Designing a distribution strategy for digital
by elerman, on Aug 25, 2018 9:17:21 AM
A Distribution Strategy is a company’s plan to get their products into the hands of their consumers. It’s usually about the distribution of physical products and can include channels like wholesalers, retailers, call centers, or sales solution companies. While the channels will change for digital products, many of the same principles can be applied to a digital distribution strategy as well.
Online distribution channels are vast and varied. A clear distribution strategy for digital products or services has to be in place for a company to reliably deliver to its customers. Below we’ll take a look at the elements of a digital distribution strategy, but first, let’s look at what makes it different than a traditional one.
What Makes a Distribution Strategy for Digital Different?
Traditional distribution strategies are hindered by factors like location and product procurement The logistics and reverse logistics of transporting physical products to retailers and resupplying them once the runout can be complicated, to say the least.
Digital products are different. While your company may have limited capacity due to server requirements or staffing, your inventory doesn’t need to be warehoused or taxed. This flexibility allows companies selling digital products or services the ability to scale their distribution strategy quickly and not miss out on opportunities due to supply bottlenecks.
The Essential Components of a Distribution Strategy
1. Audience: Before you can formulate a good distribution strategy you have to figure out where your customers are. There are tons of ways to find out this information. If you already have traffic to your site, then you should have a pretty clear understanding of what kind of customers you have. You can also use your customer personas to help you understand where your customers might be shopping.
2. Partners: If you haven’t created a list of your partners yet, now is the time. Distribution through partner channels is critical to an effective distribution strategy. A list of your digital partners is not limited to just companies who distribute for you. Your partner list will include any and all partnerships that facilitate the production, hosting, or marketing of your products/services.
3. Channels: After you understand who customers are and where they are, you can start to find the channels which will most efficiently distribute your products to them. It’s very likely that your audience doesn't exist solely in one channel. They could use one channel to find information, one to vet that information, and another to buy a product. Having a good map of your customer’s buying journey will help you to understand how to use each channel to support your distribution strategy correctly.
Distribution for Digital Products vs. Digital Services
Your distribution strategy will change based on what you are providing a digital product like an app, or a digital service like SaaS or IaaS.
Digital Product: The conceptual distribution strategy for a digital product is very similar to that of a physical one. Let’s say for example that you have a company that creates and sells apps designed to help people stay on top of their fitness.
You would first try to understand who your customer base is, in this case, individuals who are working to stay fit. Then you would take inventory of any partners you have, maybe a company who sells fitness equipment or a fitness website for example. Then you would look at what channels to use to reach your audience best. You can always use your partner network, but you should also explore all the channels that your audience might be using. In this case, a distributor would just allow their users the ability to download your app from their platform and collect a referral fee from you.
Digital Service: The distribution of a digital service differs because, in most cases, your website will be the primary place where prospects convert. The buying journey for a digital service can be much longer than that of a digital product. Your distribution network will be based more on referrals than direct conversions on a partner's site. This makes your landing pages a primary component of your distribution strategy and puts them at the bottom of your sales funnel. Your website and landing pages have to be structured in a way that promotes conversion. If you’re looking for some tips on how to improve your landing pages, check out this post Six tips to improve landing page experience.
While distribution strategies for digital products are different from that of physical ones, they do still share some similarities. It doesn’t matter if your products are digital or physical, the elements of their distribution remain the same. Your customers will dictate the best channels and partners. For more on what digital distribution looks like in a complete inbound strategy take a look at our guide: Inbound Marketing Guide For SaaS Companies.