A sales channel is the medium you use to sell your products or services. For example, a physical retailer of coffee beans would use a brick- and- mortar coffee shop to sell his products which would include raw materials and beverages. The coffee shop is his sales channel. On the other hand, the wholesaler of coffee beans would have the company’s distributors as the sales channels for its products.

Direct Sales Channels Vs. Indirect Sales Channels: What Is The Difference?

In our first example, the coffee shop owner is selling his products directly to his customers. In the second example, the wholesaler has enlisted the help of middlemen; the distributors and perhaps other resellers, to sell the company’s coffee beans.

The coffee shop owner is utilizing a direct sales channel to sell his products. There are no middlemen involved and he gets to keep all of the profits. Of course, the coffee shop owner employs cashiers who also function as front- line salespeople.

Not only will cashiers process the transaction, they will also upsell other products such as muffins, sandwiches, or perhaps entice you to upsize your coffee from a “short” to a “large”.

Employing the cashiers will entail additional costs in the form of salaries and benefits. Some retailers will give cashiers sales quotas. This will give the company an idea of the ROI per cashier.

Other companies may employ different direct sales channels for their products and services. For example, a telecommunications company may set up a telemarketing team to call leads generated by the marketing team.

Another option for the telecommunications company would be to outsource telemarketing services to a third party. With this option, the company would not cover the overhead costs of the telemarketing agents but would have to pay the management fees of the third party service provider.

Other types of direct sales channels include resellers and personal sellers who purchase the products and sell them to targeted buyers.

In contrast, the wholesaler is using indirect sales channels to sell the company’s products.

The company does not keep all of the profits as it has to pay commissions and incentives to the middlemen. However, the company’s overhead costs are low because it does not pay additional overhead costs to hire personnel to sell the products directly. By using indirect sales channels, the company does not have to pay salaries, benefits, and incur other incremental costs.

What if you are running an e-commerce business? What kind of sales channel will you be using?

The answer may seem obvious. As an online business, you are using the Internet to sell your products and services. You may have an e-commerce website where interested customers can browse through your selection and complete a transaction at the Checkout Counter.

However, the website is not your only option. You might decide to sell your products in a “marketplace” such as Amazon or eBay. By selling through Amazon, you will be capitalizing on the website’s gigantic community of users. As a tradeoff, Amazon will take its share of your sales and you will have to abide by the website’s rules and regulations.

Another option would be to sell your products through affiliate marketers. They function like the distributors and resellers of the coffee bean company. Instead of paying overhead costs for hiring sales agents, you pay affiliate marketers a percentage of your profits.

Thus, with an e-commerce business, you could sell directly to your customers from your website or sell indirectly through community marketplaces or affiliate marketers.

The question is: How would people know about your e-commerce website; it’s products and services?

It is important to know what sales channels you will be using to sell your products and services so that you can identify the marketing channels needed to promote them to your intended audience.

want to know more about web design

Aligning Your Sales Channels With Your Marketing Channels

Sales and Marketing are related functions but independent of one another. The marketing team’s objective is to generate interest for the company’s products and services by utilizing a variety of techniques, processes, and tactics that market and promote their value to the prospective customer.

The sales team’s objective is to close the deal. It is focused on converting interest into revenues. Salespeople work to turn prospects into paying customers. This is the general idea behind the sales funnel. Marketing brings prospects to the funnel. The sales team guides them through the funnel until the prospects come out of it as paying customers.

The greater the number of prospects marketing brings in, the larger becomes the entry point of the funnel. Thus, marketing may have to utilize different marketing channels to generate a higher volume of prospects or leads.

Marketers make decisions based on ROI or Return on Investment. Therefore, if you use a new marketing channel that shifts interest away from an existing marketing channel without improving your conversion rate, the investment in the new marketing channel is not worth it. You will be incurring greater costs without improving sales conversions.

There are a good number of marketing channels to choose from; each one has its own strengths and weaknesses. Your choice of marketing channels should align with the sales channels in order to support your business goals and objectives.  

Direct Marketing Channels Vs. Indirect Marketing Channels: Which Ones Should You Choose To Support Your Sales Channels?

Just like sales channels, there are direct and indirect marketing channels. What is the difference between the two types of marketing channels?

With direct marketing channels, you are targeting a specific or segmented group in your audience. A good example of a direct marketing channel is email marketing whereby you have built up a mailing list consisting of newsletter subscribers, existing customers, and social media followers.

One of the biggest advantages of email marketing is that you can segment your mailing list into categories. This way, you can create content that is tailor-fit to meet the needs, interests, and concerns of your subscribers.

For example, if you are an online retailer of supplements, you can segment your content according to interest.

You can categorize your subscribers according to those who want to lose weight, gain muscle, fight aging, and improve sports performance. Then, create content that offers products catered to meet the goals of each specific interest.

You can read more about the benefits of email marketing in our articles, “7 Best Practices For Email Marketing” and “Why Email Marketing Is Very Much Alive”.

Another good example of a direct marketing channel is Pay- Per- Click or PPC ads. The people who click on your PPC ad are those who have interest or need of your product or service. They will land on your website home page and hopefully, stay long enough to find what they are looking for.

Other examples of direct marketing channels are:

  • Display banner Ads
  • Direct Mail
  • Radio Ads
  • TV Ads
  • Newspaper Ads

Direct marketing channels are ideal if you are selling your products in a brick- and- mortar store or if you have a website.

Indirect marketing channels are primarily used to promote or create greater awareness about your business; its products and services. If you are engaged in e-commerce, you can use indirect marketing channels such as social media marketing and blogging to drive inbound traffic to your website.

For example, you can blog about your business; how it began, why you chose this specific industry, and your expertise. You can also publish content that showcases the value of your products and services. These types of informative, value-added content include “How To” and List-Type articles.

Once you’ve uploaded your blogs on your website, you can distribute them to your various social media networks. The purpose is to entice readers to visit your website so they can learn more about your business.

Staying active on social media and other online platforms are great ways to remain visible on the Internet. The more people read about you, the greater the probability of generating interest in your business.

Brick- and- mortar businesses likewise benefit from indirect marketing channels such as social media and content marketing. Fashion retailers use image- heavy social media networks like Instagram, Pinterest, and YouTube to showcase their products.

Video marketing has become a powerful tool for driving traffic and increasing sales conversions. Companies have links to their YouTube channel embedded in their websites. Interested parties can go through “Explainer Videos” then visit the YouTube channel to explore more video-based content.

If you are utilizing indirect sales channels such as an online community marketplace like Amazon, you can write product reviews and include a link to the page offering your products and services. You may also want to contribute to industry-related websites and direct readers to your website or product page.

Conclusion

Are there limits or constraints to the type of sales channel you want to use for your business? You will have to answer these three questions:

  1. What is your budget? Do you have enough resources to support and sustain sales and marketing teams?
  2. Are you open to the idea of outsourcing sales and marketing activities to third- party service providers?
  3. How reliable are your suppliers? Can you effectively manage the level of inventory needed to comply with demand?

Large companies like Apple and Amazon have incorporated different types of sales channels into their business development strategy with great success. Both companies have brick- and- mortar locations as well as e-commerce websites that directly sell their respective products to customers.

They have integrated outsourced telemarketing services with in-house sales agents to spread out the costs and cover more ground. Of course, these companies have maintained an active online presence through social media and other Internet- based platforms.

The bottom-line is you should use sales channels to help grow your business. The types of sales channels you choose will depend on your goals, objectives, and budget.

By knowing the proper sales channels, you will have a better idea on which processes to use to effectively market and promote your business.  When these channels are aligned, your marketing efforts will be able to generate more leads for the sales funnel. Then, it will be easier for your salespeople to do their job and convert prospects into paying customers.

If this article has got you seriously thinking about using certain sales channels for your business, give us a call or drop us an email. You can consult with us free of charge!

learn more about website design with orange banner

Facebook is the largest social media network on the Internet. It has more than 2 Billion members with more than 1 Billion active users every day. Facebook’s sheer size makes it an attractive platform for marketers to run campaigns. However, when it comes to ad distribution, size hardly matters. Unless it can be seen by prospective end users, your ad will be overlooked like a typewriter in an office. Facebook Ads work because they place your ads where your potential customer can see them right away.

8 Reasons Why Facebook Ad Works:

  1. Largest online community with more than 2 billion members;
  2. Largest number of daily active users with 1 billion members;
  3. Highest Return on Investment (ROI) among all social media networks;
  4. Offers 10 campaign objectives that support a variety of marketing goals;
  5. Multiple ad formats to run your campaign;
  6. Targets your audience by allowing you to create a buyer’s profile;
  7. Allows you to set your advertising budget;
  8. Uses 4 platforms to run your ads: Facebook, Messenger, Instagram and Audience Network.

What Are Facebook Ads?

Facebook ads are paid advertising content that appear on your News Feed and on the right hand column of your home page if you are on a PC desktop. Placement of Facebook ads are based on the following criteria:

  • User activity;
  • Demographic information;
  • Device use information;
  • Information provided by advertising and marketing-partners;
  • Off- Facebook activity.

The keyword is “paid” advertising content. Unlike organic search marketing where you post content for the purpose of attracting the interest of potential customers, with Facebook ads you pay to have your ad featured.

The advantage of paid advertising is that your ad will be placed where potential customers can see it right away. Anyone who clicks on your ad will end up on your website.

Thus paid advertising can give your website an immediate boost up the search rankings. Because these are people who have shown interest in your advertised products or services, paid ads may also increase your sales conversion rates.

Many believe that Facebook began its transition from social media network to media company back in 2012 after its poorly received Initial Public Offering (IPO). However, Facebook Ads origins can be traced back to 2004 when the company offered paid advertising under its Facebook Flyers feature.

Facebook Flyers were simple ads that cost between $10 and $40. They functioned like the notice boards you would typically find in a college campus. Students used Facebook Flyers to promote social events while small businesses ran ads that targeted specific campuses.

As it turned out, Facebook Flyers became the blueprint for Facebook Ads. It carried over its features to customize audiences, create campaigns according to budget and to make the process as simple and easy as possible.

Why You Should Include Facebook Ads In Your Marketing Campaign

Facebook is not the only social media network that offers paid advertising. Instagram, YouTube and Twitter also have paid ad options. Search engines such as Google through its Google AdWords similarly offer paid advertising for its users. However, it may be wise to prioritize Facebook Ads above everyone else.

Here are 5 reasons why you should include Facebook Ads in your marketing campaign:

1. Facebook Is Growing

There is no stopping Facebook’s growth. Whether it is the United States, Japan, Germany, Russia or Australia, the number of Facebook users will continue to grow exponentially over the next few years.

To capitalize on its growth, expect the company to introduce more options for advertising. Businesses will have more tools to reach their target market. For the year 2017 alone, Facebook launched the following advertising platforms:

  • Messenger Day
  • Instagram Stories
  • Facebook Live Video

In addition, Facebook improved its advertising report capabilities. It will be easier to track down the performance of your campaigns.

This means if you haven’t started on your Facebook Ads campaign, don’t worry! There’s no better time to include Facebook Ads in your digital marketing strategy than now.

click here to learn more about web design

2. Social Media Marketers Love Facebook

A 2016 survey by Social Fresh, Firebrand Group and Simply Measured revealed that 95.8% of 551 social media marketers identified Facebook as having the best ROI among social media networks.

Social media marketers are professionals and highly trained in what they do. They have run paid ad campaigns through various platforms and are convinced Facebook Ads generate the best results for B2C and B2B campaigns.

Many businesses report surpassing their marketing goals five-fold after running campaigns through Facebook Ads.

It doesn’t look like the trend will stop anytime now as advertising budgets have been increasing the last few years. Case in point, advertising budgets for social media marketing in the United States almost doubled from $16 Billion in 2014 to $32 Billion in 2016.

As the Facebook global community continues to grow, expect more businesses to include Facebook ads in their Digital Marketing program.

3. Runs Your Ads Through Multiple Platforms

When you sign up for Facebook Ads, your paid ad material will not run through its News Feed. Facebook will likewise run it through multiple platforms for maximum targeted visibility. Presently Facebook has five distribution channels for paid ads:

  • Facebook News Feed
  • Facebook Right Column (Home Page)
  • Messenger
  • Instagram
  • Audience Network

Facebook Messenger is the social network’s chat/ personal messaging system. It is popularly used via mobile phone although many PC desktop users find it a convenient way to communicate with their network.

Instagram is one of the biggest and most popular image-based social media network on the Internet. And Facebook bought it in 2012 for US $1 Billion! Instagram is a wonderful platform to use if your products and services are highly visual in nature. It is one of Facebook’s biggest generators of revenue.

Audience Network is a great tool for paid ad distribution. This is a feature in Facebook Ads which searches the Internet for apps and websites that match the demographics and online behaviour of your target audience.

Having these five platforms will make it easier to reach your target audience among Facebook’s 2 Billion strong community.

4. Positions Your Ad In Front Of Potential Customers

If you can target your ads to potential buyers, then market size will become a factor. In 2017, more than 1.6 billion people saw paid ads that were posted through Facebook’s Audience Network feature.

Now factor in the number of people who will see your paid ad in their Facebook News Feed, Homepage, Messenger and Instagram page. Again these are not just randomly selected people from the community. These are targeted users of Facebook who fit your buyer’s profile.

How does Facebook do this?

Facebook Ads has a Detailed Targeting feature. You have the option of publishing your ad to a new audience simply by choosing the “Exclude people who like my page” option.

However if you are launching a new product or service, it would be better to choose the “People who like my page” option as these people are already familiar with your business.

You also have the option of customizing the search parameters of your target audience. Facebook has a step-by-step guide which will take you through the entire process of creating an audience profile. Facebook will use the information to find the best, most ideal sites to place your paid ad.

5. Allows You To Stay Within Budget

Most businesses, especially small enterprises and startups are hindered by tight budgets from starting an advertising campaign.

As we discussed in our articles, “How to Set Up a Low Budget Digital Marketing Campaign” and “How to Launch a $100 Digital Marketing Campaign”, it is possible to succeed even with a restricted budget.

However the articles discussed organic search marketing strategies. Paid advertising as the term implies, carries a cost. However, with paid ads you only pay whenever someone clicks on your ad.

Therefore, if your ad gets seen by 1,000 people but only 10 click on it, you will only pay for the 10 clicks. With Facebook Ads, you don’t need a million dollar budget to get started.

Depending on the location of the ad, you can start driving people to your website for as little as $0.10 to $0.30 per click.

Here’s the breakdown of the Cost Per Click (CPC) by placement in Facebook Ads:

CPC chart based off ad placement

Chart courtesy of AdEspresso

As you can see, Instagram has the highest CPC. Still there are 5 million business profiles in Instagram. The volume alone should give you the confidence to have your paid ad campaign go through Facebook Ads.

Conclusion

Facebook Ads is a great platform to run your paid ad campaign. Because it has features that allow you to target your intended audience, you will be able to capitalize on Facebook’s massive 2 Billion community of users.

Your paid ad will also be posted in multiple sites that will enable more people to see it. Facebook’s 2012 acquisition of Instagram was a big winner for the company. Instagram has 800 million active monthly users and 300 million daily active users.

When embarking on a Digital Marketing campaign, it is a good idea to mix organic search marketing with paid advertising.

Organic search marketing will build your business reputation and visibility over the long term. Paid advertising will drive inbound traffic to your website immediately and help your business gain traction right away.

This way while you are developing markets and an audience for your business, paid advertising through Facebook Ads can help you find potential end users who may have immediate need for your products and services.

If we got you interested in starting out a Facebook Ads campaign, please do not hesitate to give us a call or send us an email. We will get back to you right away.

Remember, now is the best time to start your Facebook Ads campaign as the social media network is still growing!

want to know more about web design

 

We are pleased to announce we just unveiled our new website! We figured it was time for us to update our site to showcase the quality of work we can do! We will be unveiling even more products and services in the coming weeks.

 

Stay tuned for more information.

 

-Your Mountaintop Web Design Team