In my previous three articles, I explored the importance of developing effective strategies for your ecommerce business. This starts with knowing who your customers are and what products and services they buy from you, and why. Those three articles are:
- Who Needs an Ecommerce Strategy, Anyway?;
- 7 Things to Know about Your Customers;
- What’s the Value Proposition of Your Ecommerce Company?.
This week, I’ll address potential sales channels to reach your target consumers. Companies that choose the proper channels — sales channels and marketing channels — have tremendous leverage for growth.
How Do You Choose Sales and Marketing Channels?
Before the Internet, there were essentially two types of sales channels: direct and indirect. Once a company chose its sales channel, it built a corresponding marketing strategy to support it. If you were a brick-and-mortar store, that’s where you sold your products. If you were a wholesaler, you sold through distributors or resellers. It was fairly straightforward.
Today, as an ecommerce business owner, you may be thinking that your channel is obvious: the Internet. You have a website, you offer products, and you promote your products through various Internet marketing channels like pay-per-click ads and comparison-shopping engines. You have a Facebook Fan page. You utilize search engine optimization and have a “1 click” checkout in your shopping cart. What else do you need?
The answer depends largely on your customers and products. It may include leveraging other direct marketing channels like display ads within the Google or Microsoft networks or on Facebook. It could include affiliate partners marketing your products, print ads, comparison shopping feeds, or product ads on marketplaces, such as Amazon.com.
Your strategy may also include indirect marketing channels like blogs, and customer-engagement strategies using social media, public relations, speaking engagements, newsletters, contests, and sweepstakes.
On the sales side, is your own website really reaching your entire target market or do have products that could also be sold in marketplaces like Amazon.com, eBay.com, Sears.com, and Buy.com? Should you open a wholesale store or is your product better suited for direct consumer sales? Are there niche online stores that would better suite segments of your market? Would you benefit from adding a telesales staff to increase your up-sells to engaged consumers from your website?
There are no simple answers. To highlight the complexity of channels today, consider Apple. It sells directly and indirectly. It has its own brick-and-mortar stores and brick-and-mortar resellers — sometimes directly adjacent. Apple sells its own products, and it also makes tremendous revenue and profits from reselling music and apps. It has upended the traditional notion of sales channels. Yet both Apple and its partners continue to flourish. Not every company can be the next Apple, but we should all learn from its success.
Choosing Sales Channels
Your strategies for sales channels will influence the marketing channels you select. First, decide whether you want to sell directly or indirectly to your target consumers. If you have your own online store, you are already selling directly. But, many successful ecommerce businesses never sell products directly. They market exclusively through indirect channels like marketplaces. To the consumer, this is a direct sales channel. But if you sell your products or even have a microstore within a marketplace, these are really indirect sales channels. If you sell on Amazon.com, for example, that company owns the customer experience. It collects the money, sets return policies, and risks its reputation. Other marketplaces include Sears.com, eBay.com, Newegg.com, Buy.com, and Esty.com.
Another indirect channel is affiliates. You may have affiliates that sell your products or act as a marketing channel. Either way, this can be a powerful channel.
If you are a manufacturer or distributor, you should evaluate selling through channel partners, directly to consumers, or both. This is an area of great change. When Proctor & Gamble, for example, decided to market diapers directly to consumers via an online store, it created much angst among its partners and resellers. I foresee huge change in this area, with manufacturers selling increasingly through multiple channels, including their own websites.
Aligning Marketing Channels
Once you have selected your sales channels, you need to develop the marketing channels to support them. Will you choose indirect brand marketing, or direct marketing with a call-to-action that links to a shopping cart?
Direct marketing generally means targeting a specific message for your product or service to the end consumer. Most ecommerce businesses use search marketing strategies to ensure that their ecommerce stores are visible to search engines; search engines still deliver the highest volume of traffic to stores. But, there are many other direct marketing channels to consider, such as the following.
- Email marketing.
- Search ads.
- Display banner ads.
- Print ads.
- Radio or television ads.
- Direct mail.
- Affiliate networks.
Indirect marketing channels are where the biggest changes have occurred in the last decade. Indirect channels generally are used to create awareness for your products or brands.
The emergence of social media continues to shape the landscape of brand and indirect marketing. Choices for indirect marketing are too numerous to list, but here are some key options to consider.
- Social Media. Facebook, Twitter, LinkedIn, Pinterest, Tumblr
- Network ads. Google’s AdSense ads, for example.
- Blogging. Your company or personal blog.
- Thought leadership. Contributing and commenting on authoritative and industry related websites and blogs.
- Press coverage. Public relations campaigns.
As you evaluate various channels, consider the factors that lead to sales and impact profits, such as traffic, costs per-impression or per-click, and conversion rates. Look at the impact on the other areas of your business model. Ask important questions about each potential channel, such as:
- “Do you have the staffing to support a social media strategy, or will you need to outsource those activities?”
- “How much will that outsourcing cost at what level of commitment?”
- “If you sell wholesale, can you and your suppliers support the level of inventory required?”
All sales and marketing channels require infrastructure and organization. I’ll address those issues in the coming weeks.