Definition of Direct ChannelA means for establishing a direct relationship with customers to sell to them and deliver value to them.
Direct channels can be contrasted with indirect channels that reach the customer through a third-party such as a retail partner. The following are the common types of direct marketing channel.
Bidding for Contracts | Catalog Sales |
Company-Owned Retail | Conferences |
Dealerships | Direct Mail |
Direct Sales Force | Door-to-Door Sales |
Ecommerce | Email Marketing |
Event Booths | Foreign Subsidiaries |
Kiosks | Mobile Apps |
Outlets | Personal Selling |
Pop-Up Shops | Product Showrooms |
Shop in a Shop | Social Media Marketing |
Street Vendors | Subscription Services |
Team Selling | Telemarketing |
Trade Shows | Websites |
Advantages
There are several advantages to directly owning the relationship with the customer. For example, this allows you to provide a good customer experience such as loyalty programs that reward the customer for their continued business. The following are common advantages of direct channels.- Potentially higher margins.
- Owning the customer relationship.
- Control over the customer experience.
- Consistent branding and messaging.
- Obtaining customer data and better understanding the customer.
- Building customer loyalty.
- Launching products quickly without need to coordinate with other partners.
- Eliminates dependencies on partners.
- Reduced partner risk.
Disadvantages
Direct channels can be expensive and often require upfront investments that are difficult to scale or scale back. For example, consider the expense of launching your own retail shops as opposed to simply partnering with an existing retailer. The following are possible drawbacks of direct channels.- Higher upfront costs.
- Higher marketing costs.
- Limited reach.
- Difficult to scale.
- Difficult to access international markets.
- Complex operations.
- Risk of overextension.
Multi-channel Strategy
Most firms choose some sort of multi-channel strategy whereby they use several methods to reach the customer. These can all be direct channels such as having your own website, mobile app and shops. A multi-channel strategy can also include some mix of direct and indirect channels that leverage partners.Omnichannel Strategy
Omnichannel strategy is the practice of offering a unified experience across channels. For example, launching coupons that work both in-store and online. This traditionally requires direct channels but in theory you could also offer an omnichannel experience with a partner.Summary
Direct channels are methods for directly reaching customers to create and capture value. These have the advantage of giving you control over every aspect of marketing and the customer experience but are potentially difficult and expensive to scale.
