Direct sales might work if you’re selling Tupperware containers door-to-door, but not if you’re selling much heavier, bulkier Crockpot slow cookers. But what about selling SaaS solutions?
On the surface, selling SaaS solutions directly to your customers seems like a smart idea. For each direct transaction, you keep all the profits. However, it might not always work for you. When you take a closer look, direct sales contain several hidden costs—and some not-so-hidden costs—such as salaries and business management and operations expenses. With this in mind, imagine the expense of selling slow cookers directly to customers. The costs would ultimately weaken the bottom line.
The alternative is to sell your SaaS solutions indirectly through channel partners. By bringing in channel partners, you increase your opportunities to sell more solutions. As a result of your relationship, you share a portion of your revenue with your channel partners.
Some might argue that smaller firms prosper with direct sales, and larger organizations benefit more from channel sales. Before deciding which sales strategy to follow, take a closer look at the pros and cons of direct and channel partner sales.
Direct sales and channel partner sales have three revenue considerations:
Now let's break down the benefits and downsides of both sales strategies between channel partner sales and direct sales.
For SaaS sales, 48% of small-to-medium businesses (SMBs) involve channel partners in their technology buying decisions. To meet this trend, innovative vendors, like you, are actively investing in channel partners due to:
Working with partners gives you access to SMB buyers who include partners to influence their decisions.
Partner compensation is based on commission or margin. And growing an in-house sales team is more pricey than partner acquisition.
As you develop your GTM plan, consider working with partners to expand your consumer base. You can profit significantly from partners' by their:
In terms of revenue streams, you can:
Partners can deliver on both fronts, from expanding your geographic footprint to generating revenue. But some businesses don't believe they can rely on partners to represent their products correctly. Using channel sales effectively requires finding the right strategic partners. Without the appropriate partners, there's no assurance of profits. You must also manage and control partner sales processes, view pipelines, and predict revenue for a productive collaboration.
Using Zomentum PartnerAlign, you manage your partner programs, view your partners' sales activities, and shadow-assist deals to convert more end clients. Onboard, monitor, and manage relationships with a one-stop solution. Reap the full benefits of partnerships by finding the right partners, establishing partnership objectives, and setting up guidelines.
Boost revenue and scale your business faster with PartnerAlign. Apply to Join.