Introduction 

In today’s complex and high-competitive business environment, with sales coming through direct mail, inbound and outbound phone, websites, retailers, partners, and even apps, companies more than ever need a formal sales channel program strategy and plan to successfully manage enterprise-wide sales activities and drive the realization of revenue and profitability goals.

Failure of businesses to change or modify their sales strategies to align with current buyer habits has the potential to undermine the core goal of reaching target prospects at the moments that most influence their purchase decisions.

The channel sales programs support the process of selling a product or services to targeted markets by segmenting sales operations, focusing on different selling vessels. A sales channel can be direct if it involves a company selling products and services directly to customers, or indirect with formally partnering with intermediary third-party organizations that sell the company’s product or service directly to the marketplace.

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A direct sales channel strategy provides a company with total control over relationships with its customers. However, there is the potential for reduced growth opportunities impacted by the size of the company sales force. The use of a network of channel partners is a business strategy that provides significant leverage for a business to increase revenue by increasing market reach and coverage for positioning its products and services in front of a larger audience of prospective buyers in targeted markets.

Sales Channel Types

The types of sales channels typically used to sell products and services in the current environment are outlined below by Direct and Indirect.

Direct Sales Channels

Direct sales activities involve company employees selling directly to customers and provide: full control of sales activities; no channel discounts and; a direct line of customer and prospect feedback.

  • E-mail Campaigns
  • Sales Team
  • Web & Social Media
  • Industry Events and Conferences

Indirect Sales Channels

Indirect sales activities involve partnering with resellers, distributors, value-added providers and other types of channel partners that provide: lower marketing (promotion) and sales cost; effective scaling and; lower cost for expanding into additional markets. The examples of indirect sales channels include:

  • Independent Sales Agents.
  • Original Equipment Manufacturer (OEM).
  • Reseller Partners.
  • Retail.
  • Sales Outsourcing.
  • Value Added Resellers (VAR).
  • White Label.

Channel Economics

Channel economics refers to the financial costs and benefits inherent to particular sale channels. It answers the question: All customers being equal, how much does it cost a company to sell products and services via one channel versus another? By analyzing the economics of each channel, it becomes evident which channels yield the best source of revenue and profitability.

“Exceed your customer’s expectations. If you do, they’ll come back over and over. Give them what they want – and a little more.”
Sam Walton

Channel Sales and PRM

Today, a channel sales system needs to be able to provide a wide range of services and better consistency in managing and controlling the customer experience. Currently, Partner Relationship Management (PRM) is the solution of choice for supporting successful channel sales strategies.

Partner relationship management (PRM) is an integrated approach of methodologies, strategies, software, and web-based capabilities that help a business manage sales channel partner relationships. The general purpose of PRM is to enable better partner management through the introduction of effective and efficient systems, processes, and procedures for interacting with them. Web-based PRM systems typically include a Content Management System (CRM), a partner and customer contact database, and enable customization and streamlining administrative tasks by making real-time information available to all the partners over the Internet.

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