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In the past several articles, we have discussed the steps to creating a marketing plan for your business and questions to ask: what problem you solve, what questions do you answer, and who are the people that you serve. In this article, I will cover the fourth question, and that is, “where do you do business?”

Where and how you operate is one of the key elements in creating a successful marketing strategy. Some refer to this stage as identifying the competition or developing a competitive analysis, but fully answering this question involves more than this.

Sales Channels

The first step in assessing where you do business is identifying your sales channels. A sales channel is:

“A way of bringing products or services to market so that they can be purchased by consumers. A sales channel can be direct if it involves a business selling directly to its customers, or it can be indirect if an intermediary such as a retailer or dealer is involved in selling the product to customers.[1]

Sales channels could include your brick and mortar store, your sales force, your website, resellers, or referral networks such as those that are common in the construction industry. A simple way of thinking about a sales channel is that it is the way your product or service gets to the buyer.

Let’s use an example with which many people are familiar . . . Girl Scout cookies. A Girl Scout troop and the individual Girl Scout has five sales channels to use in their promotional efforts: direct selling going door-to-door, selling through their social media profiles, selling through their online cookie sales page, and selling at cookie booths.

Looking at a restaurant as another example, the majority of their sales will very likely be through their brick and mortar location with customers walking in to dine. However, they might also have an online ordering and delivery service, which would be a second channel, and participate in services like GrubHub and UberEats as a third and fourth. Then they have a catering service promoted by a catering manager giving them a total of five channels.

Each of these sales channels may have different costs associated with them and the dynamics of the selling environment may be very different. Once you have identified the sales channels for each of your products and services, the next step is to analyze the sales environment for each of those sales channels.

Operating in Community

Every business operates in one or more communities. I like this definition of community, “a group of people living in the same place or having a particular characteristic in common.[2]” A community is not just a location, but a binding element among the group. Each of your sales channels will be operating within a unique community. For example, a brick and mortar store will be operating in a community defined by its physical location. A company that wholesales their product will be operating in a community defined by industry rather than solely geographic location (although location will likely also influence sales).

An online sales channel will operate in its own unique community . . . no one competes against the entirety of the internet. This community may be defined by a network of blogger or influencers. The online community in which a local business competes may be made up of feedback on online community forums for the local area, community websites, and reviews on Yelp, Google, and Facebook. When someone enters the digital counterpart to a geographic community, who are the players and where is the information found?

Competition

After you have identified each sales channel and defined each community for each channel, the next step is to identify and analyze the competition in each space. This may seem straightforward, but often competitors are overlooked.

Let’s look at a housecleaning service, which can’t be ordered online or fulfilled by a company out of the area. A housecleaner will be competing against other housecleaning businesses which will be listed in business directories, but they will also be competing against individuals who clean as a side gig, high school or college students cleaning houses as a summer job, and the largest group . . . homeowners who clean their homes themselves. When developing a marketing campaign, these different competitors require a different strategy.

When presenting the advantages of working with your business versus another housecleaning business, you might focus on your reputation, longevity in the community, and value (which is not always the same as price.) For those potential customers considering hiring a nonprofessional, you might stress your industry associations, experience, reliability ratings, as well as your bonding and insurance. A campaign targeted towards overwhelmed homeowners cleaning their own homes might focus on the ease and relief of hiring a professional.

Once you’ve identified your competition, look at their strengths and weaknesses. What is the makeup of the company, including its size, ownership, and management? What product or service do they offer and how does it compare to yours? What is the competitor’s reputation in the community and what partnerships or affiliations does that competitor have that affects the competitive space? Finally, what promotional strategies are they using and can you estimate their market share?

Identifying the opportunities

Now that you have thoroughly analyzed your sales channels, the community, and your competition, you should have both a feel for the competitive environment as well as some hard numbers. As you researched, what competitive opportunities surfaced? Is there a pocket of the market where you could focus? On the flip side, where are your own business’s areas of weakness and where do you need to improve?

This may seem like a lot of work to develop a marketing plan, but these are all questions that have to be answered to have an effective campaign. Do you begin to see how of these details play a role in developing a message that will speak to your potential customer or client? It does take time but it is important to go through.

If you would like to discuss implementing a marketing strategy for your business, schedule a free call online.


Notes

[1] “Sales Channel,” Business Dictionary, n.d., accessed February 18, 2019, http://www.businessdictionary.com/definition/sales-channel.html.

[2] “Community,” Oxford Living Dictionaries, n.d., accessed February 18, 2019, https://en.oxforddictionaries.com/definition/community.

In the case of a competitive environment, the group is made up of entities and organizations.

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