A sales channel is the system through which you interact, bring out needs and present solutions to your customers by leading them to buy your products or services.
A sales channel is different from a distribution channel that has the sole function of delivering your products to a customer.
The purpose is not to find new customers, but rather close contracts.
In fact, acquiring and cultivating customers is the prerogative of marketing while the sales function is focused on the economic result of a commercial negotiation.
For greater clarity, here is a list of the most common sales channels:
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Internal Sales Force
The use of your own sales force allows you to build a customer portfolio to which you can sell continuously.
In more complex organizations, there is a sales department with a well-defined hierarchy at the top of which there is a sales director who reports to a certain number of sales accounts operating in specialized divisions or in different territorial areas.
This sales channel is very common in the b2b (business-to-business) sector.
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External Sales Force
When you decide to outsource your sales force to a third party, it's called Sales Outsourcing .
It is a service that is provided by an Outsource Service Provider and can be of two types: dedicated or shared.
The Dedicated outsourcing It consists of a team of very focused salespeople who operate exclusively for a particular company. In Shared Outsourcing, Instead, the sales team works for multiple client companies.
There are advantages and disadvantages to both dedicated and shared outsourcing.
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Retail
Retail sales means the sale of products to the final consumer through a store, showroom or an organized network of points of sale.
For local retailers, in-store sales have always been the most important element, but the way they are achieved is changing rapidly thanks to online commerce that allows consumers to buy at the times and places that are most convenient for them.
Compared to online commerce, physical stores can count on the value of the human resources that work there and that can offer customer service that is of real interest to the customer.
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Sale with vending machines
It consists of using coin-operated dispensers, capable of dispensing the product directly to the final consumer.
Vending machines or "vending machines" have undoubted advantages over other sales channels, in fact they are Self-service automated shops which can be placed in city center stores, shopping centers or offices and work practically independently without the need for employees.
The only thing to worry about is to supply the distributors with the products that are gradually running out.
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E-commerce
When the sale is carried out through digital channels carried out through a website, it is called online sales or e-commerce.
An e-commerce site can be b2c or b2b, in the first case the end customer is a private individual while in the second case it is a matter of selling products or services to other companies that could buy goods to resell them, so both the volumes and the prices applied are very different.
It is possible to activate an online sales channel through a website Proprietary e-commerce or thanks to a marketplace.
With a proprietary e-commerce site we are autonomous in adopting commercial and marketing strategies, but we must consider the expenses for the maintenance of the hardware and software infrastructure and the costs of specialized personnel on web marketing.
If we decide to sell online through a Marketplace like Ebay or Amazon, we do not have the same start-up and maintenance costs as proprietary e-commerce but we are obliged to pay a percentage for each sale made on the marketplace.
There are advantages and disadvantages for both a proprietary e-commerce and a marketplace.
E-commerce can be an effective sales channel for foreign countries as it is a virtual store that is always open that allows you to Sell your products 24 hours a day in various languages.
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Dealers
If you have a proprietary brand or brand product, you can use retailers as a sales channel. Resellers purchase your products and services to resell them to their end customers.
If you use this sales channel, you should sell large volumes of goods by applying payment conditions and prices in line with the expectations of your dealers, who in this case become your customers.
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System integrators
System integrators are companies that can add something to your products and services. These are still resellers but with higher skills as they are able to add value to the solutions you are a supplier of.
For example, a company that is able to customize software for end customers is configured as a system integrator.
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Direct response marketing
This channel allows you to reach potential customers directly by phone, paper mail, door-to-door or recently with the evolution of digital tools also thanks to e-mail marketing (Marketing Automation) and instant messaging systems (chatbots).
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Import and export
These are distributors who operate in a foreign market and import products from local distributors specialized in foreign sales.
In this case, if you want to start a new overseas sales channel You need to develop partnerships and be able to provide the necessary assistance and guarantee to support customers outside the national borders.
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Agents
Commercial agents are Authorized intermediaries that operate on behalf of one or more companies in a given geographic area. Usually there is no fixed salary but a predetermined percentage gain on the turnover produced for the principal, i.e. commissions.
The sales agent represents a very advantageous sales channel because he has certain management costs and on average lower than an employee and in any case proportional to turnover.
In practice, a commercial agent assumes part of the business risk by tying its earnings to the results it is able to obtain.
In Italy, commercial agents are divided into single-firm and multi-firm agents:
Single-firm agents exclusively promote a company to a certain geographical area. Multi-firm agents can promote several companies at the same time.
The adoption of a single-firm agent is preferable for complex commercial negotiations, large territorial areas or even in the case of the launch of a new product or the development of a new market.
In markets that are fragmented or do not allow high profits, it is preferable to use the multi-firm agent.
Testing new sales channels to acquire customers
To increase your company's turnover, the first thing you need to do is figure out how to increase the sales channels you currently use.
If you use one or two sales channels, you are reducing your chances of earning money and if you think your industry is different, obviously Some of your competitors are already taking advantage of this.
In fact, many physical stores have also started to sell their products on online sales channels, winning new customers.
If you have a counter sales store, don't underestimate the possibility of selling over the phone, perhaps even providing a home delivery service.
If most of your customers are located near your location, start developing commercial partnerships with an external sales force or agents and representatives operating in other territories to expand your customer base.
Similarly, if you sell in Italy successfully, you could develop a new sales channel abroad. There is no magic recipe, but what you can do is Start with this list of sales channels and try to test them one by one without any prejudice.
Managing sales channels with a CRM
If you want to win new customers, you will have to take into account the acquisition cost and the time it takes to turn a contact into a new customer.
Each of the sales channels listed can bring you new customers with different costs and times, but to evaluate the effectiveness of one sales channel compared to another, you will have to analyze the data through a management software specifically designed to monitor and manage sales processes: the CRM (Customer Relationship Management).
Thanks to the CRM you will be able to have an estimate of the number of deals made in a given period of time and understand how many have actually been closed. With a well-structured CRM, in addition to following sales processes, you will be able to verify your team's ability to transform the contacts acquired into new customers.
You can also segment your customers to identify active customers, or customers who buy more frequently and those who are dormant.
Test various sales channels and analyze data with a CRM to choose the most profitable one where to focus your resources.
To evaluate the sales channels that best suit your business, you can rely on FlashCRM the CRM software we use for companies that want to increase turnover by following the STRATEGIX METHOD .
It is a management software that helps you to be more organized, efficient and quick to increase turnover.
