There is no doubt that we are currently seeing a massive disruption to many existing channels. So, addressing this issue is a major part of pivoting your business currently. Many of the definitions for a channel are similar to this one. A distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel, the manufacturer sells directly to the consumer. However, we have to be careful to understand that B to B has exploded in recent times and it is getting harder to differentiate at the SME level. Most of our clients have elements of both in their marketing and although the implementation can vary the fundamentals underneath the offerings are remarkably similar.

There are many issues to consider but we are going to look at partnerships, data, and culture as key components: –

Partnerships: To demonstrate what a partnership can look like, what are some of the changes people will be looking for in their homes post COVID? As we migrate into a hybrid remote office environment, home automation, security, solar, clean air etc. Who supplies these services? There are specialists but the electrical contractor is best poised to harness this opportunity. Some are already doing this and will prosper, others have not and will have to invest heavily to catch up. For those who have not invested the quickest way to build out the channel maybe is to partner with a specialist. It should also be noted that building partnerships can be a defensive move to preempt any move your competitors may make on your business. Who could you partner with to leverage an opportunity?

Data: Usually companies know their top line sales but often lack clarity around who is specifically buying the product/service. Do you really know who buys your products? Do you know who refers clients to you? Do you know how much and what you sell in each market/territory? Have you reviewed your web analytics reports and do you understand the significance of the data?

Once you have this data you might find that you have been selling some product via the web in, say Oklahoma. The data analytics might affirm that finding a local distributor/partner in that state could greatly expand that market. You might find that certain individuals in a professional services company have been referring considerable business to you and now you need to develop that company as a formal distribution channel. Lastly you might find that the data reveals your web site is not reflective of your target audience and needs to be updated to reflect the data findings.

An example that highlights some of these points is a consumer products company that was stuck around $30M in sales.The company was primarily dealing with specialty stores and consumer electronic stores.The company had been approached by several big box stores in the mass channel. When the marketing team looked at the data regarding what products were actually being sold in the mass channel, they realized that they could easily sell their lower cost products to the mass channel without impacting their other customers. Over the next year sales increased over $12M due to the expansion into the mass channel.

A starting point to gather the data is to look at your Google analytics report which has a freemium service and to invest in a CRM. I often find that businesses have seen a analytics report but they have never read it and that is a mistake. Likewise. when you say CRM people immediately think of Salesforce which for many is too complex and expensive for their needs but there are a plethora of easier to use and less expensive options.

Culture: Culture is the glue that drives an organization, and everyone needs to be aligned around the vision, mission, values, and behaviors, which at times can be challenging. Even if you have a great internal culture how is that being “branded” externally. We have found that prominently displaying and talking about your culture externally both on-line and off-line will drive business. How does this relate to channels? Well increasingly your on-line presence is your number 1 channel and only recently a client told us that they had started to see an increase in on-line enquiries and when they asked why the companies had reached out to them the answer was “We want to work with companies that reflect our ethics and values” Please note this will become increasingly important as the Millennials become the driving force of the economy because they relate to culture and values more than any other generation.

It is widely predicted that post COVID there will be more emphasis on remote workforces and working from home. This will certainly create some challenges around maintaining a robust, positive culture so this is another reason to fine tune your culture now.

Is your channel strategy robust enough to scale your business right now?

 

At Shirlaws, we scale businesses by drawing on the experience of owning and running businesses and the Shirlaws IP to develop a vision and appropriate strategies and a coaching modality to transfer skills into the business. Right now, our focus is on helping business owners to pivot to survive now and then thrive as markets return. www.shirlawsgroup.com. Nigel Hartley is a Business Advisor with Shirlaws and can be reached on 707 573 7154 or email at nigel.hartley@shirlawsgroup.com.