Channel success is essential for any SaaS company looking to grow its business. However, building a successful channel is not easy. There are a number of factors that need to be taken into account to build a successful channel, from identifying the right partners to aligning incentives.

In this article, we’ll take a look at five key steps that any SaaS company can take to build a successful channel. We’ll also provide some practical tips on how to implement each of these steps.

Define your channel strategy

The first step is to define your channel strategy. This should be aligned with your overall business goals and should take into account your target market, your value proposition, and your go-to-market strategy.

If you are new to channel building, we recommend starting with a direct sales model. Once you have a better understanding of your market and your value proposition, you can then start to consider other channel models, such as indirect or hybrid models.

A direct sales model is the simplest and most straightforward way to build a channel. In this model, you partner with companies that have a direct relationship with your target market. These companies can then resell your product or service to their customers.

An indirect sales model is more complex. In this model, you partner with companies that don’t have a direct relationship with your target market, for example distributors and value-added-resellers (VARs). These companies can then promote and sell your product or service to their own channel.

A hybrid model is a combination of the direct and indirect models. In this model, you partner with companies that have a direct relationship with your target market, as well as with companies that don’t have a direct relationship with your target market. This model provides the most exposure and reach but can be more complex to manage.

Identify the right partners

The next step is to identify the right partners for your channel. This includes assessing their capabilities, their reach, and their alignment with your business goals.

Partners should be enthusiastic about your product or service and should have a good understanding of your target market. They should also have a proven track record in selling and promoting similar products or services.

In addition, partners should have a strong reach into your target market. This could be through their own customer base, their own channel, or their own network of contacts.

Finally, partners should be aligned with your business goals. This means that they should be motivated to drive growth and success.

Align incentives

Once you’ve identified the right partners, the next step to build a successful channel is to align incentives. This means ensuring that both you and your partners are motivated to drive growth and success.

Common incentives for a SaaS channel include:

• Revenue share: Partners receive a percentage of the revenue generated from the sale of your product or service.
• Margin share: Partners receive a percentage of the margin generated from the sale of your product or service.
• Volume discount: Partners receive a discount on the purchase of your product or service based on the volume of sales.
• Lead generation fee: Partners receive a fee for generating leads that result in a sale.
• Marketing fee: Partners receive a fee for promoting your product or service. Marketing development funds, or MDFs, can also be used to incentivize partners.

MDFs are funds that are used to support marketing activities, such as lead generation, events, and co-marketing. MDFs are typically provided by the vendor and are used to reimburse the partner for their marketing expenses.

Enable your partners

The fourth step to build a successful channel is to enable your partners. This includes providing them with the training, resources, and support they need to be successful.

Enablement can appear in many forms, such as:

• Sales training: Sales training helps partners to understand your product or service and how to sell it effectively.
• Technical training: Technical training helps partners to understand your product or service and how to configure it for their customers.
• Marketing resources: Marketing resources, such as website banners and email templates, help partners to promote your product or service.
• Priority Support: Support helps partners to resolve any issues they may have.

When it comes to training, it’s important to keep it fun and exciting. The best way to do this is to create a learning path that partners can follow at their own pace. This could include e-learning modules, instructor-led training, and certification programs.

When it comes to marketing resources, it’s important to make them easy to use and easy to find. The best way to do this is to create a central repository, such as a partner portal, where partners can access all the resources they need.

Measure and optimize

The final step is to measure and optimize your channel. This means setting KPIs and tracking progress against them. It also means continually assessing and adjusting your strategy to ensure that you’re getting the most out of your channel.

This should not be confused with minimums and maximums, KPIs should always be reviewed and updated according to how your business is developing. Enforcing minimum partner requirements in the beginning of your channel strategy may strangle growth.

KPIs should be fair, achievable and relevant to both you and your partners. Some common KPIs for a SaaS channel include:

• Revenue: The total revenue generated by the channel.
• Margin: The total margin generated by the channel.
• Volume: The total volume of sales generated by the channel.
• Lead generation: The total number of leads generated by the channel.
• Win rate: The percentage of channel leads that result in a sale.

Conclusion

Building a successful SaaS sales channel can be a daunting task. However, by following the five steps outlined in this article, you can increase your chances of success.

If you’re ever in doubt of how to build a new sales channel, consider Hartmann Industries’ Channel Consulting Services. We offer a range of services to help build a successful channel, from channel strategy development to channel management.