Distribution Channel Marketing Strategy - Case Study (Starbucks)

what I'm going to share with you in today's video is one of the most powerful lessons I could ever pass on to you about building a successful business that makes a significant amount of money but please note this video has almost nothing to do with affiliate marketing or selling digital products those are the tools but today I'm going to give you something far more valuable a completely new way to look at your business most people think Starbucks is in the coffee business they're not coffee is their product but their business is actually distribution and real estate those stores represent Starbucks distribution channel television YouTube Facebook are distribution channels these are the mediums in which marketing messages flow and goods are sold to a participating audience so if Starbucks wants to sell more coffee they must expand their channel by opening more stores without those stores there is no business same with McDonald's same with Walmart all of these companies have figured out that their real business is their distribution channel through which goods and services are sold we need to remember that as well as it's the key to building a business that makes four hundred thousand dollars in a week instead of one that only makes four hundred dollars the miracle of building a business in the Internet age is that it allows a single person to build a massive global virtual distribution channel with nothing more than a laptop Cristina a full-time mom with two kids and has spent the past two years writing a few books on parenting tips for new mothers now that her books are done her primary goal has been to sell those books and bring in some revenue most people especially small business owners would agree with that logic you create a product or service and then you focus on selling it but there's a reason that the average annual revenue for a small business in the US is only forty four thousand dollars and there's a reason why it is not turned into millions she thinks her business is selling books that's not her books are a product but a product is never a business here's what I mean to demonstrate the difference between building a business where the primary focus is on selling books and building a business where the primary focus is on building a distribution channel Cristina could sell her book on amazon.com in the Kindle Store for nine dollars and 95 cents for every sale she makes a 70 percent profit or seven dollars per book in order to make seven thousand dollars per month she would have to find a way to sell 1,000 books per month for 33 books per day she doesn't get any of her customers information such as their name or email address so her only way to make money is to constantly sell books every single day she might be able to spend some of that seven dollars in profit on advertising but that will decrease her profits down to one dollar or $2 per book if she's lucky this is not a business and yet it's what tens of thousands of authors attempt to do each and every day now let's take another approach instead of focusing on book sales let's focus on building her distribution channel which in the case is a list of moms who subscribe to her free email newsletter by sending her readers valuable information via email on a regular basis Kristina can build a solid relationship with them she can become known liked and trusted for the value she provides this is called goodwill and goodwill is everything when it comes to the value of your distribution channel because if people know like and trust you they will buy from you on average an email subscriber to Christina's list will be worth one dollar per month in revenue if she maintains a high level of goodwill if she has a list of 5000 readers she should be able to make around five thousand dollars per month by promoting goods and services that would benefit our readers 20 thousand readers equals twenty thousand dollars per month and so forth over the course of a year that means each subscriber is worth 12 dollars this is possible because people tend to stay in your distribution channel and consume your products and services for as long as you continue to create goodwill so how can we use Christina's book to build your email list simple if each free email subscriber is worth at least $12 per year and her book customers are only worth $7 total then it makes a heck of a lot more sense to just give away the book for free in exchange for their email address with the addition of a second product that she can offer her new subscribers for $20 to $50 she will be able to afford to actively market her free book on Facebook's advertising platform and rapidly increase this of her list growth to one hundreds of new subscribers per day within the next 12 months she should have a list of around 100,000 subscribers which should produce around $100,000 per month in revenue any time she creates a new product for comes across someone else that she'd like to recommend she can do so just by sending out a single email but it gets significantly more interesting when you start to focus on turning those free email subscribers into actual customers their value goes from $12 per year to well over $100 to $1,000 so let me walk you through an actual real-world case study the great thing about building a distribution channel that generates revenue rather than a product that generates revenue is that you can leverage the amazing products and services that others have spent the time to create this is typically called affiliate marketing which was pioneered by amazon.com almost 20 years ago basically you can promote someone's product or service and get paid a commission for every sale if it's a digital product like an e-book or an online course that commission is typically going to be 50% so if the product costs $50 you'd make a $25 commission when it comes to promoting a product to your list as an affiliate there's two important rules you need to keep in mind one only promote products that you've personally bought and checked out for quality to only promote products because you believe they will provide a real tangible benefit to the people on your list not for money but because you know it will help them achieve their ultimate goal failure to follow these rules will result in the loss of goodwill and could even destroy it completely finally I included a photo with in the email to provide proof that I personally use the product this went a long way in readers minds to solidify the product's value and credibility anytime you can show photos or a video of your personal use do so it will likely increase your sales by at least 100 to 200 percent you

Channel: Leaders Talk

Views: 58,105

Rating: 4.947907 out of 5

Keywords: Distribution Channel Strategy, distribution channels in marketing, Tine Wade, Intellectual Indies, Dr. Vivek Bindra: Motivational Speaker, Basic Gyaan

Id: 80N8cBp2LvU

Length: 6min 34sec (394 seconds)

Published: Tue Mar 31 2020