What Is Channel Management?

By business.com editorial staff,
business.com writer
| Updated
Apr 28, 2020
Image Credit: Pinkypills / Getty Images

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

  • Channel management involves satisfying customers; it involves managing partners who assist in the distribution process as well as vendors who help a business's internal controls operate smoothly.
  • Communication is a vital element of success.
  • Some examples of channel management are channel architecture, channel strategy and channel design.

Effective channel management involves a partner relationship management (PRM) solution with a holistic viewpoint of the organization.

Channel management involves managing channels associated with reaching and satisfying the customer, managing partners who help with the distribution process and managing vendors who keep your internal controls working smoothly. Channel management successfully gains and maintains the cooperation of various organizations by aligning the enterprise as a whole with customer needs in mind. Each department and flow of information has the potential to impact customer service, affecting your entire organization and your reputation.

Vendor management is a crossover channel often included in partner relationship management. When establishing your channel management solutions, set clear goals for each channel segment. In addition, be sure to define policies and procedures to manage your channels, identify which products you offer that are suitable for a particular channel, and, last, develop sales and marketing programs for each channel to meet their needs, not what you think their needs are.

Communication is vital to success and increased profits.

Identify channel management solutions

Utilize a holistic viewpoint when identifying channel management solutions. Communication internally and externally is the key to successful channel management.

Identify PRM solutions

Partner relationship management is vital to channel management. Make sure PRM solutions match your company's needs.

Identify vendor management software

Vendor management software is part of channel management but is a crossover aspect of partner relationship management. Identify your needs and how vendor management software can help you accomplish your goals, improve efficiency and increase profits. In addition, keeping up to date with technology and making sure your partners are on track with technology will help control the risk management involved with channel management.

Technology continues to change CRM and PRM, often causing process overlap. 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. Do this without forgetting the most important aspect of your company, your customer.

Channel management examples  

Now that you have a better grasp on channel marketing and what it entails, according to Simplicable, the following is an overview of several types of channel management:

  • Channel architecture: Channel architecture involves designing the basic structure of your channel. This includes managing the product from the producer to the consumer.

  • Channel strategy: This type of channel management involves planning your sales and distribution channels. This may include things such as expanding your market and creating plans to improve your e-commerce.

  • Channel design: This involves creating a detailed plan to 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 type of channel management involves managing sales and other partners. This could include things such as performance management and creating incentives to drive sales.

  • Channel conflict: This involves addressing the conflict between channels that may be unfair or counterproductive. For instance, if you are using an e-commerce solution that undercuts your affiliates, this is a channel conflict that needs to be addressed. When designing channels, you must be careful to plan every facet in such a way that does not create such conflicts.

  • Relationship management: This involves establishing and managing relationships with vendors, affiliates, etc. over time.

  • Brand experience: This method of channel management involves developing a brand experience that is consistent across all channels. This includes everything online, such as social media, websites, etc., as well as physical locations such as stores, boutiques, and more. For instance, if you have created a brand voice that makes all 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 of channel management 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 of channel management 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 would want to increase production around that time.

  • Revenue management: This type of channel management involves the optimization of revenue for the available inventory. For instance, this may involve selling products individually regularly, but offering bulk discounts to avoid keeping them up until the expiration date, or to make room for new inventory on a seasonal basis. 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 type of channel management involves delivering on your obligations to both channel partners as well as customers. For example, this could include properly managing logistics, such as product exchanges and returns.
business.com editorial staff
business.com editorial staff
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