Channel Marketing is a type of marketing strategy that relies on third parties to grow and scale the business. The third party, referred to as channel partners, help in taking the products and services to the market. Channel Marketing is an important growth strategy that is adopted by both large and small businesses.
Learn what is Channel Marketing, how it works and how to choose the right Channel Marketing software.
Last updated: Apr 14, 2021
What is Channel Marketing?
Channel Marketing is a growth marketing strategy adopted by businesses to grow and scale the business. Channel Marketing involves usage of third parties to sell your products and services to customers. These third party entities are referred to as channel partners. 75% of world trade happens through indirect selling through channel partners.
There are two kinds of channels:
Sales channels focus on sales, not so much on delivery. Sales channels deliver either leads or orders to service partners such as service outsourcing partners, and nothing to do with the actual delivery of products and services. And, then there are Sales channels used to distribute perishables with focus on time to the customers.
Marketing Channels, ironically, are always Sales Channels but not necessarily the other way around. Marketing channels include sales and delivery related to the product or service. A good example of this kind of channel is a retail outlet.
Other ways to classify Channels
It is also common to think of channels in terms of how far removed the origin of the product or service is from the end customer/consumer.
The direct channel is when the goods flow from the manufacturer to the consumer direct. This channel is not the topic of this article.
Then, there are two or three-tier distribution channels – manufacturer to retailer/wholesaler to the consumer, and manufacturer to distributor to reseller to the consumer. Value-added reselling (VARs) is a variant of this 2nd type of channel. The reseller adds value on top of the original product (such as an installation service). VARs channel is quite popular in the high-tech industry.
Types of Channel Marketing
All the typical marketing focuses on direct marketing such as consistent brand experience, 4 A’s of marketing, demand generation, and others apply to channel marketing as well. Channel marketing is then about using marketing automation, campaign management, social media management, content management, lead generation and management to channels. However, you have two kinds of an audience here to deal with – Channel partners that must be aligned to your marketing strategy, as well as the end customers.
Channel marketing is focused on communicating the value of your products and services to, with, through, and for channel partners
Here are some of the terms that are commonly used.
Multi-channel Marketing- Multiple, but separate communication channels are used between the customers and the business.
Cross-channel Marketing- Multiple and connected communication channels are used between the customers and the business.
Omni-channel Marketing- Multiple and interactive communication channels are used. Not only these multiple channels are connected and communicate with each other, but they work seamlessly and simultaneously together to provide the customers with a unified experience across channels. The customer can be shopping at an e-commerce site, later continue the shopping in a retail store, and the experience will still be seamless.
Many other kinds of marketing can broadly be considered channel marketing. You can refer to them in the Cuspera Guides section. Some of them are listed below:
Affiliate Marketing is where an affiliate earns a commission for marketing somebody else's products. The sales are tracked via affiliate links from one website to another.
Partner Marketing is popular in the high-tech sector. Partner marketing is about a joint Go-to-Marketing program between two or more companies. Nike and Apple collaboration is an excellent example of Partner Marketing
Alliances Marketing is very similar to Partner Marketing, but it tends to be deeper than the latter – from a strategic, time-horizon perspective. It can lead to joint ventures too.
What is Channel Marketing Software?
Channel Marketing Software is part of Marketing Automation applied to Channels. It helps empower channel partners to align with and leverage all types of marketing activities and assets of your brand including marketing automation, messaging, advertising, demand generation, so on to drive the sales through the partner reach. Channel marketing is a significant part of the ‘Through-Channel Marketing Automation’ (TCMA) framework created by Forrester analyst Jay McBain in 2017.
The other elements of channel management, such as Partner Relationship Management (PRM), are related to the channel marketing software but are not part of the same.
Some of the business activities/processes addressed by the channel marketing software include Marketing metrics, Content sharing, Contest & awards, Loyalty planning, Social promotion, Channel visibility, Partner playbooks, Lead Management (nurturing, scoring, passing and tracking), Campaign management, Customer experience. They can also address a variety of partner channel configurations such as Through-partner, To-partner, and With-partner models.
Cross-channel advertising software
Cross-channel advertising software is a related category of software with an exclusive focus on advertisements across multiple digital channels, be it search, display, social, or other digital media. It may also seamlessly integrate with DSPs, ad networks, so on.
With this cross-channel effort, one can connect with customers multiple times through their preferred channels, expand the brand reach across all targeted demographics, and reduce marketing costs by choosing the most cost-effective channels for each demographic.
What are the Benefits of Channel Marketing Software?
The first benefit of Channel Marketing is about an increase in sales. Properly implemented Channel Marketing makes it possible for all of your customers and consumers to connect with their own favorite channel. Enabling customers to choose their channel increases your revenue, customer base, consumer engagement, and conversion rate and lowers customer acquisition costs.
The second benefit is about aligning and enabling your channel partners and allowing them to build on top of your own messaging, branding and demand generation within their local markets for successful customer experience. This alignment will help in ensuring consistent customer expectations across all the channels, assisting in turn marketing optimization but also the growth imperative.
The third benefit is about meeting customer expectations. More than 2/3rds of customers prefer an integrated marketing approach giving them the freedom from being constrained to a channel.
As the focus is not on a particular channel, marketers can adjust to changing and fragmented customer journeys. For instance, one can tailor the messages, as different types of messages work better through various channels.
In summary, Channel Marketing can help in increasing speed to market, reducing the costs, and enabling brands to optimize the marketing spend based on better insights. Those teams that can align their marketing across different channels will likely outgrow the market.
Which are the industries that benefit from Channel Marketing Software?
Some of the most prolific users of channel marketing software are:
Manufacturing. Education, Financial Services, Internet, Technology, Software, Healthcare, Business Services, Logistics, Marketing, and Creative Agencies.
Who are the users of Channel Marketing Software?
Both the brands and their channel partners benefit from a channel marketing software deployment as it helps the corporate marketing efforts to support the unique needs of the partner’s reach. It will also improve the marketing ROI as the partners may not be fully equipped or have the requisite bandwidth to drive the marketing on their own.
Features of Channel Marketing Software
Here are some examples of features of a Channel Marketing Software product:
Content Related Features
Access Control - Access marketing collaterals, assets, and tools
Promotion tools such as Webcast management
Campaign Related Features
Campaign assistance for the partners who may not be fully equipped to handle campaigns.
Customizable Branding, Co-branding enabling either local reach or gain by the combined reach.
Customizable Templates for reporting, campaigns
Partner Related Features
Leaderboards and other gamification features
Single Sign-On facilitating simpler and more secure access.
Feedback Management in real-time
MDF Platform (or Integration between MDF platforms)
Social Media Integration
AI in Channel Marketing Software
With the increased visibility of data across all the channels, AI is helping brands understand customer behavior and personalize at scale. Building personalized, content-rich campaigns and customer journeys is now possible with AI-enabled Channel marketing software by themselves or as add-ons.
One of the biggest challenges for marketers will be understanding the connected customer journey across all touchpoints and how best to interact on a personal, content-rich level.
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Buyer’s Guide: Guide to choose a Channel Marketing Software
According to Forrester, less than 17% of the organizations have an effective Channel Marketing Automation in place. It indicates the need to assess the organizational readiness to deploy the channel marketing software.
The stakeholders involved are from multiple companies. Their readiness, as well as capabilities, need to be taken into account. As an example, some of the large partners, such as Ingram-Micro, may have their own in-house marketing automation tools. Yet, some of the smaller partners may have a rudimentary or no automation of any kind. Making both the types of partners leverage the solution calls for implementing parts that can benefit both from day one. One such example will be content syndication to showcase your products on their website with ease. At the other extreme, it may be difficult to get alignment on activities such as integrated campaigns.
Buyers are recommended to consider peer reviews and expert opinions that are
available on Cuspera before making buying decisions.
Cuspera’s AI based engine guides you through the requirement process to help you
the right software.
When selecting the channels, please consider both the dimensions – the distribution and marketing channels.
B2B and B2C companies can sell through multiple channels that may include:
Value-Added Reseller (VAR)
Sales Agent/Manufacturer’s Rep
B2B businesses and marketers need different marketing channel strategies than B2C businesses because of the fundamental difference in their customer/consumer base. Some of these channels are:
Content marketing & SEO
Word-of-mouth / referrals
Combining these two dimensions of distribution channels and marketing channels for your industry and go-to-market motion will help you determine the elements the Channel Marketing Software should support.
One would also prioritize any integration with the existing systems such as CRM, Partner Relationship Management (PRM), etc.
It is essential to evaluate whether the particular channel marketing software has any vertical, geo, or another kind of a focus that makes it more suitable for your needs.
Finally, evaluate whether the benefits of AI in the selected software provide excellent ROI.
Challenges in Deploying a Channel Marketing Software.
Channel Related Challenges
Each distribution channel has different degrees of readiness and willingness to adapt and align.
Their capability levels vary both technologically as well as process-wise.
The ongoing training and onboarding the ever-changing teams at partners is a significant challenge
The more complex is the marketing activity, the more support the smaller partners need either monetarily or services wise.
Expect a pilot phase of about six months for the deployment to stabilize.
Implementing a reward and recognition process to support the deployment
Expect some partners to resist this change as it will increase the visibility of partner engagement
Developing a target messaging that can be tailored to meet a wide variety of audience’s preferences, demographics, channel preferences, so on is not easy
It is challenging to know which channels, campaigns contributed to ROI unless the software is competent in this regard. Not knowing ROI can kill the rollout of Channel Marketing quickly.
Advances in Channel Marketing Software
Closed-loop analytics and AI will accelerate measurement across the channel. These analytics will be particularly important to measure the ROI as well as Optimization efforts.
Digital marketing advances, in turn, help create new opportunities for targeting, personalization, and optimization.
AI and big data are helping brands understand customer behavior and personalize-at-scale.
Cloud-based offerings will become mainstream for many channel programs going forward.
Channel marketing goes hand in hand with Channel sales enablement tools – which are becoming available, allowing interactive product demonstrations, so on.
Not only would the ideal tool have access to all product lines, but unlimited users will have access 24/7, online or offline, anywhere in the world, providing a universal experience regardless of location or platform. …
ROI for Channel Marketing
Channel marketing can drive an upside of 15% to 30% in revenue.
Multi-channel marketing can generate up to 25% increase in conversion rate per business2community.com
Multi-channel customers also spend 4X compared to single-channel consumers per business2community.com
Businesses that adopt omnichannel strategies achieve 91% greater year-over-year customer retention rates compared to a business that doesn’t, according to a survey conducted by Aspect Software.
Companies with extremely strong omnichannel customer engagement retain, on average, 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement. (Aberdeen Group)
Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel. (Google)
Stats show that brands using three or more channels in an automation workflow can generate great results (per Clickz.com):
Engagement rate: 18.96% on omnichannel vs. 5.4% on single-channel
Purchase frequency: 250% higher on omnichannel vs. single-channel
Average order value: 13% more per order on omnichannel vs. single-channel
Customer retention rates: 90% higher for omnichannel vs. single-channel
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