Get More Customers by Adding Sales Channels by:Daryl Cowie
As hard as you may try to get out there and let people know about your company and
your services and products, you can only reach so many people by yourself. Hiring additional staff is one way to increase your visibility to potential customers, but it's not the only way. Here's a business management tip for you. One of the best ways to multiply your efforts, and your sales, is to add outside sales channels to help you sell your wares.
Sales is a numbers game. If you want to continue to grow beyond a certain size you will reach a point where you need to get outside partners offering the value you bring to as many customers as possible. There are four common sales channels that businesses commonly use to expand their reach to a wider marketplace.
Direct Sales
Direct sales is the cornerstone of many successful sales organizations. Direct sales refers to sales people that work for you and take your product and service offerings to the end customers. Most successful businesses have sales people dedicated to selling the solutions of that business, but businesses that only sell through their salaried sales people are missing out on a lot of opportunity.
Distributors and Affiliates
Distributors and affiliates are people that take your solutions to different markets in exchange for a sales commission. The primary value that distributors and affiliates bring is their ability to contact people that you would not otherwise be able to contact, and to provide front line support for simple questions. By adding distributors to your sales network you broaden your market into areas that might not even think of entering, let alone know how to enter successfully.
Distributors also bring value to your cash flow. Think about this. If you hire an additional sales person you need to start paying them right away. It may take them several months before they sell enough to cover the cost of their salaries, but they still need to be paid during that time. Simply put, you need money up front to hire a sales person. Affiliates and distributors on the other hand get paid when they sell something. They are willing to do this because you pay them a handsome commission when they do sell something; more than you would pay a salaried sales person. The advantage to them is that they make more per sale. The advantage to you is that you only pay them when they actually sell something and make you the money to pay them from.
Depending on the type of product or service you offer, it may make sense to offer distributors exclusive rights to a certain part of the market to ensure that they don't have to compete against another vendor offering the same solution. Competing vendors can bring you into a price war situation and ultimately lower the value of your offering. On the surface this may seem like a good idea if the price drops come out of your distributors' profit margins and not yours, but be careful. In the long term, you succeed by helping your customers succeed, and distributors are really your customers. They essentially buy stuff from you at a discount, and resell it to others. If you set them up to succeed, they will help you for years to come. If you set them up to fail by putting too many competitors in their market space for example, then when they fail you fail.
There are many advantages to using distributors and affiliates to extend your sales reach. Every business should consider whether adding this sales channel makes sense for them.
Value Added Resellers
Value added resellers are like distributors and affiliates, but they add something more to the mix. Whereas a distributor takes your product and offers it to the market, a value added reseller takes your product, adds something to it to make it even more valuable, and then offers it to the market.
Suppose you sell barbeques. You make a great barbeques, and are very successful. People come to your store, pick one out, and take it home. Now suppose someone sets up a shop across the road where they assemble barbeques for people and add custom parts like rotisseries, temperature sensors and lights for cooking at night. This would represent a great value added reseller opportunity. They provide something that many people who buy your barbeques want.
Now you have 2 choices. If people ask about custom parts and assembly you can just refer them to the shop across the road, or you can go and make and arrangement with the shop across the road that you will sell them your barbeques at 20% off to resell to their customers at list price. What happens then? Instead of putting together any kind of barbeque, they start recommending your barbeques to everyone they meet because there's something in it for them. They take your product, make the total package even more attractive, and become a value added reseller.
Value added resellers can be very effective at targeting your offering to a particular niche market. Different types of customers may want to use your products in different ways, and value added resellers can add the things their particular group of customers want. Having many different value added resellers addressing the particular needs of many different customer groups can expand the attractiveness or your business offering to many new people.
Joint Ventures
Joint ventures are another great sales channel. A joint venture is essentially when two partners decide to introduce each other to their respective customers. You may have 1000 customers that do business with you on a regular basis, and trust your judgment. A complimentary business across town may have a similar list of customers that trusts them.
The goal is to find a business that has a similar type of customer as you, but offers a different product or service. If you sell children's clothing, and you know a business or person who sells child car seats and strollers there's a good chance that you have a similar type of customer. If you can arrange a deal on children's strollers, your customers would probably be glad to hear about it. How do you do it? There are lots of ways. Bring some strollers to your store and take some clothing to the other store. Give a 20% off coupon for the other store to every customer at your store and have the other business do the same. Announce a special one-time only sale where you both send out flyers to your customers and then get your wares together for a special sale. There are many ways to do it.
The key to successful joint ventures is not having complementary products, but having similar types of customers. The power of joint ventures is that you each already have a list of customers that know and trust you. This is a powerful way to reach 100s or 1000s of new people all at once with very little cost. Your joint venture partner also wins because they get the same benefit you do.
Many successful business people feel joint ventures are the most powerful sales channel there is. It is unfortunate that it is also one of the most over-looked.
Summary
If you're looking for a boost in sales, don't feel that you need to get it all from your employed sales team. If you're a salesperson, don't feel you have to get it all by only approaching end customers. Distributors, affiliates, value added resellers and joint ventures are all powerful ways to extend your sales reach.
Treat your sales channels like the valuable clients and customers they are, and don't be afraid to share a generous portion of the profits with them. Remember, these sales channels are bringing you to customers you would otherwise not be able to reach at all.
About the author
Daryl Cowie has shared management tips with 1000s of people in over 30 countries around the world. His mission is to help you and your company turn business opportunities into business realities. Sign up for his free business management home study course at
http://FreeManagementTips.com
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