What Are the Different Distribution Channels in a Service Business?

by Sam Ashe-Edmunds; Updated September 26, 2017
Pile of colorful magazines on a table

Business distribution channels are the avenues a business uses to sell or deliver its product or service. Distribution channels for sellers of products include brick-and-mortar stores, online stores, direct mail solicitations, catalogs, sales reps, wholesalers, distributors and direct response advertising. Service providers don’t offer something a consumer can touch, feel and put in a bag, so if you're selling a service, you must figure out additional ways to deliver it.

On-Site Consulting

One way to distribute your services is by providing on-site work. For example, a human resources consultant might spend time at the headquarters of a client, meeting with staff members. The consultant would use the same software the employees use; examine the company’s HR policy guide; observe how staff members interact; review the company’s recruiting, retention and succession strategies; look at legal compliance issues; and review the company’s benefits. The consultant would deliver his findings and make recommendations at a meeting of the executive or directors who hired him.

Virtual Delivery

Expand your ability to distribute your services by offering virtual service. The HR consultant in the example would interact with clients via phone, email, online surveys, teleconferences and cloud-based project software. In some cases, consultants who work virtually travel for an initial meeting with clients, then work on the project off site and deliver written recommendations and reports. Thanks to the Internet, many freelance writers and graphic artists do all of their work remotely. Nonprofit association managers also run trade associations from their home offices or a multi-client headquarters that services multiple associations across a state or country.

Third-Party Consulting

You could distribute your services by working for another service provider who does the marketing and legwork of finding clients. In this situation, you might get hired by XYZ Consulting, which has ABC Widgets as a client. You perform work for ABC Widgets, but you receive your instructions and pay from XYZ Consulting. In this type of arrangement, you often sign a noncompete clause, agreeing not to work directly for ABC Widgets in the future. This prevents service providers from cutting out the companies that find clients for them.

Workshops and Seminars

Some service providers conduct workshops and seminars, charging multiple companies a lower price for general information, rather than charging one client a higher price for information specific to her business. For example, an HR consultant might offer a seminar on employee benefit planning for small-business owners. This type of seminar can make a profit for the service provider or lead to client engagements. Some service providers offer free workshops so they have the opportunity to showcase their services to targeted customer groups.

Publications

Generate additional revenue by delivering some of your services via a print or online newsletter, blog, book or website. You might offer a newsletter as an added-value benefit to paying customers so you can keep your business in front of them between engagements. A motivational speaker might publish a book. A customer service consultant can publish a training workbook or offer a library of password-protected materials at her website for a client's customer service representatives.

Bookers/Referrals

Not every service provider enjoys marketing or is even capable of finding business. Professional speakers often use bookers, who are individuals or companies that find work for speakers, taking a commission for each engagement booked. Wedding and party planners rely on referrals from the industry professionals they work with. Planners agree to cross-promote services with photographers, caterers, DJs, dressmakers, limo companies and cake makers. Pet sitters work with groomers, vets, shelters and pet stores. Offer clients a discount on future services or a commission on each lead they send you that turns into an engagement.

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

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