What Is Channel Marketing? Everything You Need to Know

Even the biggest, most well-known brands rely on their channel partners to stay in business.

That’s why it’s vital to have a strong channel marketing strategy in place.

Otherwise, you miss the crucial link between your brand and local consumers.

But what exactly is channel marketing? And what should an effective channel marketing strategy include?

Here’s everything you need to know about channel marketing and how to leverage it to drive results.

What is channel marketing?

Channel marketing is when a brand distributes its products and services to customers through local businesses rather than selling to consumers directly. This is known as a business-to-business-to-consumer (B2B2C) model.

The intermediary businesses responsible for marketing and selling on the brand’s behalf are often referred to as channel partners or affiliates and can include:

• Retailers
• Distributors
• Reps
• Franchisees
• Resellers
• Consultants
• Equipment and auto dealers
• Insurance and finance agents

Channel marketing is mutually beneficial to all involved parties — the brand gets access to their channel partners’ local customer base, while these businesses make money from selling the brand’s products or services.

Let’s look at a real-world example of channel marketing: Subaru is an automotive brand that sells its vehicles through local Subaru dealers (aka their channel partners). But in order for these auto dealerships to sell Subaru’s products, they also need to promote them. That’s where the marketing part of channel marketing comes in.

To sell brands’ products, channel partners must use marketing materials like digital ads and in-store signage to promote them.

Who uses channel marketing?

Brands across countless industries use channel marketing to sell products and services, such as:

• Manufacturing: Equipment manufacturers sell their products through local dealers. (Ex. Bobcat)
• Beverage alcohol: Suppliers produce alcoholic beverages, which are purchased by distributors who sell them to retailers. Then, these retailers sell the products to consumers. (Ex. Diageo)
• Financial services: Banks and financial services companies sell their services through local banks and agents. (Ex. Edward Jones)
• Insurance: Insurers sell their insurance plans to consumers through local insurance agents. (Ex. Allstate)
• Healthcare: Healthcare companies sell their services through local practices, providers, and hospitals. (Ex. UnitedHealth Group)
• Telecom: Telecommunications providers sell their devices through retailers. (Ex. AT&T)
• Consumer goods: Consumer goods brands produce food, clothing, furniture, pharmaceuticals, and electronics and sell them through retailers. (Ex. Clorox, Nestlé, Nike)
• Automotive: Vehicle manufacturers sell their products through local dealers. (Ex. Ford)

Benefits of channel marketing

Channel marketing offers many game-changing advantages for brands, including:

• Expanding reach: This marketing model expands your brand’s reach by tapping into your partners’ existing markets.
• Boosting sales: With greater reach comes more potential customers. Plus, your channel partners have as much incentive to sell your products as you do — and more marketing means more sales.
• Increasing brand exposure: By distributing your products across numerous locations, you increase brand awareness.
• Building trust: When you sell your products through reputable businesses, your brand benefits from association — customers are more likely to trust brands sold by businesses they trust.

The challenge of channel marketing

Though channel marketing is undoubtedly beneficial for brands, it’s not without its challenges. The biggest is this: Business owners are not marketers, yet they’re tasked with promoting your brand to local consumers.

Common issues that stem from this lack of marketing knowledge include low-quality creative, noncompliant assets, investment in the wrong channels, and minimal marketing altogether.

That’s why it’s crucial that your channel marketing strategy is positioned to combat these common pitfalls.

How to craft an effective channel marketing strategy

The hardest part of channel marketing is ensuring that your partners’ local marketing efforts move the needle. That’s why your strategy needs to focus on empowering your affiliates to market smarter, better, and more efficiently.

1. Offer marketing funds

Local affiliates don’t always have huge budgets, which means they may not invest as much in marketing as you’d hope. But when you expand their budgets with marketing funds, they can hit the ground running. Plus, you can use these dollars to incentivize your partners to invest in marketing tactics that actually move the needle.

Keep in mind there are numerous types of partner funds, so make sure to choose the ones that make the most sense for your brand and local affiliates.

When you implement marketing funds into your local marketing program, it’s crucial that these funds are easily accessible, rules are clear, and claims processes are fast and simple. Otherwise, your partners won’t bother using these dollars.

2. Provide pre-approved assets and templates

Naturally, you want every asset that promotes your brand to look visually appealing, professional, and on-brand — but affiliate-created materials don’t always turn out that way.

The key to ensuring every local campaign is up to your quality and branding standards? Provide your partners with pre-approved marketing assets they can easily implement into their campaigns. You can also offer customizable templates that allow your affiliates to get creative without coloring outside the lines of your brand guidelines.

3. Offer resources and support

It’s difficult to launch high-performing campaigns without a full understanding of marketing. You can help your affiliates boost their marketing expertise by providing them with resources to strengthen their knowledge and skills.

Consider offering online training and webinars or creating a library of educational videos, articles, and infographics. The more your partners’ marketing maturity grows, the better results you’ll see from their local marketing.

4. Respond to affiliates’ program needs

When crafting your channel partner program, it’s important to deliver on your affiliates’ wants and needs. That means providing them with the features and tactics they desire for their marketing programs. This shows your partners that you’re committed to their success, making them more likely to promote your brand.

According to The 2024 State of Local Marketing, the top channel marketing priorities for affiliates are fund matching, training and education, and dedicated support. Consider offering these features in your local marketing program to boost your partners’ program satisfaction, and, subsequently, their marketing.

5. Invest in channel marketing software

One of the best ways to unify your channel partner network is with a local marketing platform. This technology provides a single, centralized location for all your channel marketing tools, assets, and resources.

With a channel partner portal, you can ensure your partners can easily access everything they need to launch and track successful marketing campaigns, from compliant assets to fund management tools to performance analytics.

Elevate your channel marketing strategy

Managing and motivating your channel partners is no easy feat. At BrandMuscle, we’ve helped brands empower their local affiliates to amplify their marketing for over 20 years with our best-in-class solutions ecosystem.

Get in touch with one of our marketing experts to learn more.