Johnny is a British Library Partner and runs a monthly workshop there – Essential Business Finance. He’s offering SmallBizMatters readers the opportunity to bring a colleague to a workshop for free on 12 June or 17 July. Click here to claim your free place.
So many entrepreneurs spend most of their time thinking about their product without giving as much attention to who is going to buy it and how they will reach customers.
It’s essential when you’re running a business to be continuously looking at distribution channels. Many successful businesses have been created simply by exploiting a distribution channel that is unique or uncommon in their industry.
The Intuit example
Take Intuit, for example – I am currently reading a really interesting business book called Inside Intuit: How the Makers of Quicken Beat Microsoft and Revolutionized an Entire Industry. According to the book, in the early days of QuickBooks, back in the 80s, Intuit tried to reach customers using banks as a distribution channel but it wasn’t really working and retailers weren’t that interested in stocking QuickBooks before it became a big name.
Intuit decided to take out direct response adverts in the papers (which had not really been done before for software) and because they were selling directly, they were able to reduce the price and they effectively introduced a comparatively new way of selling software to consumers. It was a turning point for the company and now the product is available from retailers and banks in multiple countries, as well as directly.
There are lots of examples of companies selling lingerie on the internet but the difference that BlueBellaintroduced is that they started to sell through party planning. It’s not a new or radical channel but it’s a slightly different take on party planning and selling lingerie and it’s been incredibly successful – the business is now very fast-growing.
These are tangible examples of how introducing a different distribution method can have a big impact on your business.
Here are my two top tips:
- Brainstorm other companies you admire, even in other sectors, and see what they’re doing in terms of distribution – could you adapt ideas for your product?
- Constantly review your distribution channel and how you reach customers – getting customers is one of the highest business costs and if your customer acquisition costs are too high, the business model won’t work
To find out more about Johnny’s services, go to www.johnnymartin.co.uk. He also offers a number of useful resources for small businesses, including his Talk Money video which aims to ensure you won’t get caught out by the Dragons!
Can you think of any other innovative distribution examples?