Sales Channels & Walled Gardens

When you’re starting a business, you typically come up with an idea, find a customer and try to make a sale. Then you want to sell more, so you have two options, sell more to the same (first customer) or find other customers that are pretty similar to that first for new sales. You can make an extraordinary amount of sales running down the same lane going from one customer to the next but its time-consuming.

That’s where sales channels come into play. Think of a sales channel as similar to the channels on your TV; each one is a path to a different customer, ESPN is great for people who watch sports, AMC for people who watch movies and historically ABC for families. Our cable providers have hundreds of channels but don’t get overwhelmed. What you want to think about are different ways to connect with potential customers so that you can get your product or service to them and they can see it. Rather than advertising on every single channel, you would pick your primary customer and buy (win a sale) there. There used to be just a few of these paths, retail, wholesale, mail/order and online. Now every company it seems – to maximize per customer dollars – is trying to provide a bit of everything inside of their four virtual walls. Think about Amazon, Walmart, Overstock, TaskRabbit and others. You can buy nearly anything on those websites.

Duh, you say? Well if you’re looking to grow sales and don’t have the team support/capacity to chase every customer individually then think about how you can partner with these mega-vendors to get your products and services into their ecosystem and in front of their customers. The negotiations are going to be hard, these companies tend to have sharp elbows, and they will seek the best terms. They’re able to do that because of the value, not only do you get to borrow the credibility of the super, you get access to their infrastructure and their customers in exchange for lower margins, yes but also less of your own time.

Building a sales and marketing plan before knocking on doors is important, you need to understand the value to your business, the potential for new sales as well as sales cannibalization and margin erosion. You also need to be sure that you can deliver your products and services at volume if or when the sales take off, you do not want to over promise and under deliver on your first contract with these folks.  Give us a call and we can help.  We’ve have helped numerous businesses build or reshape their sales and marketing plans to deliver growth.  There are pitfalls with placing your products and services into these ‘walled gardens’ but it is the easiest way to rapidly and efficiently scale your company.

Also published on Medium.