What Is Channel Management?

The term channel management is synonymous with marketing departments in companies. It refers to the techniques and strategies (referred to as channels) that companies use to meet the needs of their customers.

Managing these channels involves setting clear goals for implementing them in your sales and marketing plan. You can achieve this through insightsabm, which effectively solves marketing challenges and optimizes your channel management.

How Channel Management Works

A company’s main channels to sell its services or products are through intermediaries and partners. They include;

  • Vendors
  • Agents
  • Wholesale distributors
  • Retailers

A channel manager should ensure the partners have enough information on the company’s products. The managers can also give benefits to ensure that the intermediaries actively promote the business products and services.

Strategies Involved in Channel Management

A channel manager employs the following practices to implement an effective channel management system.

  • Channel Architecture – It involves the framework in which a product moves from the manufacturer to the wholesaler to the retailer to the customer.
  • Sales Management – It includes strategies to encourage customer engagement, such as promotional campaigns.
  • Channel Strategy – The plan that implements the channels for sales and distribution.
  • Relationship Management – Refers to your strategy for maintaining a good working relationship with partners. The relationship should mutually benefit both the company and the third-party partners. 
  • Channel Conflict – It involves the proper management and solving of conflicts arising from the channel architecture of the business.
  • Brand Experience – It’s how the company portrays its values to the customers that it is targeting.
  • Distribution – It involves the systems to deliver products efficiently and cost-effectively.
  • Revenue Management – It involves the techniques you implement to ensure maximum income through your available product inventory.

Steps to Take To Set up a Channel Management System

  • Research on different sources for partner recruitment – It involves making inquiries in the market through platforms like trade exhibitions on reputable partner distributors that will fit into your channel strategy.
  • Determining the criteria to select your intermediaries – In this step, prepare criteria that you’ll use to choose the partners with which the company will work. The following factors can guide you.
      1. Knowledge of the product
      2. Knowledge of the partner in a particular market
      3. How well the partner understands the customers
      4. The partner’s willingness to compete favorably with rival companies
      5. The reputation of the partner in the market
  • Selecting and recruiting intermediaries – Using the criteria for picking the partners, make careful selections of partners with whom the company can work.
  • Intermediaries management (Training, motivating, and assessment) – After selecting partners, you can familiarize them with the channel management system and the company’s brand image and voice. You can do so through the following ways;
    1. Training the partners on the companies products and services
    2. Motivating the partners through financial and non-financial ways to get more output in terms of customer engagement from them.
    3. Assessing the partners’ performance to gauge if they fit well in the channel management system.

Common Problems Faced in Channel Management

  1. Poor communication between companies and their distributors
  2. Delays in shipment and supplies
  3. Intermediaries portraying a poor brand image to clients and potential customers
  4. Competition from competitors when distributors sell competitor products. 

Why is Channel Management Important

Channel management is essential in a business because it ensures good relationships between the customers and the company. Effective channel management through third-party partners ensures client satisfaction.

Customers who are happy with a product or service increase company sales. Good channel management practices, therefore, ensure the success of a business in the long run.


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