SaaS distribution channels: ensuring your product reaches its audience

Whether it is the charisma of inbound marketing, the range of outbound outreach, or the allure of app store marketplaces, understanding the dynamics of these SaaS distribution channels is cardinal to get your product to the right audience. Each channel, akin to a cog in a well-oiled machine, plays a pivotal role in propelling your SaaS software into the competitive market vista, ensuring it resonates with the right audience and carves a niche for itself.

What are SaaS distribution channels?

SaaS distribution channels are the various paths that your software product takes to reach your end-users. These channels can be broadly categorized into two types: direct and indirect. In a direct SaaS distribution model, the software vendor sells products directly to customers, often through their website, reaching them using marketing and networking strategies. On the other hand, an indirect SaaS distribution model involves distributing products through third-party resellers.

How is SaaS software distributed over direct channels?

Distributing SaaS software through direct channels signifies a direct engagement between the vendors and the customers, bypassing any intermediaries. This model is catalyzed by various methodologies, each encompassing unique strategies to reach, engage, and convert prospective users into loyal customers. The essence of direct SaaS distribution channels lies in its ability to forge a direct rapport with the audience, offering a transparent and unmediated avenue to showcase, sell, and support the software offering. This segment meticulously dissects the intricacies of various direct distribution channels, shedding light on their operational modalities and the strategic foresight required to leverage them effectively.

Inbound marketing

Inbound marketing for SaaS startups is a concept that focuses on attracting prospects to your company, engaging them with your content, and delighting them not only with a good product, but also excellent materials covering the topic of your expertise.

For example, Ahrefs, a well-known SEO toolset, has grown to $50 million ARR with only 50 employees, of which 10 were marketers and none were salespeople. It has demonstrated over 65% growth year-over-year by leveraging inbound marketing techniques such as SEO-oriented content, email marketing, and offering free tools to achieve significant growth. However, the content in your SaaS marketing channels can take many forms designed to be educational, entertaining, and welcomed, including:

• Blogs – a platform for sharing insightful expertise and industry knowledge, fostering a trust-building dialogue with prospective customers, 
• Social media posts – tailored snippets of value, intrigue, and engagement that pique interest and foster a community around your brand's ethos,
• Downloadable materials – a reservoir of actionable insights and useful tools, encapsulated in downloadable assets that extend value beyond the first interaction,
• Online events – interactive forums like free webinars and product academy courses, offering a deep dive into your product's utility and industry relevance, while fostering a learning community.

A good inbound marketing strategy, considered one of the most effective SaaS distribution channels, not only builds a strong brand but also creates a meaningful connection with the audience, cultivating interest and supporting steady, product-led growth for SaaS companies.

Outbound outreach

Outbound marketing is an attempt to reach the customer where they currently are instead of attracting them in. It includes tactics for the following B2B SaaS marketing channels:

• Cold email – a directed outreach strategy enabling rapid audience engagement, with measurable metrics on customer interaction and conversion.
• Cold call – a traditional yet potent tactic of direct communication, fostering a personal connection while gauging immediate customer response.
• Display advertising – visual storytelling coupled with targeted messaging, placed across digital landscapes to capture attention and provoke curiosity (Facebook Ads, Google Ads, TikTok Ads, etc.).
• Live event marketing – live engagements that foster a tangible brand experience, offering a platform for personal interaction and live product demonstrations.
• Traditional printed materials and ads – tangible touchpoints of brand messaging, offering a classical yet impactful brand recall and information dissemination.

While employing a balanced mix of outbound marketing strategies can significantly broaden your reach, using outbound marketing to reach new SaaS distribution channels can be costly and hard to measure.

Events and meetups

Events and local meetups are a great way to forge real-world connections, network and showcase your SaaS product. Some of the top conferences and events that can become your Saas distribution channels include:

• Gartner Tech Growth & Innovation Conference – the last edition of this conference took place on June 14 – 15, 2023 in San Diego, CA. It covered new trends, approaches, and innovative technologies needed to optimize sales and marketing efforts.
• INBOUND 2023 – annual event organized by HubSpot welcomes 11,000 business leaders offering a great SaaS distribution channel, as well as an outstanding networking experience.
• TechCrunch Disrupt – the conference took place on September 19-21, 2023, and offers not only top industry speeches and discussions, but also Startup Battlefield where 20 selected startups have an opportunity to pitch their companies.
• Mind The Product – conferences in San Francisco (June 14, 2023) and London (October 20, 2023) with attendees from all over the world that can be attended in-person and online.

Engaging in events and meetups not only amplifies visibility but also lays the foundation for enduring professional relationships, carving a niche for your SaaS product, and creates possibilities to showcase your offerings on a stage that resonates with innovation, fostering a conduit for growth and visibility in the competitive marketplace.

Paid advertising

Paid advertising is one of the most effective ways to reach your target audience and generate leads for your SaaS. The cost of placing paid ads for global reach can vary greatly depending on:

• The platform – different platforms like Google Ads, Facebook Ads, and LinkedIn Ads offer varied demographics and targeting capabilities, ensuring your ad reaches the most relevant audience,
• Keyword competitiveness – choosing the right keywords is crucial as highly competitive keywords can drive up the cost, yet potentially attract a higher volume of quality leads,
• Targeting settings – fine-tuning your targeting settings allows for more precise audience reach, ensuring your ad is seen by those most likely to convert.

The different costs involved require a good budget plan to strike a balance between what you spend and what you could earn back. Since paid advertising costs have been going up and there is no sure shot way of reaching your target audience, it is wiser to set aside a budget and kick off with a smaller campaign to see how it works before deciding to go big.

Networking

Networking opportunities for SaaS proprietors abound in a plethora of locales, some conventional and others a bit unanticipated, encompassing both digital and physical realms. The avenues for meaningful connections extend beyond the traditional confines of conferences and meetups to the virtual corridors of online forums and vibrant communities. For instance, engaging in robust discussions on platforms like the world’s largest Slack community for product aficionados curated by Mind the Product, can open doors to a wealth of knowledge and potential collaborations. These engaging platforms are great for exchanging ideas, getting advice, and building connections with both like-minded individuals and prospective customers.

Plus, having a strong online presence can catch the eye of investors who are always scouting for fresh and promising SaaS projects. The growing networking scene mirrors the booming SaaS market, which is now climbing at an impressive 18% annually. With each passing year, the networking sphere becomes more expansive and eclectic, reflecting the dynamic and flourishing nature of the SaaS industry and becoming one of the natural SaaS distribution channels. This upward spiral not only augments the networking canvas but also enriches the SaaS community, fostering a conducive ecosystem for shared learning, growth, and success.

Indirect distribution channels for SaaS companies

Indirect distribution channels present an array of avenues for SaaS companies to extend their reach and multiply their customer base. These sales channels, including app store marketplaces, affiliate marketing, sponsorships, SaaS resellers, white label resellers, other technology providers, and professional services firms, provide a framework for SaaS startups to navigate the intricate digital ecosystem. By leveraging these channels, companies can orchestrate a structured and diversified distribution sales channel strategy, broadening their market presence and fostering sustainable growth in the competitive SaaS landscape.

App store marketplaces

App store marketplaces like Apple's App Store and Google Play Store are platforms where SaaS providers can reach a large customer base. They handle billing and payments, reducing the marketing costs for developers. These marketplaces offer:

• a large customer base – app store marketplaces provide a vast audience, as they are default platforms for mobile users seeking applications,
• reduced marketing costs – the built-in audience and discoverability features of app stores can significantly lower the marketing expenses needed to attract users to your SaaS product,
• streamlined billing and payments – with their own billing and payment systems, app stores simplify the financial transactions, saving SaaS providers the hassle and cost of setting up their own payment processing.

When considering app store marketplaces as SaaS distribution channels, it is essential to factor in the associated costs. For example, the Apple App Store requires developers to pay a yearly fee of $99, and takes a 30% cut on app and in-app purchases. It is vital to grasp the cost layout of each marketplace for budgeting wisely and making smart choices on where to showcase your SaaS product.

Affiliate marketing

Affiliate marketing is a strategy where affiliates earn a commission for marketing another company’s products. For SaaS companies, this strategy unfolds as a cost-effective and efficient method to amplify product reach and scale customer acquisition without proportionally scaling marketing expenses. Over 80% of brands have affiliate programs, and affiliate marketing has an estimated global worth of over $12 billion.

Moreover, affiliate marketing provides a platform for SaaS companies to leverage the established trust and audience of affiliates. It often results in better-targeted marketing, as affiliates typically promote products that resonate with their audience's interests and preferences. This aspect of targeted promotion often translates to higher conversion rates and better customer retention, which are crucial metrics for the sustained growth and profitability of SaaS ventures.

Sponsorships

Sponsorships allow you to showcase your brand and SaaS product to a broader audience within the industry.

However, make sure to do your research and compare options before choosing a sponsorship opportunity. You need to carefully evaluate your goals, budget, target audience, and consider:

• the size and relevance of the event audience,
• the level and type of exposure you will get as a sponsor,
• the alignment of your brand values and message with the event theme and speakers,
• the potential return on investment and impact on your sales funnel.

A well-planned and executed sponsorship can pay off in your brand awareness, generate leads, and increase customer loyalty.

Resellers

Resellers are third-party vendors that sell your SaaS product to their customers, aiding in reaching a larger audience and enhancing sales. Resellers often have access to a pre-existing customer base or a particular audience that is coveted by other SaaS companies.

White label resellers

A prevalent type of reseller in the SaaS sector are those offering white label solutions. They purchase your SaaS product, rebrand it under their banner, and vend it to their clientele, providing a ready-to-use software solution without the need for development on their end.

As a SaaS provider, engaging in white label reselling allows you to broaden your market reach and boost your revenue without allocating funds towards marketing and customer support. The white label resellers manage all facets of sales, promotion, and customer service for your product, letting you dedicate your focus on its development and enhancement. The model of white label reselling creates a mutually beneficial scenario for both parties, given a clear agreement on the partnership's terms and conditions is established.

Other technology providers (that embed your offering within their technology offering)

Other technology providers can embed your SaaS offering within their technology offering. Giants like Alphabet, Apple, and Microsoft are among the largest global SaaS providers. However, there are smaller and niche ones that can provide you with solutions for your specific business needs.

Great distribution channels examples are Salesforce, HubSpot, Shopify, Atlassian, AWS or Slack. By leveraging their add-ons marketplaces, you can expose your application to a wide pool of potential B2B users.

Which distribution channel is best for a SaaS company?

Grasping and utilizing the appropriate SaaS distribution channels is vital for guaranteeing your product lands in the hands of its intended audience. Your choice between direct, indirect channels, or a blend of both, will hinge on your specific business objectives and necessities. The essence of triumphant SaaS distribution pivots not solely on touching base with a large audience, but connecting with the right audience.