3 Must-Follow Phases To Pick The Right Sales Channel Strategy Using Competitive Intelligence

The identification and prioritization of appropriate sales channels are critical to the business development function of any organization. The sales channel strategy can make or break your business. To successfully identify the ideal sales channels for their business, organizations require quality intelligence on their market and competitive landscape.

Doing so helps organizations:

• Get a better understanding of their competitors and their target market
• Plan out and develop their complete sales process
• Identify a competitive advantage

In this article, we shall have a look at the optimal approach to using market and competitive intelligence to develop your sales channel strategy.

 

Phase #1 in picking a sales channel strategy: Competitive Intelligence

The strategic advantage of conducting competitive intelligence before you begin developing your sales and distribution strategy is that it helps you emulate your competitors’ growth strategies. It also helps you recognize and avoid the mistakes they’ve made. It should ideally involve the following steps:

#1 – Competitor Screening

For starters, conduct research into your leading competitors in your market or domain across the regions you plan to target. The best way is to review, survey or interview your existing customers to ask them what alternatives they considered before deciding on your product or service. 

You could find some information by searching through your CRM and reaching out to customers who mentioned they were considering your competitor. Then, create a competitive benchmark analysis using a spreadsheet. Devote one row or column to each competitor that you’ve identified. On the other axis, list data points or categories of information you’d like to find out about each competitor. 

Don’t worry if you’re not sure what you should be looking for at this point. You can also always add more categories as you progress through your research.

#2 – Competitor Sales Process Assessment

Once you’ve identified your direct competitors (at least 3 to 5), you need to then do some research on their key sales process strategy and business models. Your research should include your competitors’:

1. Sales team
2. Sales play
3. Targeted geographies
4. Use-cases
5. Pricing
6. Buyer groups
7. Value proposition

Running a sales process assessment on your competitors can be a little tricky, but is doable. Most of this information is not directly available but has to be sourced using primary research. 

#3 – Competitor Sales Channel Mix Assessment

Of course, investigating your competitors’ sales channel mix is essential before you develop your own. Begin by reviewing different sales and distribution strategies used by your competitors to sell and market their solutions (organic, inorganic, direct). 

How are they selling their product/service? Do they have direct sales, resellers, or a multi-level channel? Notice what their sales structure looks like and how many members are in their sales team. 

For an organic sales structure: You may find LinkedIn the most useful – just go to their company’s LinkedIn page and “See all employees on LinkedIn”. Further, evaluate their sales channel strategy and explore the job responsibilities to understand more about their team structure. 

In addition, always review the competitors’ job postings, to review any of their hiring for new regions. Are they focusing on specific markets or hiring in new countries/regions? This will help you understand the geographic expansion plans of your competition (again, a new opportunity as a part of your GTM planning). 

For an inorganic sales process: You may even be able to find the information listed on their corporate website. Companies often also include authorized resellers or partner locators on their websites. If not, you might want to review their partnerships and alliances from the companies’ press releases or news. Such information is very helpful for you to explore the new sales channels through partners. 

#4 – Competitor Target User Groups and Use-cases Assessment

For your service/product offerings, there can be different use cases offered by your competitors, which are more successful. Review your competitors’ case studies, and offerings page from their website, and also the marketing channels (social media, emails).

As a next step, keep a list of different offerings, mapped with the use-cases, and problem statement (from an end customer perspective). This will help your sales team evaluate new sales target groups and test your offerings to meet those use cases. Across each of the use-case, highlight the potential buyer groups, which might differ from your existing target groups and personas. 

#5 – Competitor Pricing Mix 

Take a look at the competition’s pricing structure. Investigate their shipping fees and warranty options. You can also make observations about their subscription services – do they have monthly or annual options, or is it a one-time fee? How does their pricing compare to yours?

Then, observe the promotional aspect of their sales channel mix. Take a look at each element, from advertising to digital content and sales promotions. Check their social media, website, blog posts, and online advertising elements including print and PPC.

Pricing plays a very important role in the competitive market with limited value propositions with respect to the product or service. Often, you will find your potentials evaluating your competition and selecting them based on the pricing differentiation. 

To understand the pricing, besides the competitor pricing information, you must also review the pricing information from your lost customers, or from field intelligence gathered by your sales teams. 

Pricing has to be detailed with respect to the appropriate variables. For product offerings, this might vary depending upon the number of users, the number of access provided, etc.; or for others, it could be variable pricing based on the volume, consumption, hours, etc.

Read more: Pricing Mix Report as A Service by GreyRadius

Phase #2 in picking a sales channel strategy: Converting insights into action 

Once you’re satisfied with the competitive intelligence you’ve gathered, it is time to make it actionable across your internal sales channel mix for your sales and distribution strategy.

It is important to understand that your customers are the reason why your business is in existence. Therefore, the ultimate question that you should seek to answer when building a sales channel mix is “What do my customers need, and how can my organization fulfill those needs?”

Organic Sales Channels

Organic sales channels are those that are focused on generating leads for your business over time, without the intermediation of any third parties. The aim here is to sell your product/service directly to the target customer.

Organic sales channels allow an organization to establish relationships directly with the potential buyer of its product/service. It enables them to have real-time feedback from the customer, quickly solving any problems and improving customer experience.

Here’s how you go about developing organic sales channels for your organization’s sales channel strategy:

• Create a lead generation plan with the targeted leads, quota, and incentive structure for the sales and BD team
• Create an ROI assessment that includes the targeted users from organic, with the cost implications, revenues, profitability
• Explore the newly added use cases and buyer groups to define the new opportunities for your existing / refined offerings. 

A downside of organic sales channels is having to invest a high initial capital to create the infrastructures and logistics systems necessary for sales management, and of course, the sales, business development, and marketing teams. 

The absence of intermediaries makes geographic expansion difficult, which is why a mix of organic and inorganic sales channels is considered better. 

Inorganic Sales Channels

Inorganic sales channels are those that involve a third-party intermediary who helps you make the final sale to your customer. These could be partners, resellers, marketplaces, distributors, retailers, etc. 

As there’s not much sales management involved in inorganic sales channels (third parties usually have a distribution and logistics network available to guarantee the best possible sales service), the company can concentrate its efforts, financial or otherwise, on other essential activities. 

Here’s how you go about developing inorganic sales channels for your organization’s sales channel strategy:

• Rely on gathered competitive intelligence to find out the third parties that are selling your competitors’ products/services
• Identify other potential partners who would partner with you to remarket/distribute/ resell your products/services to their existing networks

Inorganic sales come with a cost, however. The company loses or sees its control over the distribution and sale of its products/services become limited, as well as having to give up part of its margins for the remuneration of the intermediaries. 

Phase #3 in picking a sales and distribution strategy: Reporting and Progress Tracking

The importance of reporting and progress tracking, when it comes to your sales channel strategy cannot be understated. Without regular sales reports or other methods of benchmarking or tracking the progress of your sales function, there’s essentially no way to know how you’re doing, and what you need to improve upon. 

The first step obviously is to invest in a good CRM solution. This will provide your sales, business development, and marketing teams to centralize all of their metrics and run detailed analytics. This will in turn help increase efficiency and productivity, manage communications with prospects/leads/customers/clients more effectively, and streamline internal communications, among many other benefits. Most CRMs will also let you generate Sales reports.

Picking the right sales channel strategy – Conclusion

In a time characterized by strong and rapid social and technological changes and uncertainties from an economic point of view, it is wise not to set up your sales strategies based only on a business development idea, experience, or intuition. Market and competitive intelligence should be a requisite before formulating strategies, and not just a “good-to-have”. Leveraging market and competitive intelligence lets organizations understand their market and competitive landscape, isolate new channels and routes to market, create new ideas to serve customers better, and make informed decisions in business in general. 

Conducting market and competitive intelligence on your own with a dedicated M&CI team is the best way to go, no doubt. However, leveraging third-party M&CI solutions providers can help save up the cost of investing in a dedicated team, while getting the expertise and experience of professionals who’ve been doing it for years.   

Hopefully, this article will help you craft an effective sales channel strategy for your organization.

 

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About the author, Chirag Bansal:

Chirag is an entrepreneur at heart and loves using storytelling to convey his ideas, both professionally and personally. Born and brought up in Delhi, India, he launched Examformula (an ed-tech platform) and eventually sold it to one of the largest ed-tech players in India. Professionally, he has 15 years of experience across market research, market intelligence, and competitive intelligence for sales, strategy, and knowledge management functions. When not working, you can catch Chirag reading books or creating Instagram reels with his two daughters – Iqra and Noah.