Change the Channel

Though it may seem counter-intuitive to the uninitiated, a strong customer relationship is often much more important than a good product or a low price. If you don’t have the relationship yourself, you may be able to “buy” it using channels.

Effective use of channels – distributors and resellers of your products or services – can open the door to sales that would be impossible to reach on your own.

There are three generic points on the distribution continuum: intensive, selective, and exclusive. Generally, intensive distribution is for commodity products, selective distribution is used where there is moderate differentiation between competing brands, and exclusive distribution is used for specialty goods, where a high-quality image is supported by limited product availability.

Select channel members carefully. Remember that your ultimate customer often sees your partners as an extension of your business. A manufacturer or service provider that prides itself on providing products or services of the highest quality must be very careful about the kinds of channel members that it chooses to sell its offerings. If its products were to be represented by low-status channel members, there could be long-term consequences for its reputation. A rose by any other name may smell as sweet, but how good could a Porsche be, if it was bought off a Chevy lot?

In evaluating potential channel members, consider candidates’ credit and financial condition, sales strength, product lines, reputation, market coverage, sales performance, management succession, management ability, attitude and size.

Your channel strategy must be compatible with your product, price, and promotional plans. And these must be compatible with your overall goals and objectives. Achieving this kind of balance is what professional business management is all about, and also what makes resounding success such an elusive target.