Channel sales, also known as indirect sales or partner sales, are sales facilitated through third parties instead of directly through a company’s sales team. These third parties may be agencies, influencers, or distributors. This is a common go-to-market strategy amongst B2B (business-to-business) software companies.
Channel sales is often a far more efficient system for driving revenue than direct sales, since the company doesn’t have to hire a sales team. Rather, the company only pays if and when partners make sales. Typically, partners are paid a cut of the sale, so it doesn’t require the same degree of overhead investment or risk as hiring and training an inside sales team.
That being said, to unlock maximum growth potential, many companies opt to use both direct and channel sales. Since partners will likely have access to different audiences than your sales team, it’s often worth investing in both. The programs are usually complementary as opposed to cannibalistic.
Example: Lavender Ltd. drove 30% of their revenue last year via channel sales, up from 20% the year before.
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Cost per Acquisition (CPA) is a key performance indicator (KPI) in B2B SaaS marketing that quantifies the average expense incurred for acquiring a lead or new paid customer. It calculates the total cost spent on marketing campaigns and divides it by the number of acquired customers or conversions. CPA helps businesses evaluate the efficiency and profitability of their marketing efforts in order to optimize strategies and maximize ROI.
Example: The finance team asked Marco to measure the cost per acquisition for his marketing campaign in order to measure the impact of it on the company's quarterly revenue.