What’s your Channel Sales Strategy?: Understanding the Types of Customer Relationship

The common goal of any channel distribution network is to increase profitability through the effective marketing and promotion of parent company products. In order to realize such goals, channel members must first share in a well-designed channel sales strategy. However, it is imperative that companies should understand the different types of customer relationships before anything else in order to design, create, and utilize a channel sales strategy effectively.

The first thing you have to do is to get to know your consumers and understand your relationship with them. This way, you can design a strategy that addresses their preference and needs more accurately which would in turn result in increased interest and patronage of your products. There are four types of customer relationships and they are business, partner, functional and tactical.

The business type is on a “per sale” basis, meaning a person simply purchases a product from a particular retailer because of personal preference, cheaper costs, convenience, and so on. In other words, there is little interest for both sides to maintain or nurture the relationship. For example, a customer buys bread from one bake shop because its products are tasty and priced reasonably. If the bake shop suddenly shuts down one, the customer will think little of it and would simply move on and buy bread somewhere else.

The partner type of connection is significantly deeper and involves a certain degree of trust. Usually for this type, the customer is in need of the seller’s expert knowledge and opinion regarding a particular service or product. Confident of the seller’s integrity and genuine desire to assist, the consumer will ask the seller questions and would depend on what he or she will say in order to make important decisions. For example, a salesman sells the best food supplements in town, and he knows a lot about which products are of the highest quality. A certain fitness center continues to buy from and depend on him to provide them with best and most effective supplements for their clients.

The functional type on the other hand is an ongoing, developing relationship. The customer habitually purchases a particular product from the seller because it has always worked well or met his or her needs effectively. Moreover, if he or she continues to patronize that quality product, costs decrease substantially because as proven by experience, there is a guarantee that it will not fail. For example, you continue to buy a particular brand of anti-dandruff shampoo from this grocery store because it was the only brand that worked for you. Also, that store is the one nearest to your house. If that grocery store suddenly stops stocking up on your favorite brand of shampoo, you will feel highly inconvenienced.

Tactical is the last type. For this relationship, both parties are willing to invest in time and financial resources so that they will make more profit. For example, Chocolatier A provides Bakery A with the dark chocolate bars it needs to create the best chocolate cake in town. A tastier and richer dark chocolate results in a more mouthwatering cake. Chocolatier A and Bakery A would therefore exert a lot of effort to improve the quality of their products. If Bakery A sells a lot of chocolate cakes, then this means Chocolatier A sells a lot of dark chocolate bars. This success will bring both sides closer together and develop into a well-managed, ongoing strategic partnership.