What is Channel Marketing? Strategies to Perfect Your B2B Marketing
Imagine holidaying in your favorite destination while your business still makes a ton of sales, creating that sweet passive income. Actually, you don’t need to imagine anything — this is all possible by means of channel marketing.
Channel marketing is the use of third parties, such as partners, resellers, and affiliates, to sell your products. This strategy allows you to expand your market presence, reach a broader audience, and enhance overall sales performance. It is not restricted to physical products alone; SaaS businesses and other online platforms also benefit from this promotion model.
Let’s break down the types of channel marketing, and explore the role of intermediaries and indirect channels, and the purpose of channel marketing.
What is Channel Marketing?
In channel marketing, you hand the sales part of your business to third parties, intermediaries, and partners. For example, if you run an email marketing software company, you can partner with other marketing services companies to offer your product as an integrated or the most compatible solution.
Leveraging channel partners streamlines your sales process and ensures products reach more customers efficiently. Plus, you can use the expertise of your channel partners and enter new markets without spending a dime. And your channel partners benefit from this too; you would typically give them a percentage of your product sales or discounts on purchases.
If you don’t yet have the resources for customer outreach, you can use channel marketing to spread brand awareness and increase sales. You’ll be adding value to the channel partner by expanding the scope of value their solution provides when their customers use both their and your products or services.
When using this model, you must consider the requirements and goals of your brand, the channel partner, and the audience. But who are channel partners, and why should you care about them?
Who are Channel Marketing Partners?
A channel marketing partner is a company or an individual who works with you to market and sell your products or services. Channel partners can be dealers, affiliate marketers, distributers, value-added providers, system integrators, or even individual freelancers or influencers.
In short, the channel partners are all intermediaries standing between your company and the end user. Let’s look at an example:
Campaign Refinery hosts integrations with 800+ apps and marketplaces to make your email marketing smoother. One of the marketing tools is — OptimizePress, a landing page builder that offers a native integration with Campaign Refinery to handle email marketing.
See how this works? Both brands’ objectives are to make the users’ lives easier with helpful tools and processes. By doing this, both businesses can reach a wider audience, expand their brand presence, and help a lot more people.
Now that we have answered the basic question of what channel marketing is, you might wonder where channel marketing merges with email marketing, so let’s get into that.
Email Marketing’s Place in Channel Marketing
As a channel with the highest ROI, email marketing plays a significant role in channel marketing, particularly in the context of multi-channel and omni-channel promotion. Emails facilitate effective communication, engagement, and coordination within the channel marketing realm.
Let’s see how:
- Communication with channel partners: Email marketing can be used to consistently stay in touch with your channel partners and alert them of incentives and discounts when applicable.
- Product launches and updates: Emails are quicker and more accessible to reach a wider audience simultaneously. Plus, you don’t have to wait around to see the results of conversions; you can track them right from your email marketing platform’s dashboard.
- Training and educational materials: An email list provides the ability to send hyper-targeted content to your audiences. You can also use educational campaigns to motivate readers to participate in webinars or other online events, making it more user-friendly.
- Promotional campaigns: With email marketing, you don’t have to wait for your channel partners to promote your products. You can create engaging email campaign templates and send interesting promotional content to your audiences.
- Easy measuring of results: Email marketing is much easier to track and measure results such as open rates, click-through rates, and conversion rates. Once you have this data, you can refine your marketing strategies according to your customer behavior and interests.
- Co-marketing initiatives: A few companies use email marketing campaigns to collaborate with other organizations and send out co-branded messages and joint promotions.
- Relationship building: Emails nurture and strengthen relationships with channel partners as well as the end customers.
Email marketing still generates $42 for every $1 spent, making it the most profitable and transparent sales model. Whether you choose to work with a channel partner or not, email marketing can prove beneficial when used properly. If you’re venturing out, Campaign Refinery has all the resources you need to shine with your email marketing – scroll to the bottom of the article to learn more.
But for now, it’s time to learn the nitty-gritty differences between channel marketing and marketing channels.
Channel Marketing vs Marketing Channels: What’s the Difference?
While closely related, marketing channels and channel marketing are two distinct matters — one is a strategy and another one a group of means to promote products. Let’s look at the differences between these phrases in detail:
| Aspect | Channel Marketing | Marketing Channels |
|---|---|---|
| Definition | A strategy to sell products or services through third parties. | The various mediums used to advertise and move the products from the producer to the end consumer. |
| Focus | Primarily focuses on the collaborative aspects with intermediaries. | Targets the communication pathway through different mediums or channels. |
| Objective | To expand market reach and optimize the sales process | To ensure that products and services reach the end consumer as effectively as possible. |
| Key elements | Partner selection and management, distribution management, incentives, and discounts. | Sales and retail channels, distribution networks, direct and indirect channels. |
| Flexibility | Strategies can be adapted and changed according to different channel partners | Needs a strategic approach to choosing a marketing channel based on brand goals and customer journey. |
Channel marketing and marketing channels are both important for business growth, and choosing which one to focus on more depends on your business goals and your channel partners’ needs. You can also choose between direct and indirect channel marketing strategies.
Direct Channel Marketing
Contrary to the channel marketing principles, direct marketing involves selling to customers without the help of intermediaries. Direct selling refers to online sales through your websites or company-owned stores. Direct online selling is one of the most widely used methods to reach customers and keep additional profits without having to share commissions with middlemen.
Here are a few examples of direct channel marketing:
- Company-owned retail chains: When a company owns retail chains to sell their manufactured products exclusively. This method works well for physical products such as coffee shops, gadgets, etc.
- E-commerce platforms: This method utilizes online platforms to sell products. For example, Amazon sells products from over a million brands and businesses.
- Telemarketing: Selling products or services through phone calls. Software companies usually use telemarketing to sell upgrades or licenses to interested customers.
- Company-owned mobile apps: Companies create apps to encourage customers to browse, shop, and make direct purchases. A few landing page software companies allow customers to access their templates through a mobile app, making it more user-friendly.
- Online subscription services: Subscription services like Netflix and Spotify use this method to get more people to pay and use their products.
Direct channel marketing helps companies have full control over their products, pricing, and brand representation. We explain other channel marketing types below.
Now, let’s explore the benefits of channel marketing for your business.
Benefits of Channel Marketing For Your Business
Channel marketing has many benefits and gives you the flexibility to choose a pathway depending on your changing business needs:
- Extended market reach: Channel marketing allows businesses to tap into new market segments through the established networks of channel partners.
- Efficient distribution: Using channel partners contributes to a more efficient process of distributing products and services to customers.
- Cost-effective market entry: Channel marketing can be much cheaper than handling every sales aspect on your own.
- Expertise and local knowledge of channel partners: Your channel partners may possess insider knowledge of local market trends and industry insights.
- Faster product adoption: Channel partners may already have an established group of loyal followers, making it easier to introduce and sell your products.
- Ability to focus on your core competencies: When you outsource a part of your sales to a third party, you will have more time to focus on providing value with every product you release.
- Scalability: Using intermediaries means you don’t need as many internal resources to scale your sales and marketing. Your channel partners scale your distribution as per the product demand.
But like any medium, channel marketing comes with its downsides. Below, we have outlined the prominent factors that could affect your business.
Channel Marketing Challenges
When collaborating with many channel partners, you risk losing control over your sales. That means the intermediaries dominate a significant portion of your sales.
Apart from this, you can face common challenges like the ones below:
- Conflict with channel partners: This is a common scenario where different channel partners compete for the same audience’s attention. This situation could lead to strained customer relationships and a negative impact on your brand image.
- Communication challenges with different partners: When working with numerous channel partners, it can become challenging to communicate consistently with all of them.
- Being too dependent on channel partners: Becoming too reliant on a third-party service can affect your business performance in the long run. Plus, your brand image could be hit if your channel partner faces financial loss or other issues.
- Reduced business profits: Most channel partners take a percentage of your sales, reducing the product margin for your business. This can affect your ability to compete on price and overall profitability.
- Inconsistencies in branding: Your channel partners’ approach to branding can be different from yours, leading to inconsistent branding. Eventually, this will lead to brand dilution and loss of customer trust.
- Lack of access to analytics: Many partners do not provide reporting or any form of analytics to track your product performance.
- Use of less advanced marketing strategies: Your channel partners may have varied skill sets and approaches to marketing. This means your email campaigns can be completely different from theirs, leaving your audiences confused.
Despite these challenges, many companies succeed with channel marketing and form lasting relationships with intermediaries. What do they do differently? — they use a tailored approach to each channel marketing type. You can follow a similar pattern once you settle on a channel marketing type.
Let’s look at 7 common types of channel marketing.
1. Indirect Channel Marketing
Indirect channel marketing is a sales model in which your products reach customers through middlemen. Resellers are the biggest example of indirect channel marketing — they sell your products on your behalf.
Other types of sellers include:
- Distribution channels: Products move through a series of distributors before reaching the retailers or the end customers. For example, you can use inbound and outbound methods such as third-party app stores, e-commerce services, and phone-based salesforce.
- Affiliate marketing: Affiliates promote your products on their websites or third-party sites and take a small commission for each sale they make. Saas businesses can pay individuals or affiliate marketing companies to promote their products for them.
- Value-added resellers: In this method, the resellers enhance your products before selling them to customers. For example, an IT company may partner with VARs to customize and implement software solutions as per customer requirements.
- Channel partnerships: This method involves partnering with companies in the same industry to sell complementary products. Think of a scenario when an email software company partners with landing pages or email template services to promote each other’s products.
- Agent channels: Companies appoint agents to promote and sell products on their behalf. Agents usually only do the ‘selling’ part, so your brand image stays intact.
- Consultant networks: This channel entails partnering with consultants to promote and sell your products. Imagine an email marketer selling your email software solutions through email newsletters or blog articles (affiliate marketing).
Indirect channel marketing doesn’t require your presence in every location, making it a seamless way to sell your products and services.
2. Multi-channel Marketing
Multi-channel marketing is selling your products through different channels simultaneously to maximize sales.
Common ways to use multi-channel marketing are:
- Social media advertising and website sales: A SaaS company can promote products on social media and concurrently sell them on their company website. This method directs social media users to the website to make a purchase.
- E-commerce and marketplace selling: An E-commerce company can sell products through its online store as well as third-party sites. For example, a gadget company can sell products on Amazon and eBay and through their company website.
- Email marketing and SMS campaigns: This method allows companies to run targeted email campaigns and bundle the same messages into SMS campaigns for a wider reach. An online clothing store can send customized offers via email campaigns and send SMS with promotions and flash sale information.
- Television ads and search engine marketing: A company can air television commercials while also promoting its products through SEO strategies or Google ads.
- Affiliate marketing and influencer collaborations: You can partner with affiliates as well as influencers to showcase and promote your products.
- Customer loyalty programs: Reward your customers with a unified loyalty program for purchasing through multi-channel platforms.
Using these channels together can create a holistic approach to marketing and sales.
3. B2B Channel Marketing
B2B channel marketing targets business-oriented customers through channel partners. Gartner’s modern buying journey in 2019 reveals that B2B companies find buyers and vendors through a non-linear marketing loop, completely different from the sales funnel.
Post-pandemic, the buying trends have shifted focus to a more self-service approach influenced by digital marketing such as buying through marketplaces, social media, and peer recommendations. The studies also predict that by 2025, 80% of the B2B communication between customers and companies will be through digital channels.
B2B channel marketing examples include:
- Wholesalers,
- Value-added sellers,
- Sales representatives,
- Digital platform affiliates.
B2B channel marketing allows you to include multiple touchpoints before a buyer makes a decision to purchase your products.
4. Online Channel Marketing
This type of channel marketing uses digital platforms to promote and sell products.
Popular examples include:
- E-commerce websites,
- Social media marketing,
- Search engine optimization,
- Content marketing,
- Email marketing,
- Affiliate marketing,
- Influencer marketing,
- Online advertising,
- Video marketing.
Broadly known as digital marketing, online channel marketing helps businesses sell products and services from any part of the world, in most cases without intermediaries.
5. Omni Channel Marketing
Omni-channel marketing ties online and offline channels together to provide a cohesive brand experience for customers. For example, Apple provides a consistent experience across its stores, mobile apps, marketplaces, and websites. The integration also extends to Apple Music and iCloud services.
Most marketers use a combination of Media Mix Modeling and Multi-touch attribution to get personal-level insights and use them in their marketing. Omni-channel marketing enables businesses to aggregate new customers and reach the old ones with an enhanced approach.
Contrary to what you may feel, multi-channel marketing and omnichannel marketing are not the same thing. Here’s an explanation:
| Aspect | Omni-Channel Marketing | Multi-Channel Marketing |
|---|---|---|
| Definition | An integrated approach where the marketing channels are interconnected providing a seamless and consistent customer experience. | There are fewer integration capabilities; it focuses more on using various channels to promote products and reach new customers. |
| Focus | Emphasizes creating a better customer experience across all channels. | Focuses on establishing brand presence and maximizing product reach. |
| Customer journey tracking | Allows comprehensive tracking across channels for businesses to understand customer behavior. | Tracks individual customer behavior on channels without a holistic view of the overall customer journey and experience. |
| Technology integration | High level of technology integration to ensure seamless data sharing, inventory management, and unified customer behavior data. | Each channel may use its systems and processes, and technology integration can vary. |
Omni-channel prioritizes customer experience instead of marketing platforms, which makes it an ideal choice to drive more customer retention rates and sales.
6. Event Channel Marketing
Utilizing events for promotions is called event channel marketing. You can set up trade shows, product launches, or sponsorships to create networks and eventually increase revenue.
When you plan your events with a multi-channel marketing approach, you will be able to promote your events easily through the following platforms:
- Social media,
- Email lists,
- Television ads,
- Radio spots,
- Press releases.
Once you have decided on the event-specific details, you can repurpose the same content for different channels, saving time and reaching more people at the same time. You can, naturally, use your email list to inform people if you’re short of allocating a big budget for different platforms.
Event email marketing allows you to share time-sensitive information for lesser pricing than other methods. Plus, you can send these emails to ultra-specific and segmented audiences.
7. Channel Partner Incentive Marketing
Channel partner incentives are rewards you give to channel partners for selling your products. These incentives encourage more participation from different channel partners and sell your products more effectively.
Successful incentive programs have the following in common:
- Measurable goals: The incentive program must have a clear and measurable goal aligned with your company’s overall marketing goals.
- Easy-to-understand rules: Ensure you set up easy-to-understand participation criteria and manage partner expectations such as the reward value and how to claim it.
- Tracking and reporting: Tracking is a critical factor in determining the program’s success, identifying the areas for improvement, and upgrading current strategies for partner programs.
- Adaptability: Make sure your incentive program adapts to the market changes and accommodates channel partner’s needs and requirements.
When you set up easy-to-track partner earnings and net new customers, you will be able to accomplish more with the partner incentive program and create lasting partner relationships.
While these are more relevant to online and digital platforms, the question arises — where does Campaign Refinery play a role in channel marketing strategies?
Why is Campaign Refinery the Best Choice For Your Email Marketing Needs?
Email marketing extends beyond colorful graphic templates and a list of subscribers — you must strategize your marketing approach to see results.
Campaign Refinery has the necessary tools and features to help you get started — automatic list cleaning, engagement rewards, credit system, evergreen flash sales, and mandatory domain authentication.
The automatic list cleaning tool removes harmful email addresses to help you achieve the highest deliverability rate in the market, and with the other exclusive features, you can expect to get the most revenue out of your investment.
We have always loved email marketing and are here to help fellow marketers kickstart their dream business and make it big with the help of our sophisticated tools and features.
If you’d like to know more about how our platform can help you grow, apply to become a client, and we’ll open the door to the next level of growth for you!
