Channel Marketing Definition
Channel marketing is the practice of partnering with third parties to bring your company’s solutions to market. At its core, channel marketing means distributing a product/service across multiple groups or companies, collectively known as the “channel”.
In practice, this often looks like a manufacturer working with third-party sellers to offer their products or services. But channel partners can come in different shapes and sizes, including distributors, affiliates, consultants, resellers, and more. Channel marketing also describes this process regardless of whether the end-user is a consumer or another business.
Why use a channel marketing strategy?
Companies use a channel marketing strategy for their solutions for a number of reasons. Utilizing channel marketing the right way can be an effective way to grow quickly and efficiently. Some of the benefits include:
Flexibility: Channel marketing campaigns can scale as necessary based on the current needs or promotions of the manufacturer.
Affordability: Using channel partners can be much more cost-effective than hiring or maintaining a dedicated direct internal sales team.
Wider reach: Channel partners often have their own marketing resources and tactics outside of the manufacturer’s. A channel marketing strategy can offer a greater variety of audience and methodology the manufacturer wouldn’t have on their own.
Brand-recognition: Speaking of audience, channel partners also have their own relationships with other companies or consumers. Adopting a channel marketing strategy essentially endorses the manufacturer’s solution to multiple audiences, or at the very least spreads the brand or message in a broader way.
Shortcomings of channel marketing
Channel marketing comes with its own set of drawbacks, however. Relying on outside groups for marketing and/or sales can potentially lead to:
Less control: While having a wider reach is important, manufacturers still need to rely on their channel partners to deliver effective (and accurate) information about their solutions. Brand and messaging consistency can be an issue when distributing a campaign across channel partners.
Lack of analytics: Each partner has their own way of recording analytics, making it difficult (or sometimes impossible) to gain meaningful insights from a campaign. Even if channel marketers do receive analytics from their partners, chances are high the data won’t align 100% with the way the manufacturer measures performance.
Varying levels of experience: Channel partners have a wide range of skills and expertise. Within each partner organization, individuals will also have varying levels of experience. Combined with the above lack of analytics, it can be difficult to pinpoint why and where a campaign is under-performing if the partner doesn’t have the experience to offer meaningful feedback.
Increasing the effectiveness of channel marketing
There are ways manufacturers can increase the effectiveness (and ROI!) of their channel marketing strategy. Channel marketers and their partners are allotted marketing development funds (MDF) commonly spent on tradeshow events, digital advertising, or lead lists to drive success. But these uses of MDF can still be foiled by the drawbacks listed above. Ultimately, the partners need to show a clear ROI, but without the proper messaging, analytics, or skills that doesn’t always happen.
MDF can be used on sales training or enablement programs to help overcome those drawbacks. Channel sales experts, like our very own BlitzMasters, empower, train, and facilitate partner sales reps through call blitzes that gain immediate appointments. Our analytics tracking tool allows both the channel marketer and the channel partner to see performance in real-time, along with detailed reports to show how MDF is converted into leads and pipeline. BlitzMasters workshops are also a great way to improve channel partner relationships. Click here for more information about how BlitzMasters accelerates and enables channel marketing.