By Mark Mitchell
June 17, 2010

When a company wants to increase sales they tend to first think of advertising as the solution. Unless the company is a retailer, selling directly to consumers, this may not be the best solution. To do advertising right is an expensive proposition mainly because of how many times your ad must appear to be effective. An ad that only appears once or twice will usually do little, but make you feel good about yourself.  Advertising is also becoming less effective because with so many competing forms from broadcast to outdoor to social media to podcasts, it’s difficult to reach the right audience.

For companies selling their products or services to, and through, someone else before it reaches the end user, there is usually a more effective solution than paid advertising. These companies should first map out how their product gets to the end user — the channels of distribution.

By outlining these channels, a company might find the path to stronger sales could be achieved by helping the channel promote and sell the product, or training the sales team or addressing a flaw with the product/service itself. Breaking down the channel and assessing each step along that path validates that the course of action which follows is developed to meet the business goals/objectives.

For example, a company selling grain boxes for use by farmers felt a slick brochure would help the sales team boost sales. After a channel assessment, the company learned farmers were very brand loyal when it came to the tractors they purchased. The company was producing the grain boxes in one color – red. Farmers who liked John Deer didn’t want to purchase a red grain box and those loyal to International Harvester (easily identified by its red color) didn’t want anything other than red. In this case, the manufacturer worked to provide grain boxes in colors that matched the most popular tractor brands. Sales jumped because dealers switched the “brand” of grain box they carried.

Assessing the channel is best accomplished by diagramming – creating a flow chart if you will – the path the product or service follows to get to the end consumer. In many cases, as the product moves through the channel it travels multiple paths, each one providing opportunities to strengthen or correct brand perception. The diagram should outline those directly involved as well as outside influencers, as both have the potential to help or hurt you.

Once the entities that make up the channel have been identified, it’s important to research each, working to understand the business, problems, concerns and/or issues. It’s also important to learn how each views the product category; how your product/service helps them make money/drive traffic; whether there are frustrations (with you, the product category or competitors); how could you better service them; whether the sales of your product/service are flat, growing or declining; who are their competitors; what’s the landscape for their overall business; what are their goals?

Keep in mind, it’s easy to assume that trade customers all sell your product/service with the intent to make a profit and grow. However, the path that each customer follows to that end goal could be very different and more involved than simply applying a markup. So it’s important to identify – by understanding and leveraging the channel – opportunities that support those varying objectives. The investment in dissecting and knowing the channel benefits you and your customers.

For example, you might make sales calls with your customer’s team or offer demonstrations of product in their place of business. You might make warranty claims or complaints easier for them to handle. You could work with them to feature your products in their advertising or sponsor a customer event.

The idea behind assessing the channel is to leverage those findings and outline an appropriate strategy rather than simply jumping to a tactic such as advertising. Knowing who needs to be communicated with and why is the key to sustained business growth. Channel assessment and channel marketing are tools that, when applied appropriately, could bring about big change and sustained growth more effectively than advertising alone.

Mark Mitchell leads Interrupt Marketing, an agency that works to make its clients more successful by assessing the client’s channel, pin pointing issues and developing strategies designed to increase sales by selling through those paths.