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Channel management aligns a company with its customers’ needs.
In business terms, a channel is how you sell — or intend to sell — your goods or services to your target audience. Many companies sell through multiple channels. For example, you may sell on your website, via social selling, and in your brick-and-mortar store. You may even sell larger products through a network of manufacturer reps while selling replacement parts and accessories directly to end users online.
Selling through multiple channels helps your business maximize its reach and sales revenue. However, tracking and optimizing all channels can be a challenge. This is where channel management comes in.
Channel management involves several aspects of the marketing and sales process:
Most companies use customer relationship management (CRM) software to monitor each channel’s performance and provide appropriate support, such as printed sales materials, advertising, content and partner compensation. The best CRM software solutions often include robust channel management capabilities.
When establishing a channel management strategy, you must do the following:
When you’re identifying a channel management solution to complement your business, consider the big picture. Internal and external communication are key to finding a channel management strategy that helps you meet your company’s goals.
“A good strategy needs clear communication,” said Raviraj Hegde, senior vice president of growth and sales at Donorbox. “The [channel] partners should know about updates, incentives and goals. If not, it’s very easy to lose focus or cause confusion.”
Read our review of Oracle NetSuite CRM to learn about its social channel management features, including prospect tracking, social listening, engagement tracking and post-campaign analysis.
Here are some of the many reasons channel management matters.
Channel management is essential for organizing all of your sales paths. “Channel management is important because it serves as the backbone of a successful multichannel sales strategy,” Wells said. “By effectively coordinating different sales channels, businesses can maximize their market reach and revenue potential.”
Channel management ensures brand consistency across all sales paths, including online, social media and physical locations. “Channel management is essential because it helps you keep everything consistent across different customer touchpoints,” said Layla Sawyer, email and editorial coordinator at Yabby. “For branding, this is particularly important, and [it] helps make sure your brand strategy remains cohesive.”
Hegde noted that each channel has its own relevant parties and that channel management gets all of these parties on the same page to improve outcomes for everyone. “Channel management is about helping businesses work better with partners, resellers or distributors,” Hegde said. “It’s all about alignment to ensure that each party in the sales channel is gunning for increased sales and customer satisfaction.”
Consider these key aspects of sales channel management:
Channel conflicts can cause myriad problems for your business, including low sales team morale, high employee turnover and even lawsuits.
Follow these steps as you search for a channel management software solution.
Ask yourself the following questions to identify your channel management needs:
Using a wholesaler has some benefits. Wholesalers act as intermediaries and are well positioned to track industry trends, like product demand, economic factors, new competitors and consumer behavior shifts.
Consider your industry when you’re choosing channel management software. Some industries, like healthcare, require special handling of customer data. For example, HIPAA laws require healthcare organizations to protect patients’ information. Other industries, such as hospitality, have unique considerations. If you are strictly a business-to-business seller, you may want a solution that focuses on direct client communication instead of mass communication methods.
Technology updates, communication and enterprise alignment are vital to success. View your company as a whole, and understand how each part interacts with the others, from the smallest purchase at the local office supply store to complex technology systems. Never lose sight of the most crucial aspect of your company: your customers.
If your customers buy from multiple channels, an omnichannel strategy makes sense. This strategy should include a payment processing system that facilitates omnichannel payments and accommodates how customers prefer to pay.
Based on the previous steps, create a list of must-have features for your channel management solution. You should also list your “like-to-have” features. “Define your growth projections for the next three to five years,” Wells said. “Ensure your must-have list includes specific scalability requirements, like user limits, data storage capabilities and channel expansion capacity.”
Research and evaluate CRM solutions and channel management software with the right features and functionality for your business. Ask for product demonstrations, pricing lists and a breakdown of features.
It’s also important to consider each CRM system’s integrations with your existing software. When you’re selecting channel management software, potential solutions must be “closely connected with tools already existing in your arsenal,” Hegde said.
CRM systems are priced in various ways. Some have higher upfront costs, while others have high monthly per-user costs. Others offer various pricing tiers. Calculate the total cost for each of your top four contenders at your current usage. Consider reasonable growth over the next several years to ensure the solution scales with your business. Eliminate any systems outside your budget.
Some CRM system vendors provide a free trial that allows you to test the software’s features and functionality. By trying out a CRM solution, you can see if it meets your needs and is easy to use. Set a reminder to cancel if the software doesn’t fulfill your requirements.
Once you’ve found a channel management solution, sign up and take advantage of the company’s implementation assistance. Access the company’s training materials to properly train your channel manager, marketing manager and sales manager.
Keys to CRM success for small businesses include properly training your team, making use of the CRM’s support resources and involving your team in all CRM adoption decisions.
Now that you understand channel management, let’s explore frequently asked questions about this complex process and software designed to help companies manage their sales pipelines.
Channel management software is a special type of CRM software designed to help companies streamline their production and distribution process. The software can also assist with sales and marketing programs. Streamlined channels mean partners and clients can be organized into various segments, thereby allowing internal teams to track tasks, processes and results.
As with any software, you should determine your needs and find solutions that meet those requirements. Of course, the price might also be a factor. Here are some potential needs you may have:
Based on our research, consider the following channel management solutions:
Most channel management software vendors offer various subscription plans; monthly prices vary. You may pay anywhere from $14 per user per month to over $300 per user per month. Many channel management software solutions offer free trials. Taking advantage of a free trial is a great way to determine if the software is right for you.
Small companies typically have at least one employee who acts as a channel manager. If you can afford to hire an employee whose sole job is to be your channel manager, you may be pleased with the revenue they generate. However, if you have more than one promotional channel, a software solution can help your business manage the complexity of multiple sales channels while maximizing profits.
Depending on your company’s specific needs, a channel manager may perform the following functions:
If your company is getting engagement from partners, your channel management efforts are working. Hegde noted that continuous engagement of partners is an active, ongoing effort within channel management. “Give them regular incentives, and make sure to recognize their efforts,” Hegde said. “Little rewards or public acknowledgment build loyalty. Channel management is all about relationships and teamwork, not just the tools.”
Consider these key performance indicators as well:
There are simple solutions when one channel’s success starts impeding another channel’s success. “The key here is to set boundaries, like pricing or territory, so that each channel has room to [grow],” Sawyer said.
Effective channel management ensures that you get the most out of every avenue through which you make sales. It’s somewhat easier said than done, but this guide can help you create a stronger brand and more revenue.
Max Freedman and Marisa Sanfilippo contributed to this article.
