To understand the concept of channel marketing, it is best to have a quick look at some marketing basics. We’ll call them “the four P’s of marketing”. Your marketing mix model is based on these four elements that work together to combine, capture, and promote your brand’s key selling points.
Marketing 101: The Four P’s
When combined, the four P’s of the marketing mix model work together to ensure your brand has a chance at success in the market. In fact, when businesses fail (and 50% of companies tend to fail within their first two years), it is often because the firm was unable to understand and execute on each of them.
Read More >> 6 Ways to Avoid Business Failure and Be Successful
Product – This is what you are selling. It can be a physical good, an experience, or even a service. It is assumed in the marketing mix model that the product being sold is of high quality, and is a product that consumers would want. Most importantly, without a product, there is nothing to market, and thus no need for marketing. Find out how to choose the best product to sell through entrepreneur.com.
Price – This is about more than just the amount that the customer pays as there is a lot that goes into the pricing strategy for any product or service. The costs of production, the ability of the market to pay for the product, etc., are all essential aspects. Also, pricing can be used as a differentiator, often being leveraged as a vital element of the marketing strategy.
Promotion – This is about the activities that occur to make the product or service known to prospective buyers and the market. Activities can include advertising or press releases to announce a product release, word of mouth, incentives, commissions, and more. It can also consist of sales, direct marketing, contests, and prizes.
Place – This is about the point of sale and is often referred to as the distribution strategy. In any industry, catching the eye of the prospective consumer and making it easy to buy the product is the main aim of a reliable place strategy. Retailers pay a premium for the right location, and many will be familiar with the mantra of location, location, location.
Read More>> How to Build a Location Independent Business
So What is Channel Marketing?
Channel marketing focuses on the place within the marketing mix model. It is about the distribution of products from the manufacturer to the consumer. Most manufacturers don’t sell directly to the consumer. Instead, they use a marketing channel of some kind to distribute the product, such as a retail location, a vending machine, a website, or a trade show.
Marketing channels, which can include distributors, wholesalers, and retailers, provide businesses with three functions:
- Buying products for resale to customers
- Distributing products to customers
- Supporting sales to customers through financing and other services
The channel functions augment your own direct sales activities and open up your market to a broader group of customers. The functions of marketing channels include:
- Transactional functions involve buying, selling, and risk assumption
- Logistical functions include assembly, storage, sorting, and transportation
- Facilitating functions include post-purchase service and maintenance, financing, information dissemination, and channel coordination
These functions are necessary for the flow of your product to the customer and payment back to the manufacturer.
How do you Create a Channel Marketing Strategy?
Nowadays, it is more common to hear or read a reference to a cross-channel marketing strategy, which focuses on ensuring that your product is promoted, at the right time, to the right customer, across whichever channels that they might frequent. So, instead of focusing on just one channel, it is more common to focus on all channels, so that you can be where the customer is, whenever they are there.
To create an effective cross-channel marketing strategy, you need to do the following:
- Establish goals – Your goals may include increasing engagement rates, increasing customer retention, reducing costs, increasing positive feedback, and increasing the number of product reviews you have on your website.
- Know your customer – If you don’t know who your customer is, and how they like to be communicated with, you will never be able to market to them effectively. It is essential to your marketing strategy to understand their demographics (age, gender, living situation, geography, presence of children, etc.) as well as their psychographics (tastes, behaviors, past purchasing history, etc.). The more you know about your prospective customer, the more targeted your cross-channel marketing strategy can be.
- Understand your channels – Take the time to analyze your various channels and how customers are interacting with them. You may find that a certain type of person within your target market interacts with specific channels more than others, and this is essential information to know and act upon.
- Implement cross-channel marketing campaigns – Once you have taken the time to establish your goals and understand your customers and channels, you can develop and launch campaigns across those channels. This does not mean that you should do exactly the same thing on each channel. While your campaign needs to be integrated and should align to your brand, you will then want to develop different marketing content that can speak to customers wherever they are in the purchase cycle (otherwise known as the consumer decision journey. The goal is to leverage your various channels so that you can push customers closer to the buying phase of the journey.
- Keep track of progress on your marketing campaign dashboard – If you leverage a content management system or a cross-channel marketing platform, you can leverage these marketing automation tools to track campaign performance. If these tools are not part of your marketing technology stack (more on this topic below), you may need to develop a manual process that collects information at each customer touchpoint. At the very least, make sure your dashboard tracks the following:
- Traffic sources – Where are your customers coming from?
- Social media – Traffic day over day, week over week, and month over month by platform.
- CTR (click-through rates) – What are people doing after reviewing your content? Are they going to your website to learn more?
- Bounce rates– The percentage of visitors to a website who leave the site after viewing only one page. If your bounce rate is high, it could mean that your content is out of date or missing the mark, or that you have a technology problem.
- Progress to established goals – Make sure your dashboard tells the story of how you are performing in relation to the goals you established as part of your cross-channel marketing strategy.
- Analyze and do it all over again – Once all of your data has been collected, and key information has been put into the dashboard, those results need to be analyzed. Then, you need to take what you learned and apply those learnings to your strategies. Be careful not to make too many changes all at once, or this can create a confusing experience for your customer and can be equally frustrating for your marketing, sales, and leadership teams. Instead, this is about fact-finding and fine-tuning until you find the right levels of performance for your organization.
What Role does Marketing Technology Play in the Channel Marketing Process?
The marketing technology landscape continues to evolve, and at a rapid pace. There are literally hundreds of software technologies that marketers can leverage to simplify the behind-the-scenes efforts that are necessary to get a campaign out the door. In fact, most CMOs have shared concerns about their ability to take on these digital technology trends.
As there are so many choices, marketers need to have a clear understanding of which technologies will create the best return on investment for their business goals, and they need to understand how technology can help them to market better. In most cases, marketers look to have a marketing technology stack in place for these purposes.
A fully integrated marketing stack generally consists of the following components:
- Video/web conferencing solution – Many marketers use collaborative video and web conferencing tools as a way to engage with other marketers, especially in virtual work environments. As a significant portion of communication is nonverbal, and marketing is all about effective communication strategies, video conferencing tools can help marketers connect with one another to make decisions swiftly and work together with more people on certain projects or campaigns.
- Customer relationship management software – Commonly referred to as CRM, this software is an increasingly important component for integrated sales and marketing strategies. A CRM system in today’s world replaces the old-school Rolodex and manages all customer data in a digital format. With a CRM, it is possible for the organization to have visibility of customers, what they are purchasing, and who they are interacting with inside of your organization.
- Email service provider – Email is a key channel in your cross-channel marketing strategy. To effectively email to your customers, you can’t just have a salesperson or marketer creating emails from their desks and sending them out in bulk. An email service provider gives marketers a platform that can integrate with the CRM system and can deploy all of your email marketing campaigns seamlessly. The information provided by your email service provider (often referred to as an ESP), is great to include in your dashboard. Marketers can track who opens the email, who clicks on its links, which links they click on, if a customer bounced and why, and who has unsubscribed.
- Marketing automation platform – Many marketers have to manually handle repetitive tasks such as email management, social media, and website actions. Marketing automation, as it says, automates these otherwise manual processes. And, as with an ESP, your marketing automation platform can either natively, or with some customization, integrate with your CRM.
- Content management system – The CMS, as it is often referred to, allows marketers to create, store, manage the workflow of, and publish digital content. Perhaps a more natural way to explain this is that a content management system helps marketers to build a website without needing to write all the code from scratch. So, instead of creating your own structure for creating web pages, storing images, and other functions, your CMS can handle all that basic infrastructure for you so that you can focus on more forward-facing parts of your website (like content).
- Collaboration and communication system – These systems are used to help keep employees up to speed on company news, and to store various assets that your salespeople and other employees may need access to. In some cases, your CMS and collaboration tools can be integrated. Think of this last tool as a way to store content that needs to be printed for events and trade shows, or documents that a salesperson might want to download and send to a prospective client. This tool is also a great place to save downloadable versions of your company logo, approved images for presentation decks, etc.
When your cross-channel marketing strategy is executed effectively, you can better tap into the various interests and preferences of your customers. As channels continue to evolve and more and more channels come into play, marketers will need to strategize on how to maximize those new distribution options. The sooner marketers start incorporating a cross-channel marketing strategy, the greater benefits their business will experience.