Channel marketing…who knows what that is?
We do. And soon, so will you.
Channel marketing ≠ marketing channels
A marketing channel is a portal that you use to promote your business, like:
- Social media
- Automated email marketing
- Organic SEO
And yes, you do use marketing channels within your channel marketing efforts. But channel marketing is an entire area of marketing on its own.
In this post you get to learn:
- What is channel marketing (and who does it help)?
- How to choose your channel marketing partners: the 2 questions you need to ask – and answer
- The single, most important thing to your channel marketing partners
What is channel marketing?
Channel marketing is the process of distributing a product or service from start to finish. This process is composed of people, activities, and multiple organizations that send goods from manufacturers to customers.
Think about the breakfast cereal you pour in the morning. How did it get to your bowl?
- It starts in a wheat field and then goes…
- To a grain dispensary, then…
- To the cereal factory
- And then a grocery distributor
- And finally, the cereal is in a bowl on someone’s dining table
The product went through a variety of partners to get it to market and into your bowl. Crucially, it gets into the bowl through a distributor (the grocery store) instead of through the manufacturer.
Channel marketing partners help you sell the advantages of a product to customers. The channel partners you work with in channel marketing can be groups like
- Other types of third-party companies
The key to channel marketing is that it’s a mutually beneficial relationship between you and your channel marketing partners.
Channel marketing is different from just promoting your product through advertising and marketing channels. Often, channel partners are businesses in and of themselves – so when you have multiple channel partners, what you really have is multiple separate businesses selling the same product.
The key benefit of channel marketing is that your products can reach audiences that you would otherwise not have had access to.
Your partners benefit too – typically, you’ll give them a percentage of product sales or a discount on bulk purchases (that they then resell).
Channel marketing is a way for you and your partners to help each other reach the same goal – to sell and help people. If you don’t have the resources to do sales and marketing outreach all by yourself, channel marketing with the right partners can help.
What are the common types of channel marketing partners?
For channel marketing to work at all, you need partners, like resellers, affiliates, and consultants.
Resellers create their own pricing and manage their own accounts. They get the benefit of using your product – and they also get the benefits that come from selling your product to their own network.
A reseller can:
- Whitelabel your service (i.e. remove your branding) to sell as their own, which helps promote their own business.
- Control how much they sell for. The more they sell, the more their own use of your service is discounted for them – which means more money in their pocket.
- Have their own direct point of contact at your business to make sure they know how to use and sell your product, someone like an account manager.
You might have encountered resellers without realizing it:
- Amazon is one type of reseller. Amazon resellers buy products in bulk and sell them on Amazon themselves.
- Software companies often let other businesses whitelabel their products, especially when those businesses customize the software before reselling to their clients.
- Many mattress manufacturers offer whitelabeling. When you walk into a mattress store, you’re likely to see brands that are “unique” to the store – because they’ve actually been whitelabeled and renamed.
(Source: Jungle Scout)
Affiliates are partners who give you referrals via links to your site. You give them a custom web link so affiliate can share via their own websites, ads, and content. An affiliate earns a commission based on how much the link gets clicked.
This blog includes an affiliate link to Amazon Echo. The clicks on this link give the writer, James, a commission. (Source: Neil Patel)
Affiliates are often content creators and subject matter experts. They can put your link into blog content or web pages that make sense. This kind of channel marketing partner gets the benefit of more visitors and a commission, and you get more traffic and sales for your business.
Consultants typically work directly with your business’s customers to help them use your service in the most impactful way. Like an affiliate, a consultant also can earn a commission for their promotion of your business. They also can contribute to your business promotion by:
- Being an expert resource that you can refer your customers to
- Creating guest content – you get good content, consultants get good recognition
- Putting on events to help educate your customers
Here’s an example of how a consultant can guest-write helpful content on your site.
This is one of the 3 automations a consultant recommends to see ROI in 24 hours. Read the full post here.
There are 4 types of channel marketing relationships – all of which can include resellers, affiliates, consultants, distributors, and other partner types. They are:
- Manufacturer to Customer: The manufacturer creates the goods and sells directly to the consumer. It’s cost-effective and profitable for both sides. reach consumers directly from the manufacturer. This is like a baker directly selling pastries to consumers.
- Manufacturer to Retailer to Customer: The manufacturer creates goods and sells them to a retail business, who then sells to a customer – like clothing at a retail store.
- Manufacturer to Wholesaler to Customer: A manufacturer creates good and sells them to a wholesale seller who sells them at a reduced cost to customers – Like good old Costco.
- Manufacturer to Distributor to Reseller to Customer: A manufacturer creates goods that a distributor takes to like-minded businesses. Resellers then buy from these businesses and sell to customers alongside their own products. This is like a laptop company partnering with a distributor to spread the reach of their product, then resellers buying those laptops and selling to customers with a printer or wifi package.
How do you develop a channel marketing partnership?
- Identify potential channel partners. This involves a careful analysis of the product they sell, and the markets they sell in. The analysis must be thorough, technical, and compare hard market data to find the right partner (See also Analytical Marketing).
- Make the pitch. What would you want to hear from a potential partner? Convince a potential partner that a channel partnership would benefit both of you. Make sure that you don’t get stuck on just what the benefits are – talk about why they are benefits.
- Sign on the dotted line. Write an agreement with all the details clearly spelled out. The only way for a channel partnership to work is for all of the most pertinent details to be agreed upon in a contract before the partnership begins.
- Start your channel marketing partnership! Start your plan to promote your service with your new channel marketing partner.
And speaking of step 1…
How to choose your channel marketing partners
I scratch your back, you scratch mine.
This is the idea behind using channel marketing as part of your overall sales and marketing strategy. You need to have channel marketing partners you can trust to promote your business – while also making sure that they get what they need from you to make it worth the effort.
So, how do you know who should be your partner?
When choosing your channel marketing partners (AKA resellers, affiliates, consultants, distributors) to promote your service, you should be able to answer two questions:
- What’s in it for them?
- What’s in it for you?
Why should they care about being your channel partner over someone else’s? A partner wants to work with a business that gives them the most opportunities for growth. What’s in it for them? It could be…
- A discount on your service
More traffic to their website
Featured content from them on your website
You might think it’s easy to answer, “what’s it in it for you” with a simple, “duh, sales!” But it’s more than that.
The right channel marketing partners bring you sales, yes. But they also bring you:
- Good word-of-mouth
- Brand trust
- Help with business growth
- Reach, to audiences that would have been hard to reach
- Marketing and sales strategy ideas
Choosing the right partner is critical to developing a successful channel marketing strategy. An appropriate channel partner will increase your brand awareness and generate new revenue streams.
There are 5 factors that help determine who is going to be a top-tier channel marketing partners.
The 5 factors are:
- Employee count
- Annual revenue
- Product offerings
- Niche target market
- Top of the funnel strategy and marketing spend
Here’s what else you need to look for in a potential channel marketing partner:
- Ability to strategize: Can they see both the big picture and smaller details of your channel marketing relationship?
- Similar goals: A partner’s goals should work with your own, and you should know what they are before you commit to a partnership.
- Able to adapt to change: Are you going to be able to agree on necessary changes when a plan needs to change?
- Proof of growth: What kind of growth has this potential partner accomplished at their business? Can they speak to specific sales and marketing goals that they could also help you meet?
- Proof of motivation: You want a partner that is going to be an active contributor to your channel marketing plan, not someone who waits to be told what to do.
What is your channel marketing strategy?
Keep it simple.
That’s it. No dancing around, no trick questions. The bottom line of it all is, partners don’t want to do a lot of hard work to have a relationship with your business.
An obstacle course of hoops to jump through is not what your channel marketing partners need. For you both to get the channel marketing benefits you each want, here’s what they need from you:
Between you and your channel marketing partners, you are the primary subject matter expert. Whether they are a reseller, affiliate, distributor, or consultant, the only way they will know how to best promote your service and use it themselves is if you tell them how.
You need to:
- Take the time to clearly explain why your service is worth it – so they can turn around and do the same with their community
- Follow it with a CTA. Your partners can then take this and customize it to use with their customers and prospects.
Being actively involved and keeping the process simple drives new business to your partners and keeps them loyal to you.
When you do, keep it simple. Don’t throw a pile of impersonal resources at them and expect them to know what to do. Most partners will want you to tell them what they need to focus on, and many partners don’t have the ability to do multiple marketing activities at a time.
You need to consider what makes the most sense for you, and for them to focus on so you can reap the benefits of a channel marketing partnership. It’s challenging to find the right balance, but channel marketing offers tremendous growth opportunities.