What the CEO in SME company should know about sales channels to make them profitable?

Sales channels are one of key building blocks in every company’s business model. They give access to company’s offer, they deliver value promised in the offer and they assist clients in their buying process. Mismatched channels can however generate excessive costs or even restrain our sales.

In my recent article about value offer I was referring to a typical situation when a sales representative comes to his boss and asks for his approval to lower price in the offer in order to manage client’s objections and move sales. I have pointed out that the reasons for the slowdown in our sales may lie outside the pricing. The lack of proper segmentation and value offer are often the reasons why our sales decline, but drop of sales can equally be caused by wrong choice of sales channels and lack of adequate competences of sales staff in those channels.

The sales channel’s job is to give access to company’s offer in the most effective way to a potential client.

The optimal sales channel allows us to reach our target client at lowest possible cost and at a scale and paste which is necessary to meet our business objectives.

Let us come back to my example of a CRM producer, which I have analysed in my arcticle about value offer. Let us assume that we have decided to produce a solution for small B2B companies. What will be the best sales channel to reach them and to sell our offer?

Let us first look at our client and his buying process. In a small B2B company the buyer will probably be the owner himself, or his IT and administration manager and the decision will be made jointly. They already see the need to collect data about their clients and to standardise their sales team’w sork. They are a small company so they carefully manage their budget – they will first collect information about possible options and providers before they make the choice.

Assuming that we have limited resources, what is the optimal way to reach those client?

What we need is the reach and speed to market that will enable us to satisfy our business objectives while keeping our costs under control. 

Small B2B companies don’t need complex offer and more and more of them actively uses internet in their buying process. So the first stage of our sales process – searching for potential clients – can be carried out, at least partially, by digital marketing, which will move prospects to our www site.

A compelling value offer presentation in our communication and on our site and good conversion mechanism will then help us to collect leads to be followed up by our sales force. One could assume that since we have a relatively simple offer, we don’t need advanced sales skills in our sales channels.

What’s wrong with this assumption?

Let us bear in mind that we deal with small companies, which usually try to shop very smartly and are afraid to waste their money. In such circumstances, despite the awareness of their need, thay may postpone the buying decision, because they fear lost money. They are not “an easy buyer”. When such client meets a sales representative, he looks for a credible expert, able to answer all his questions and address his doubts and objections. Such client will look for an expert who will help him in the most friendly way to make the right choice. If at that point in the sales proces we will involve sales people trained to sell simple products rather than advanced services and solutions – we may lose some of our leads.

The company owner may object at that moment – how come can we talk about keeping profitability if we want to give the task of selling a relatively simple offer (i.e. with a relatively low margin) to a highly paid sales staff. Such a sale will imply high fixed costs relatively to low unit price of our service.

Not necessarily. It will depend on the type of channels that we choose at different stages of the sales process. At the beginning of our funnel we usually want to generate wide reach to as many prospects as possible and we can achieve this by an adequate combination of digital marketing and partner channel, providing us with scale and speed. The skilfull usage of digital marketing means better cost control without the necessity to involve our expensive sales people.

The key to keep the profitability of the rest of our sales process will be the right lead qualification.

Our sales people should only work on leads with high probability of success. The precise definition of qualified lead gives us the lever to control costs in our own sales channel and to protect our margin.

Finishing my short deliberations about sales channels I would like to emphasise that each sales channel has it’s advantages and disadvantages, and the choice of the channel should be aligned with the specifics of our business model, client segments and value proposition.

There isn’t probably one solution fitting all situations. It is, however, important to analyse both benefits and costs of selecting a given channel. Such analysis should include knowledge about our client’s buying process, about the type of the offer which we want to sell and level of sales skills required to successfully sell such an offer.

If our sales slows down, then while auditing our sales channels we should verify not only their reach in our target group, but also the type of offer and sales competences we have placed in those channels.


About the author of the article:

Agnieszka Węglarz is an independent consultant, business strategist and practitioner in B2B as well as lecturer, speaker and blogger. She has over 20 years of professional experience working as a manager in both large corporations and SMEs, where she was responsible for strategy, marketing and business development. She worked for many renown Polish and international brands in telco, IT, finance, food and beverages sectors, as well as in FMCG and media . Her area of expertise is business development in B2B, she works mainly with SME companies.

She uses her long term executive experience and training expertise to assist companies and their managers in building their business development strategy through series of workshops. She specializes in business modelling, segmentation, value proposition, sales and marketing strategies and consultative selling.

She runs a business blog on www.agnieszkaweglarz.com and her own YouTube channel – Biznes Ring by Agnieszka Węglarz. You can contact her by writing to: agnieszka.weglarz@g2m.biz.pl or by directly sending a message via LinkedIN.