television and print to online advertising. You can also try telemarketing. And if the audience is elderly, then advertising on the Internet can be completely abandoned and emphasis is on telemarketing, since older people can most often be found at home. And do not forget about the reviews if your product / service can be evaluated in any way. This channel is suitable for any audience (in the case of the elderly, you can replace online reviews with word of mouth method).