Introduction to Multi-Channel Strategy
By Diane Krakora, Founder, Amazon ConsultingA channel is simply the means to get products and services from you, the manufacturer, to your customer. For some consumer-oriented technology products, such as the cellular phone and personal digital assistant (PDA) market, several “middlemen” assist between the producers and the end users. These middlemen go by a variety of names: wholesaler, aggregator, distributor, reseller, and retail outlet. They are all a part of the channel that brings cell phones, DVD players, and the new Harrison Ford video to the consumer.
In high tech, we usually call these middlemen channel “partners.” They are “partners” in the sense that they work together with the manufacturer to bring products and services to consumers – either individuals or businesses (in which the purchasing agent is still an individual). These business relationships can be either contractually binding or bound by a handshake. However, they are not “partnerships” in the legal meaning of the word; neither partner has a legal stake in the other company.
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We focus on five key types of high technology channels: How does a company effectively integrate each of these channels into a cohesive strategy? These routes to market differ in two primary ways – the amount of sales leverage they create (“feet on the street” selling products) and the distance between the customer and the manufacturer. |
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When Carol, an independent writer, purchased a new computer she asked several other freelance writers what systems and configurations they used before purchasing her Dell 8100. MaryAnn, an IT decision maker, asked other IT professionals and current customers of the CRM software company about its features and benefits before purchasing Siebel. In fact, most people seek recommendations from their friends, coworkers, and other professionals before purchasing technology products. These recommendations or opinions influence the purchaser far more than any product advertising does. This influence marked the strategy behind MCI’s “Friends and Family” program. MCI’s program relied on trusted advisors – the target customers’ friends and family members – to promote the long distance carrier’s services. This type of word-of-mouth promotion strongly affects the decision-making process because it assumes personal experience with the product or service. |
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But you can also risk “bad gossip.” We’ve all heard the age-old adage that a happy customer tells one person and an unsatisfied customer tells seven people. It’s the same for participants of your multi-channel strategy. You are developing relationships with individuals who will recommend your products and services, and they in turn are influencing the purchase decisions of hundreds, if not thousands, of people, so do not take the task of designing a multi-channel strategy lightly.
This is the first of a 4-part column on increasing sales through a multi-channel strategy.
To view Part 2 of this column, please click here.
To view Part 3 of this column, please click here.
To view Part 4 of this column, please click here.
Please contact Amazon Consulting at info@amazonconsulting.com for more information.