Picking the right channel strategy for your business is a critical success factor. And that would be the approach for marketing, for selling and for customer support. We’ll walk through some of the options to think about so that you can document your assumptions, your hypotheses around your channel strategy so you can go test it with customers and increase the likelihood that you’re going to pick the right strategy for your business. Hi, I’m Steve Morse and I use this startup SOS channel to provide practical how to advice for first time entrepreneurs. So the topic today is your channel strategy filling out your hypotheses in your canvas so that you can test them? We’re marching through the different segments of the canvas. We’ve covered value proposition, customer segment, customer relationship, and now we’re focused on the channel strategy. By channel we mean marketing, selling and supporting your customer. What do we mean by marketing? Well it’s how you create awareness and how you create leads that flow in to your sales process. Selling, on the other hand, is how you engage with customers to take them through a sales process that ultimately results in an order. And then finally, there’s customer support. Once you get the order, once they become a customer, what kind of support will they need – will they expect – in order to be successful with your product or service? Let’s start with marketing. There are a lot of different approaches that you could use to market your product and obviously you’ll want to test these with customers to pick the right approaches. Because a lot of marketing money gets wasted using approaches that frankly don’t work with customers. OK, so what are some of the options? While trade shows, is your market the kind of market where people go to trade shows to learn about your kind of product? Or maybe blogs, social media – do they learn about your kind of product that way. Or email marketing, obviously can be a very effective way of marketing. Advertising in general, whether it’s online or magazines, television, etc. magazine articles. Do they go to technical conferences, direct mail? A lot of different approaches to marketing. So document your hypotheses on what marketing approach will work in your market. Put that into your canvas under Channels. Next up, your sales hypothesis. Like Marketing, there are a lot of ways to sell and you may use a combination of sales strategies, certainly in different geographies. Some of the approaches to think about. Well, certainly there is using an e-commerce site or using a direct sales force that can be expensive, but for more expensive product, it can be a good fit. Using distributors which buy the product from you and then resell it to their customers or manufacturer’s rep, which typically is selling your product for a commission. Telesales – another approach where you have people working the phones, calling customers and doing sales on the phone. Original equipment manufacturers or OEMs is another approach. If you have a product that an OEM can take and integrate into their product under their product label, then that would be an OEM kind of arrangement. For consumer products sometimes brick and mortar retail is a good place to sell. Value added resellers is another approach. They buy your product and then add some additional value to it, some additional pieces and then sell that more complete solution for a targeted market to customers. For a software product, sometimes in app purchases can be a good approach for selling. And finally, there’s affiliate sales where you pay a commission to other companies who provide you with sales leads that lead to an order. So again, a lot of different approaches to sales. Question is, what do you believe are the approaches that are the best fit for your business. And then customer support. How will you provide support to customers to help them be successful after the sale? Maybe all you need is a Web site with some information, some documentation, and maybe that’s good enough. Or maybe people will need an online chat capability so they can get help from an expert when they have questions or perhaps they want phone support where they can actually call up a person and talk to somebody about how to use your product. Even higher touch than that would be onsite support, which again for some types of businesses on site support is the right thing. Obviously a more expensive option. And then another approach for a different approach is user groups and or forums where customers help each other – answer each other’s questions. And maybe people from your company hang out on the forums also to help answer questions and get feedback from customers. A few approaches that you can consider for support. There are certainly others to look at too. Question is what type of support is best for your business? From a financial model point of view, but also best in terms of what type of support your customers will need. Another good thing to keep in mind about your channel strategy is it’s perfectly rational to expect it to change over time. Early on, you may take a particular approach to marketing and selling and supporting that really doesn’t scale. That’s not practical in the long term. For example, guerrilla marketing things that you can do in your local market that just wouldn’t make sense to do nationally. Maybe use a direct sales approach even though your product is fairly inexpensive and normally direct sales wouldn’t make sense. But initially, direct sales can be a great way to learn to increase your learning process about how to sell because you’re getting direct feedback from customers in the sales process that can be very valuable. As you scale you’re going to adopt marketing and selling and support approaches that are more scalable, that are more affordable as you grow your business. But early on, you may choose a different approach. And of course, as you expand geographically, that’ll cause changes, too. I mean, for example, maybe you initially are selling in the US and then you start selling in international markets. Well, that very commonly requires a different channel strategy for sales support and even marketing. So that’s our summary of channel strategy. Action steps document in your canvas under the channel section how you will market, sell and support. In other words, what are your
hypotheses for those things? How will that happen at launch when you’re very focused on an initial market segment? And how do you expect those channel strategies to change as you scale and grow the business? And that’s our summary of how to fill out your channel hypotheses in your canvas. If this was helpful, please click the like button and share it with other entrepreneurs and leave a comment. If you have any feedback or questions and if you haven’t subscribed yet, please click that subscribe button down in the corner. And remember, we’re doing a whole series on the business model canvas walking through each segment. There’s a link right below me for that entire playlist, so do check that out. also. That’s it for now. Thank you very much for listening.