What is Channel Management?

Jim B.
Jim B.
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Businessman giving a thumbs-up

Channel management is a term that refers to the way that a business or supplier of products uses various marketing techniques and sales strategies to reach the widest possible customer base. The channels are all of the various outlets by which the product is marketed and sold to customers. When done properly, channel management motivates those channels to sell the product and ultimately develops a better relationship between customer and product. This is achieved by identifying the goals for each distinctive channel and then implementing various marketing strategies to make sure that those goals are attained, all while staying consistent to the overall brand of the business.

The world of marketing has become much more complicated as technological advances have taken hold. No longer can a business rely simply on good customer relations or word of mouth to maintain or improve revenue. Possibilities for marketing a product or service grow seemingly each day, and keeping track of all of these disparate marketing avenues is not an easy chore. That is why the concept of channel management has become so prevalent in marketing.

Ideally, channel management will organize all of the possible ways a business can reach the customer. While there is no single way to attack this chore, the general idea is to improve not only the marketing but also the distribution process itself. Communication between business and customer is streamlined by this process, and an ongoing relationship is forged if done correctly. Methods may differ, but that is the ultimate goal of the process.

Properly assessing each of the disparate sales channels is a key aspect of this process. A business must determine exactly what it wants out of each channel and the individual accounts within those channels, both in terms of reaching customers and keeping them. It must also clearly define the framework for each of those channels and be consistent within it. Identifying the segment of the population affected by each channel also helps to determine the best products to pitch to those channels and the best way to market those products.

If it is done effectively, channel management will allow the business to meet the needs of the customers within each specific channel. Direct communication with customers in each channel is of the utmost importance. Once this is achieved, the business will have a better idea which marketing strategy best suits that customer base, whether it involves promotions, advertising through all media and direct to the customer, or merchandising. Although the techniques may vary from channel to channel, the overall strategy must always brand the business consistently throughout all sectors.

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Discussion Comments

@Telesyst: Channel management software is available and could be helpful to the new business owner. There are a number of companies that provide this software. A little research should point you in the right direction to meet the needs for a specific company.

How can a relatively new business learn more about channel management? It sounds like a comprehensive approach to marketing, but many business owners may not be sure how to get started.

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