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What Is Channel Management?

Marisa Sanfilippo
Marisa Sanfilippo

Channel management aligns a company with the needs of its customers.

Channel management involves the marketing and sales strategies your company uses to reach and satisfy consumers, the techniques you use to support your partners who help with the distribution process, and how you manage vendors.

When establishing your channel management solutions, you must set clear goals for each channel. (A channel is how you intend to sell your goods or services to your target audience). In addition to clear goals for each channel, you want to:

  • Define the policies and procedures to manage your channels
  • Identify which products you offer that are suitable for a particular channel, and
  • Develop sales and marketing programs for each channel to meet the actual needs of your target customer, not what you think their needs are.

Identifying channel management solutions

When trying to identify a channel management solution that will complement your business, look at the big picture. Communication internally and externally is key to finding a solution that will help you meet your company’s goals.

How to choose the best vendor management software for your business

As you search for a vendor management software solution, first identify your needs, then how the software can help you accomplish your goals, improve efficiency, and increase profits.

Next, evaluate the technology that your channel partners will be utilizing as well. Technology updates, communication and enterprise alignment are vital to success. View your company as a whole, and understand how each part interacts with the other, from the smallest purchase at the local office supply store to complex technology systems, and don’t lose sight of the most important aspect of your company, your customer.

Examples of channel management

According to Simplicable, the main types of channel management include:

  • Channel architecture: Channel architecture is the basic framework for your channel. It encompasses how the product is provided by the producer to the consumer.
  • Channel strategy: This aspect involves your sales and distribution blueprint, such as how you plan to expand your market and what specific action plans you will put in place to improve your e-commerce channel.
  • Channel design: How will you implement new channels? For instance, you may create an affiliate program to encourage certain types of people and companies to help sell and promote your product.
  • Sales management: This aspect involves how you will manage sales and other partners. This could include things such as what incentives you will offer to drive sales.
  • Channel conflict: How do you plan to address conflict between channels that are unfair to one party or counterproductive? For instance, if you are using an e-commerce solution that undercuts your affiliates, you must address this conflict. When designing channels, you must pay careful attention so one channel does not create a conflict for another channel.
  • Relationship management: This aspect involves establishing and managing relationships with vendors, affiliates, etc., over time.
  • Brand experience: How do you plan to develop a brand experience that is consistent across all channels, including if you sell online, through social media, etc., as well as physical locations such as stores, boutiques, and more? For instance, if your brand voice emphasizes making customers feel loved and appreciated, this should happen no matter where your customers go. For example, various beauty brands make their customers feel pampered. This is much easier to do in person, as this can allow you to massage, apply makeup, etc. Nevertheless, the online experience must also go above and beyond to give the same personal touch by using the right words, offering exclusive deals, etc.
  • Pricing: This method involves using channel-based pricing strategies. For instance, a luxury bakery that only sells certain products in upscale areas is an example of pricing as channel management.
  • Sales and operations planning: This method involves taking the time to match the goods or services you are producing with the general demand. For instance, if you have a product or service that is more popular during certain times of year (i.e., Christmas), you want to increase production in the spring or summer.
  • Revenue management: How will you optimize revenue for your available inventory? For instance, a retail store may sell swimsuits at full price until near the end of the summer, at which time it would likely discount the inventory to make more room for fall and winter products.
  • Distribution: This aspect is focused on how you will deliver on your obligations to both channel partners and customers. For example, this could include properly managing logistics, such as product exchanges and returns.

Channel management FAQs

Now that you know a thing or two about what channel management is, let’s explore frequently asked questions about this complex process and software solutions that are designed to help companies manage their sales and distribution pipelines.

What is channel management software?

Channel management software solutions are designed to help companies streamline their production and distribution process and to assist with their sales and marketing programs. When various channels are streamlined, partners and clients can be organized into various segments so that internal teams can track tasks, processes, and results.

How do I decide which channel management software I should use?

As with any software, determine first what your needs are, then if, or how well each application can meet your needs. Of course, price may play a factor, too. Your needs may include:

  • Being able to easily monitor sales teams and quotas
  • Mobile access
  • Marketing automation
  • Point of sale integration
  • Lead management
  • Easily engaging with prospects and customers to boost channel pipelines

What are some good channel management software programs?

Based on our research, the following are just a few that might be worth looking into for your company:

How much does channel management software cost?

Most channel management software vendors offer various subscription plans, and the monthly prices vary. For example, the Salesforce Sales Essentials plan costs $25 per user, per month, while more robust plans cost upwards of $300 per user, per month. Workbooks offers a free 30-day trial and once the trial is over, prices start at $30 per user, per month.

Do I need a channel manager?

Small companies typically have at least one employee performing some of the functions of a channel manager. If you can afford to have an employee whose sole job is to be your channel manager, you may be pleased with the revenue they generate, but if you have at least more than one promotional channel as part of your business strategy, you may want to consider a software solution to help your business manage the complexity of multiple sales channels while maximizing profits.

What do channel managers do?

Depending on the specific needs of your company, the role of a channel manager can vary, but typically channel managers:

  • Help increase brand recognition
  • Connect products to people
  • Execute marketing plans
  • Track and implement marketing programs
  • Set sales strategies
  • Strategically price products and services
  • Plan which additional channels to promote your products and services on
  • Provide strategic channel direction, such as which e-commerce platform to use
  • Manage sales partners and vendors
  • Assist with customer service strategies, ensuring customers are happy and issues are resolved in a timely fashion
  • Serve as a liaison between various internal departments and company owners
  • Ensure internal and external operations run smoothly

How do I know if channel management is working?

If your company is getting engagement from partners, your channel management efforts are working. You will also want to consider these KPIs:

  • The value of your active sales funnel
  • The average size of each deal
  • How engaged your prospects are with the content your company is producing
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Marisa Sanfilippo
Marisa Sanfilippo
Contributing Writer
Marisa is an award-winning marketing professional and contributing writer. She has worked with businesses large and small to help them drive revenue through integrated marketing campaigns and enjoys sharing her expertise with our audience.