Monday, January 16, 2012

Channel Marketing

“Horizontal, vertical or multi - your clients want it. Are you giving it to them?”

Regardless of the type of business you manage, you are already using some form of marketing channel. The question is, “are you doing it as effectively and profitably as possible?”

What is a channel?
In the broadest sense, a marketing channel is a process for making a product or service available to a specific group of potential customers. A channel can be simple or complex. It can be organized in a horizontal, vertical, or a combination. If you are providing your services directly to clients you are operating the simplest, and most common, channel - a direct-marketing channel. You may not feel the need for more ways to reach your clients. But they may need more ways to reach you! The two most common channel arrangements are known as horizontal and vertical.

Horizontal marketing channels
Horizontal channels are formed when two or more unrelated providers put their resources together to capture a market opportunity. An example of horizontal channel marketing is H&R Block offering tax preparation inside department stores such as Sears, Roebuck & Co. Another might be a software developer and an accounting firm teaming up to provide custom products for clients that neither could provide alone.

Vertical marketing channels
Vertical channels exist when members in a marketing channel cooperate to maximize the gain of the entire channel rather than just their portion of it. One H&R Block channel uses offices to extend its customer base at lowered costs. In fact, of Block’s 8,923 offices, 45% were operated by franchisees.

How do you decide on a channel strategy?
You can use as many channels as possible to reach clients. But beware. A trap that many firms fall into is when a firm tries to be, “Everything to Everyone Everywhere.” Don’t try to provide the same level-of-service options through every channel. Instead first assess your client’s needs and adopt only those channels and services that provide value to clients, complement each other, and contribute to profitability. A service firm may develop a channel strategy where one channel is used to deliver the service (in person tax preparation or other services), another channel to dispense general advice and information (on-line contact information, tax organizers, forms, deduction guidelines or product reviews) and yet another to offer customers general and/or specific advice and information (telephone).

The Internet as a Channel
Today innovations in technology and the Internet are allowing large and small businesses to evolve from static “bricks and mortar” operations to dynamic “bricks and clicks” enterprises. One of the most important considerations in utilizing the internet as a key component of a channel strategy is that consumers, empowered by richer and greater amounts of information accessible online, increasingly drive and control the exchange process. This demands greater focus on resources and support for the development of this channel strategy, responding to its more fluid nature

How do you decide which channel is best?
Given the number of marketing channel options, how do you decide which is best for your practice? In Marketing Management, Philip Kotler suggests three channel evaluation criteria.

Economic – Each channel type will produce different sales results for different costs. As a result, some channels will provide a higher return on investment for a low volume of sales and other channels will provide a higher return on investment for a high volume of sales.
Control – With an in-house sales force there is more control over skills, training, and marketing approach than with a contract sales force.
Adaptive – In periods where the marketing environment changes rapidly, marketing channels must be able to adapt equally rapidly to these conditions. Compare the adaptive ability of the content on a web page to that in a brochure.

Conclusion
Marketing channels are an important part of any marketing plan. However, the appropriate channel type and combination of channels for your practice depends on your clients’ needs, your objectives for the channel, and the resources you make available to manage these channels.

Friday, January 6, 2012

Challenging …. a Client

Many of us have experienced a challenging relationship - as client or supplier. I will address the issue from the supplier side but I am sure each of us has experienced both sides of the relationship at one time or another!

We are invited to develop marketing or advertising materials and as such we undertake a thorough and professionals review of the company we are trying to help. We spend time researching products, services, customers, company culture, etc., and we then present creative ideas or marketing programs that respond to the needs identified by the client.

Ultimately the client simply disregards what we have presented and decides arbitrarily how they want to proceed. The client, in their position of authority as the payee on the project decides that they will forge their own creative or the details of the marketing program, regardless of the logic presented.

It happens a great deal and the size of the company or the project has little to do with it. Left brain people tend to be those in charge of companies or organization because of their business acumen and linear reasoning skills. Marketing and advertising tend to use a more creative lateral thinking process and as result make more use of right brain thinking.

Challenging a client to move beyond linear reasoning and understand the need to tap into the emotions of their customers is an important part of the success in a creative project. Convincing clients that they need to look at their products, not from their own needs, but from those of their clients is one of the most difficult demands of a marketing project if it is to be successful. I would take the time here to define success as not just getting paid for the project. Success for marketing or advertising must be defined by the success the client realizes through sales and customer awareness.

If you are defining your success on any project based by getting paid by the client then you are not truly a marketing or advertising professional. You have to be prepared to walk away from a client – to stand behind your convictions, your research and creative intuition, if you and your client are to be successful in any marketing initiative.

Walking away from a client or standing firm on an idea based on sound logic will result in one of two things – losing the client or gaining the trust of the client. Let’s take a quick look at “losing the client”. I would suggest that losing a client who seeks to implement their ideas of marketing on a project, to the detriment of the project are often clients who are more concerned about cost and the certainty of their own perceptions in marketing. Typically the relationship with this kind of client thinking is short and there is little opportunity for a relationship to grow beyond this current project. Often you will spend more time and effort satisfying this kind of thinking with poor results. “Gaining Trust” based on mutual respect has many positive benefits in terms of a longer term relationships, repeat business and the success of the project - not to mention the satisfaction you feel when your ideas prove to make your client more successful.

When is it time to stand up and be counted? Well that all depends on the preparation you have undertaken to ensure that your ideas are sound and the client understands the ideas and the research that supports those ideas. Working with clients that want to work with you based on a mutual respect of roles and knowledge is the key to a successful relationship and a successful project.