What Is a Channel Strategy? Rank Channels by Where Your Buyers Are

Ask a growth team for its channel strategy and you will usually get a list: paid search, LinkedIn, outbound, events, partners, a podcast someone is keen on, and whatever a competitor seems to be doing this quarter. A list is not a strategy. It spreads budget and attention thinly across channels that were never compared against each other, and it guarantees that none of them gets enough time to prove itself. A channel strategy is the opposite: a short, ranked set of channels your economics can actually support, each funded long enough to learn, and reviewed on a regular rhythm so money moves to where it returns most.

This note sets out what a channel strategy is, the constraint that narrows your options before any preference does, and how to run the channels you choose as a portfolio rather than a wish list.

What Is a Channel Strategy?

A channel strategy is the decision about which routes you will use to create demand and reach buyers, in what order, with what budget, and under what rules for scaling or stopping each one. It sits inside the wider go-to-market strategy: once you know who you are selling to and how you want to be positioned, the channel strategy decides how you will actually get in front of those buyers, repeatedly and at a cost the business can carry.

It is also distinct from route to market. Route to market is about how the product physically or commercially reaches the buyer: direct, through distributors, through marketplaces or resellers. Channel strategy is about how demand is created and captured along that route. The two have to fit. A distributor-led route with no plan for creating demand among the distributor's customers is a route with nothing travelling down it.

Start From Deal Size, Not From Preference

The first filter on any channel list is economic, and it is set by how much a customer is worth. On The Revenue Formula podcast, Toni Hohlbein describes this as the balance between customer acquisition cost and average contract value, a framework he credits to Brian Balfour. Average contract value creates a playing field. When it is very low, you are realistically limited to organic and viral channels, because nothing else pays back. As it rises, progressively more expensive channels open up: online advertising first, then outbound with dedicated SDRs, and at the top, enterprise reps supported by pre-sales and post-sales engineers and a travel-heavy sales motion.

Hohlbein puts rough thresholds on it from his own experience: online advertising becoming realistic at around 6,000 euros of annual contract value, outbound SDRs at roughly 9,000 to 10,000, and full enterprise selling above about 50,000. Treat those as one operator's reference points rather than rules, because sales cycle, churn and expansion all shift them. The principle is what matters. Plot what each channel would cost to acquire a customer against what that customer is worth, and most of the list eliminates itself. A team selling a low-value product through an enterprise sales motion, or a high-value one through channels built for impulse purchases, is fighting its own economics.

The second filter is where your buyers actually are. Channels only work if they reach the people who buy, in the moments when they are open to the problem. Some channels have a natural ceiling for this reason: paid search, for example, can only ever reach the fixed pool of buyers who are actively searching for your problem, and early success there often plateaus as that pool is exhausted and competitors bid up the same terms. Knowing your ideal customer well enough to say where they spend attention is what turns an affordable channel into a productive one.

Pick a Few, Then Give Them Time

Once the economics and the buyer have done their filtering, the realistic set is usually small, five or six channels at most. The discipline is to rank them and work through them, rather than running all of them at once. Hohlbein's advice is to give a promising channel something like nine to twelve months to prove a motion, rather than judging it on one short experiment. Channels take skills to run well, whether that is copywriting, search, partnerships or outbound sequencing, and those skills take time to build. A team that abandons each channel after a single inconclusive test never accumulates them, and ends up permanently in the expensive early phase of every channel it touches.

Giving a channel time does not mean running it on faith. Set the hypothesis, the leading indicators you expect to see early, and the conditions under which you would stop, before the money goes in. The aim is to separate a channel that is slow to mature from one that is not going to work, and that is only possible if you decided in advance what each would look like.

Run the Mix Like a Portfolio

Channels that work do not keep working at the same rate forever, which is why a channel strategy needs a review rhythm and not just a launch plan. A useful lens, also discussed on The Revenue Formula, borrows the classic two-by-two from portfolio management: growth potential on one axis, efficiency on the other, measured with something concrete such as CAC payback. Channels then fall into four groups.

Cash cows are efficient but no longer growing. They fund everything else, and the right move is mostly to leave them alone, except to find and cut the least efficient spend inside them, because pouring more budget into a flat channel buys very little extra growth. Stars are efficient and growing, and deserve more investment. Question marks are new channels, new markets or new motions such as account-based programmes: inefficient today with real growth potential, and the hardest management debate, because each one will either become a star or a dog. Dogs are inefficient and not growing, and are candidates either for an improvement project or for being shut down.

The point of the exercise is reallocation. Break acquisition cost and payback out by channel, by market and by segment rather than relying on one blended number, and move money from the expensive channels to the efficient ones. The same total budget, better allocated, lowers payback without cutting growth. Channel choices also depend on the shape of the go-to-market itself: every use case you add multiplies the cost of selling, and the channels have to carry that cost, which is why it pays to choose that shape first.

Where to Start

Write down every channel currently receiving budget or attention. Next to each, note what a customer from that channel is worth and what it costs to acquire one, even if the second number is rough. Cross out the channels your deal size cannot support and the ones that do not reach your buyers. Rank what remains, choose the two or three you will commit to for the next nine to twelve months, and write down what success and failure would look like for each. Then put a quarterly review in the calendar where every channel is placed on the growth-efficiency grid and budget is moved accordingly. That document, short as it is, is a channel strategy. The list you started with was not.

Frequently Asked Questions

What is a channel strategy? A channel strategy is the decision about which routes a company uses to create demand and reach buyers, in what order, with what budget, and with what rules for scaling or stopping each one. It is a short, ranked set of channels the business can afford, not a list of everything it could try.

How do you choose the right marketing and sales channels? Start with economics: compare what it costs to acquire a customer through each channel with what that customer is worth, and remove the channels your deal size cannot pay for. Then check which of the remaining channels genuinely reach your buyers. Rank what is left and commit to a small number at a time.

How long should you test a new channel? Long enough to learn, which is usually far longer than a single campaign. Operators such as Toni Hohlbein suggest around nine to twelve months to prove a channel motion, with early indicators and stop conditions defined before the test starts.

What is the difference between channel strategy and route to market? Route to market is how the product reaches the buyer, for example direct, through distributors or through marketplaces. Channel strategy is how demand is created and captured along that route. The two need to fit, or the route has nothing travelling down it.

How often should you review your channel mix? At least quarterly. Place each channel on a grid of growth against efficiency, protect the efficient ones, invest in those that are growing efficiently, and cut or fix those that are neither, moving budget accordingly.