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Channel Strategy: Examples and definition

Developing a successful channel strategy is crucial for your business’s ongoing growth and competitive advantage. Businesses today must find ways to connect with diverse audiences and expand their presence effectively. The channel strategies you use play a critical role in determining your business’s odds of success. 

In this article, we’ll explore the practical aspects of channel strategies, including how businesses can use various types of channel strategies to optimize distribution, improve customer engagement, drive sustainable growth, generate revenue, and more. Join us as we break down the essential components of channel strategy and provide key insights to help businesses navigate the challenges of selecting the right channel strategies to use.

What Is Channel Strategy In Business Planning?

Your channel strategy is the part of your business plan that determines how your products or services will reach your customers. Depending on the type of channel strategy, it may also involve how you reach your customers with marketing materials, how you generate engagement with your brand and more.

Types of Channel Strategy

Traditional channel strategy definition (in marketing and business) is a comprehensive framework for optimizing the distribution process in order to deliver value and foster relationships with customers.

More broadly, channel strategy can refer to numerous types of channel management for various business purposes, including sales channel strategy, marketing channel strategy, and more. Adopting a strategic approach to channel management involves making careful decisions about which intermediaries or channels you’ll use to reach your intended audience as effectively as possible. 

1. Distribution Channel Strategy

Distribution channel strategy involves selecting the various approaches your business will use for distributing products or delivering services to customers. It’s all about making decisions that impact the way products or services move from the manufacturer to the end consumer. 

When making distribution channel decisions, it’s very important to consider factors like logistics, intermediaries, relevant customer touchpoints, and more. Effectively utilizing different types of distribution channel strategies is crucial for businesses that want to optimize their market presence and ensure products reach customers efficiently.

There are many types of possible distribution channels. For more detailed information about each specific channel of distribution in marketing, look for dedicated resources like types of distribution channels PDFs. 

The most common 4 types of distribution channels for b2b software are:

  • Direct selling
  • Value Added Resellers ( VAR’s)
  • Channel Partners
  • Cloud Marketplaces

Each type of distribution channel serves a specific purpose and allows businesses to reach specific customer segments.

The Six Cs of Distribution Channel Strategy

The six Cs of distribution channel strategy have been defined in many different ways. For example, one iteration of the 6 Cs is:

  • Cost: Managing the expenses associated with distribution to ensure efficiency and profitability.
  • Capital: Allocating resources effectively to support distribution activities and optimize overall business performance.
  • Control: Exerting influence over various aspects of the distribution process to align with strategic objectives and maintain consistency.
  • Coverage: Determining the extent and reach of your distribution network to meet target market needs and maximize market share.
  • Character: Shaping the image and perception of your brand through your chosen distribution channels, considering alignment with brand values and customer expectations.
  • Continuity: Ensuring the seamless and consistent flow of products or services through your chosen distribution channels to sustain customer satisfaction.

Using a dedicated framework like the 6 Cs of distribution channel strategy is a great way to lend structure to your search for the best distribution channels. By carefully considering each of these 6 factors, a business can optimize its distribution channels and ensure that products are efficiently delivered to the right places at the right times.

What Is an Example of a Distribution Channel Strategy in Business?

The channels of distribution a business chooses to use play a crucial role in efficient product delivery. Common distribution channels for software examples include cloud marketplaces, value added resellers, and direct-sales models. For instance, consider a B2B software company employing a distribution channel strategy by leveraging the AWS Marketplace. In this scenario, the company strategically positions its software solutions on the AWS Marketplace, capitalizing on the platform’s extensive user base. By doing so, the software company taps into a ready-made distribution channel, reaching businesses actively seeking cloud-based solutions. Through the AWS Marketplace, the software is not only accessible to a broad audience but also benefits from the credibility and visibility associated with the AWS brand. This distribution channel strategy allows the software company to streamline its reach, connect directly with potential customers, and expedite the adoption of its products in the competitive landscape of cloud-based services.

Other examples of a distribution channel strategy in a business plan might involve selecting specific retail outlets directly, leveraging e-commerce platforms, or utilizing a combination of both to optimize market reach and customer accessibility.

2. Sales Channel Strategy

Sales channel strategy is the strategy your business uses to determine the best channels through which to source leads and convert them into paying customers. Developing an effective sales channel strategy usually involves conducting plenty of market research to understand your customers’ preferences, then choosing the best channels to maximize possible sales.

Successful sales channel strategy examples might include combining multiple tactics like direct sales, engagement on cloud marketplaces, and partnerships with channel partners. 

Sales Channel vs. Distribution Channel

Sales channels and distribution channels are both very important, but they aren’t exactly the same. Sales channels specifically focus on the process of selling, whereas distribution channels encompass the path the product takes from production to consumption. For an example you may have a direct sales model but then Distribute through a Cloud Marketplace to streamline contracting and payment with pre-approved cloud budgets called commits.

Omnichannel Examples in Sales Channel Strategy

Omnichannel strategies in sales incorporate multiple points of access for customers — like online shopping, mobile app purchases, and in-store services — to create a cohesive customer experience. By integrating channels like customer service chatbots and social media interactions, businesses can create a seamless experience for their customers and foster long-lasting relationships.

Channel Marketing

Channel marketing examples involve using a variety of carefully planned partner channels to promote and sell products or services. For example, manufacturers might sell through wholesalers, retailers, and online platforms simultaneously. Additionally, companies often leverage affiliate marketing programs, encouraging third parties to promote their products in exchange for commissions.

Channel marketing is a worthwhile strategy for helping businesses reach diverse customer segments and maximize market coverage. Taking advantage of a wide range of channels ensures that products are available through whichever outlets meet consumer needs and preferences.

3. Marketing Strategy Channels

Channel strategy in marketing is the planning and management of how a business will effectively reach its intended audience with its marketing messaging. Creating a successful marketing channel strategy is about ensuring your company’s marketing efforts reach the right consumers by carefully selecting the formats and platforms that align with your intended audience.

Channel Strategy in Marketing Example

A common marketing channel strategy example is using A/B testing to try out marketing content on different social media platforms to find out which one gets the best consumer engagement from your brand’s target demographics.

Digital Marketing Channels

Some common examples of digital marketing channels include: 

  • Social media platforms like Facebook, Instagram, LinkedIn, or TikTok
  • Organic search and search engine optimization (SEO)
  • Email marketing
  • Online advertising through platforms like Google Ads

What Is a Multichannel Marketing Strategy?

Multichannel marketing involves using more than one marketing channel to reach customers with your messaging, often by combining both online and offline platforms. Using multiple channels in marketing enables companies to engage with their audiences in various environments at once, contributing to a more cohesive online brand presence.

What Is an Omnichannel Marketing Strategy?

An omnichannel marketing strategy involves integrating various channels, both online and offline, to create a cohesive customer experience. It goes beyond a traditional multichannel strategy by recognizing the interconnectedness of different touchpoints, such as brick-and-mortar stores, websites, and social media platforms.

Omnichannel vs. Multichannel Marketing

Unlike omnichannel marketing, which aims for a seamless, integrated customer experience across all channels, multichannel marketing usually operates in a more siloed manner. Companies that employ multichannel strategies typically utilize each channel independently, without necessarily integrating them to provide a unified experience.

4. Brand Management Channel Strategy

Channel strategy also plays a pivotal role in brand management. Channel strategy in brand management is very similar to channel strategy in marketing. While channel strategy in marketing is about selecting the channels that will help you reach your target customers most effectively, channel strategy in brand management examples usually refers to selecting the right combination of channels to cultivate your desired brand image.

Importance of Channel Strategy in Brand Management

A business’s choice of channel strategy significantly impacts brand visibility and accessibility, making it crucial for overall brand success. Crafting a well-defined channel strategy template to guide you is essential for ensuring that your brand maintains a consistent presence across various touchpoints.

Small Business Channels Examples

Small businesses often find themselves in uniquely challenging situations when it comes to channel strategy because they do not have the resources that larger companies do, which can limit their available options considerably. However, there are quite a few sales channel strategy examples for small businesses that smaller enterprises rely upon to distribute their products or services. 

Common business channels examples for small businesses include strategies like:

  • Direct selling
  • Utilizing e-commerce platforms
  • Establishing partnerships with local retailers
  • Generating engagement on other types of online marketplaces

It’s very important to identify the most effective sales channels for small businesses in order to optimize market reach and resource utilization and ensure a sustainable business model.

What Is a Channel Strategy Template?

Channel strategy templates are invaluable tools for businesses seeking to implement effective channel strategies. These templates come in various formats, including channel strategy template PowerPoint presentations (channel strategy template PPTs) and channel strategy template Word documents. You can often find many kinds of channel strategy templates free online.

Templates offer a structured framework to help a company outline its channel objectives, target audience, tactics, and more. This helps to facilitate more efficient strategic planning and ensures a clear path towards successful channel management.

What Is a Channel Strategy Framework PDF?

A channel strategy framework PDF is a type of channel strategy template that can serve as a valuable resource for businesses that are looking for structured guidance on channel optimization. Within the boundaries of a larger, structured framework, a channel strategy template PDF can contribute to a systematic approach for aligning channel strategies with overall business goals. 

For example, a marketing channel strategy PDF could enhance a business’s channel management ability by providing a comprehensive overview of how each channel contributes to a broader marketing strategy.

Successful Channel Strategy Framework Example: McKinsey

McKinsey, a globally renowned management consulting firm recognized for its strategic expertise, employs an omnichannel approach to marketing and distribution. This approach stands out as an exceptionally successful type of channel strategy framework. 

By emphasizing seamless integration across various channels, McKinsey’s omnichannel strategy aims to create a cohesive and interconnected customer experience that acknowledges the importance of both online and offline touchpoints.

Why Is Channel Strategy Important?

There are many reasons why it’s important to plan your business’s channel strategy carefully. Here are just a couple of the most compelling reasons:

1. Strategic Competitive Advantage

A company’s strategic competitive advantage is its unique and sustainable edge that enables it to outperform competitors. This type of advantage is found in areas such as:

  • Especially innovative products or technology
  • Access to unique resources
  • A uniquely positive brand reputation
  • A  uniquely skilled workforce

Companies should seek to establish some kind of competitive advantage to differentiate their brands and attract customers who show long-term loyalty. One of the best ways to establish your business’s strategic competitive advantage is with your channel strategy decisions.

2. International Corporate Planning

International corporate planning is the strategic development and coordination of business objectives and resource management on a worldwide scale. This process takes into account factors like market expansion and global regulatory compliance to ensure effective operations and sustained success in international markets. Without a well-organized channel strategy, successful international corporate planning would be almost impossible.

How to Create a Channel Strategy

Every business’s channel strategy must take into account many unique factors, like the type of product or service and the market in which it is being sold. One way to improve your channel strategy decision-making process is to use a decision-making PPT. A decision-making PPT is a PowerPoint presentation that includes relevant data and visual aids that’s assembled to assist company decision-makers in understanding the key information they need to make informed choices.

The 6 Cs of decision-making PPTs are:

  • Construct: Formulate a well-organized plan or framework for decision-making, outlining key components and considerations.
  • Compile: Gather relevant information, data, and resources essential for informed decision-making.
  • Collect: Assemble all pertinent facts, opinions, and insights necessary for a comprehensive understanding of the decision at hand.
  • Compare: Evaluate and analyze different options or alternatives, assessing their merits and drawbacks to make an informed choice.
  • Consider: Reflect on the broader implications and potential outcomes of the decision by taking into account all relevant factors and perspectives.
  • Commit: Make a definitive choice and dedicate resources or efforts to implement the decision.

Are You Getting the Most Out of Your Sales Channels?

Ultimately, the types of sales, marketing, and distribution channels a business uses play a very important part in its chances of success. Different channels are best suited to different types of businesses with different audiences. It’s crucial to understand the various different kinds of sales channels and familiarize yourself with relevant sales channel strategy examples so that you can select the best channel strategies for your business and your target audience.

Improve Your Channel Partner Management With Torchlite

Many organizations tend to think of channel management as a strictly-human job because relationships are built by people. And while that is true, partnership management skills can only take you so far in the business world if you don’t have the tools to effectively manage your partner portfolio. Even the most skilled carpenter can only do so much with a simple hammer, after all.

Think of Torchlite as an entire toolbox for channel partner managers: it’s a software platform that provides an entire suite of tools, capabilities, and channels that can house an entire partner portfolio. On top of that, Torchlite’s “Simply Intelligent” software design makes it easy to customize workflows, channels, and portals for each partner, meaning that as your relationships evolve, Torchlite evolves alongside them. You’ll always have the tools you need and the ability to incorporate new ones through our seamless integration. Perhaps then, it’s better to think of Torchlite as not just a toolbox, but the entire tool shop.

It’s time to set fire to the old ways of Channel Management—and Torchlite is here to offer you the match. Book a demo with us today and see the power of Torchlite software for yourself.

Kelly Schwedland

Kelly Schwedland is the CEO of Torchlite, where he is at the forefront of scaling partner programs and revolutionizing the way businesses collaborate and drive growth, with a passion for driving revenue and fostering innovation through partnerships.