Price Every Channel on What It Keeps
Channel strategy consulting that prices each route to market on contribution, then puts coverage, partner terms and investment where they earn the most.
- 01Clarity on Where We Can Create Value
- 02A Quantified Business Case
- 03A Practical Path to Implementation
Your Biggest Channel May Be Your Most Subsidised
Most businesses judge a sales channel by the revenue it reports. In practice, the channel that sells the most is often the one the others subsidise, because the cost of serving it never appears on the invoice.
Rebates, co-op funds, pre-sales design and claims admin sit in overheads. In a 2003 McKinsey pricing study of one company, 16.3 percentage points of revenue reductions never appeared on invoices, and the average pocket price was about half of list (McKinsey, 2003).
The businesses that grow through partners don’t push more volume through every route. They rethink which routes deserve it.
Price each channel on what it keeps, not what it bills, and the investment case changes.
What Is a Channel Strategy?
A channel strategy is the decision about which routes to market you sell through, what you pay each one, and where each one ends. Channel strategy consulting prices every route on contribution margin, then sets coverage, partner terms and conflict rules around that number.
B2B buyers now use an average of ten interaction channels, up from five in 2016 (McKinsey, 2024). More touchpoints mean more places for partner and direct sales to collide.
What Are the Different Sales Channels?
Ways to Fix a Channel Mix
Part of our sales and marketing consulting.
Channel Optimisation: What's Now Possible
A channel P&L every month, not every year.
Language models can now read rebate claims, warranty tickets and support emails and tag each to a partner. Metric: days to produce a monthly channel P&L, instead of a once-a-year spreadsheet. Next: partner terms reviewed on live contribution, not last year’s volume.
More partners, same channel team.
AI sales agents can answer routine partner pricing and product questions and check deal registration before a quote goes out, with pricing exceptions and deal-registration conflicts routed to a person. Metric: support hours per partner and quote turnaround. Next: a larger partner base without a larger channel team.
Illustrative Worked Example
Assumptions (illustrative only): a dealer channel billing $4m a year at 30% gross margin. Rebates, pre-sales support, co-op and callbacks cost 12 points, leaving 18% contribution ($720,000). Recover two points by tying rebates to contribution tiers and you add $80,000 a year with no new volume, and the channel P&L shows where to reinvest it.
Test your channel numbers with us. To take the follow-up and quoting admin out of the channel team, see AI sales automation.
The Point Isn't to Cut Your Channels. It's to Know Which Ones to Grow.
A channel P&L shows which routes earn and which are subsidised. That tells you where to recruit partners, where to put coverage and marketing spend, and which terms to change first. Recovered margin funds the growth.
- Margin recovered. Rebates, discount bands and co-op tied to contribution.
- Cost to serve. Pre-sales, support and claims admin per partner reduced.
- Growth redirected. Coverage, partner recruitment and marketing spend moved to routes that earn.
- Conflict avoided. Fewer disputed deals, lost partners and duplicated discounts.
- Partner capacity. A larger partner base supported without a larger channel team.
The Channel P&L Method
We price every route before we change any terms. The channel P&L becomes the baseline every later change, including automation, is measured against.
Step 1: Map the routes
We document every route, with volume, deal size and segment. Decision: which channels are in scope.
Step 2: Build the channel P&L
We attribute discounts, rebates, pre-sales, support, co-op and warranty cost to each channel. Decision: which channels earn and which are subsidised.
Step 3: Score the mix
We score each route on contribution, growth capacity and conflict risk. Decision: grow, fix or exit, route by route.
Step 4: Redesign terms and rules
Tiers, discount bands, deal registration and coverage, modelled on a year of real partner data. Decision: the terms you take to partners, and in what order.
Step 5: Govern and review
Each month we review partner scorecards and channel contribution with you. Decision: the next term, partner or route to fix. Where partner admin is the bottleneck, we can run it for you, with AI handling routine claims and queries and people reviewing every pricing decision. An AI Readiness Assessment shows which partner admin to automate.
Channel Sales Strategy Mistakes That Erode Margin
- Setting discounts by negotiation. Every concession leaks margin, and small leaks compound: a 1% price rise at stable volume lifts operating profit by about 8% (McKinsey, 2003). Band discounts from evidence.
- Treating partner support as overhead. Hidden cost: pre-sales design, training, co-op and callbacks booked to overheads. Attribute them, and a tail of loss-making partners often appears.
- Judging aggregators on cost per lead. Shared leads lower win rates and deepen discounts. Measure cost per contracted dollar.
- Going direct without rules. Partners shift effort to competing brands. Hidden cost: the rebate administration your team absorbs while terms are disputed. Set deal registration and segment boundaries first.
Partner Channel Strategy Problems We Solve
A dealer network growing volume but not margin
Tiering rebuilt on contribution.
Number it movesContribution per dealer tier.
A software company adding APAC resellers
An indirect sales strategy with margin and support terms set before signing.
Number it movesMargin after support cost per reseller.
A manufacturer launching online sales
Pricing and deal-registration rules that protect partners.
Number it movesPartner-disputed deals.
A new state or country
Distributor versus direct, alongside market entry.
Number it movesCost per contracted dollar by route.
Renewable energy
A battery wholesaler weighing its installer network against aggregator leads. See solar and battery installers.
Number it movesWin rate and discount depth by lead source.
Most Channel Reviews Fail Between the Recommendation and the Contribution Line
Your biggest channel may be your most subsidised. We bring three things together in one team: commercial judgement, practical execution and accountability for contribution.
Commercial judgement
We build a channel P&L that prices every route after discount and cost to serve.
DeliverableA channel P&L and a scored channel mix.
Practical execution
We redesign partner terms, rules and scorecards with you, then help put them in place.
DeliverableNew terms, rules and scorecards your team runs.
Performance accountability
We govern the mix with you and can run the partner operation behind it, so recovered margin is still there next year.
DeliverableA monthly channel P&L, not an annual one.
Four Ways Businesses Review Their Channels
What This Means in Practice
Contribution, not revenue
We price channels the way an owner does: after discount and cost to serve.
Built to implement
Terms, rules and scorecards your team runs, not a strategy deck.
We can run it, too
Where partner support, claims or deal-registration admin is the bottleneck, our integrated team can design, run and improve it.
Australia and APAC
Channel strategy for a new state or country, and for software companies adding APAC resellers.
Channel Strategy FAQs
01How do you develop a sales channel strategy?
You develop a sales channel strategy by pricing each route on contribution, then deciding which to grow, fix or exit. Map every route, attribute cost to serve, redesign partner terms and conflict rules, and review contribution monthly.
02How do you choose the right sales channel?
Choose the right sales channel by matching it to deal size, product complexity and the margin the sale can carry. Large technical deals usually suit direct sales; standard products suit partners or self-serve. Test each option on cost per contracted dollar before committing.
03How can businesses improve channel performance?
Businesses improve channel performance by measuring contribution per channel and partner, then acting on it. Tie rebates to performance, cut support for loss-making partners, enforce deal registration and fix where leads stall with conversion improvement.
04How long does a channel strategy engagement take?
A channel economics review takes four to six weeks. A full engagement runs six to ten weeks.
05How much does channel strategy consulting cost?
Most clients start with a fixed-fee channel economics review of four to six weeks. We quote the full engagement once the channel P&L shows what’s worth changing.
06Do you only advise, or do you implement?
Both. We price the routes and redesign the terms and rules with you, then your team runs them. Where partner admin is the bottleneck (rebate claims, deal registration, partner queries), we can run it for you, with AI handling routine work and people reviewing every pricing decision.
07Will changing terms damage our partner relationships?
Not if the change is modelled and phased. We model new terms on a year of real partner data, phase them in, and plan the partner communication before any term changes.
Still have a question? Ask us on a Discovery Call.
Book a Discovery CallFind Out Which Channels Actually Pay.
Bring your routes to market, partner terms and where you suspect margin leaks. On the first call we’ll tell you which route is most likely being subsidised and what it would take to prove it.
- 01Clarity on Where We Can Create Value
- 02A Quantified Business Case
- 03A Practical Path to Implementation
- A Focus on Your Commercial Opportunity
- A Confidential, No-Obligation Conversation
- We Reply Within One Business Day