The sales force or other channels to the market?

# 54 September 2017

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When should you use a direct sales force and when should you choose other channels to the market? On one side, we find that successful companies have a clearly formulated channel strategy, which they revisit regularly. On the other side, we encounter companies stuck in their ways of doing business, in spite of dramatic changes in their market and in technology. For example when retaining a large direct sales force as their sole channel to the market, and missing out in new and more efficient ways in doing business.

There are a couple of factors dictating the most suitable channel option:

Figure. How customer size and phase in the sales process affect what channels to use is illustrated by the figure, above. A direct sales force is used under the dotted line, where its costs could be justified. Other, more cost efficient channels are used above the dotted line. Source: Zoltners, Sinha & Zoltners (2001).