Building a partner program is one of the strategies to accelerate SaaS growth. Partners not only can benefit from referring new customers via sharing their affiliate link or reselling your software. They can also make money by offering SaaS related services such as applications development, integrations, and consultation. Affiliates, resellers, technology partners, experts, consultants can become a part of your ecosystem.
Are you ready to launch a partner program?
Have you achieved a product market fit?
Before you start considering your channel strategies, make sure you have achieved a product market fit. If you’ve only just built your product or if you have only a few customers, sales channel partners are not right for you.
Can your team sell your product?
Do not assume that partners can sell your product to customers if you can’t. Affiliate, resellers and technology partners can speed up your current growth. They put in the effort in promoting products that give their audience or clients value. They want to make money off your product, and they won’t be able to sell something that no one wants to buy or doesn’t work.
Does your website convert?
Before you start looking for partners, make sure your website is capable of converting potential customers. Although your partners will be your extended sales and marketing team, they shouldn’t replace your marketing efforts. Affiliate marketing is an additional client acquisition channel. Once potential clients visit your site through the affiliate link, the landing page must be effective enough to make them sign up for an account. Affiliate marketers won’t be able to sell the product either if it’s not good. Make sure your customer service team can take good care of new customers and won’t be overheal in case the number of leads grows.
Types of SaaS partnership
Affiliate is the easiest to implement and the most common type of partnership. Partners drive customers to the vendor’s website by sharing their affiliate link. Each link is unique, so the merchant can track which partner brings which sale.
Affiliate marketing is a performance-based marketing. A merchant awards their partners for every qualified action, e.g., sale or lead. In SaaS partner program it’s usually a commission on sale, sometimes a flat fee per qualified lead. A recurring commission is one of the main reasons why partners decide to join the SaaS affiliate programs
Selling through affiliate partners is a cost-effective and low-risk growth strategy. In a revenue-share model, affiliate shares a percentage of actual sales. Unlike in case of an in-house sales team, if affiliates don’t generate sales, a merchant doesn’t bear any costs.
Affiliates can promote their link in various ways:
- add banners or other creatives on their website to attract their audience
- include information on promoted product and service in newsletters
- use Google Ads
- create dedicated landing pages
- share links directly with potential clients.
Affiliate marketing is one of the most popular methods to monetize a blog. Detailed reviews and rankings are a great source of leads for a SaaS vendor.
Advantages for affiliates:
- The low barrier of entry.
- They don’t offer support for the product. The merchants are solely responsible if there are bugs or downtime.
- Affiliate marketers usually don’t need to be customers of the products and services they promote. In most of the programs, client and partner account are separated.
- In this model, affiliates do not need to know their referrals personally.
- An affiliate doesn’t have to have any technical skills to sell software.
The affiliate partners cannot set their prices. They earn a commission and they must reach a withdrawal threshold to withdraw their earnings. The minimum payout should be set on a reasonable level so affiliates are not discouraged.
In the affiliate marketing partners don’t need to know their referred customers personally. Yet, when it comes to software, they often share their affiliate links with their clients. For example, a web developer can suggest online tools that can help their clients grow: an e-commerce software, a live chat solution, email marketing tool, etc.
Often the same partner acts like a reseller and an affiliate depending on a client. They can bill specific clients for your application (for example if they provide other services) or earn an affiliate commission for recommending other users. Affiliate links can also be used when integrating two applications, in which case a partner will be an affiliate and a technology partner.
Launching and managing an affiliate program
Set affiliate program terms
There are many things to consider when launching affiliate programs. Do you want to build your affiliate program, use ready tracking software or join an affiliate network? You need to decide on terms and conditions on your program including:
- how you want to compensate your affiliates (flat fee or revenue share, one time or recurring commission, pay for lead or only on sale, etc.)
- payment methods
- minimum payment threshold
- cookies lifetime
- allowed promotional methods.
Prepare affiliate marketing assets
To help your affiliates attract potential clients, provide them with ready-to-use marketing resources such as:
- text ads
- case studies
Offer active support
Educate affiliates about your product and inform them of the new features and your client profile. In addition, your inexperienced publishers will appreciate help with understanding affiliate marketing strategies. For instance, you can share with them tips on how to promote your SaaS.
Affiliate manager should also control campaigns to make sure partners comply with terms and conditions, don’t promote affiliate links on the illegal websites, and don’t spam.
Recruit right affiliates
The primary goal of working with affiliates is clients acquisition. However, they can help companies even if they don’t generate sales or increase revenue directly. By including information about the product in their newsletters and websites, they can help build brand awareness. Yet, merchants should try to recruit affiliates with traffic relevant to their offering. There should be a match between your product and the audience send by your partners; otherwise, they won’t convert into paying customers. Focus on quality of affiliates, not quantity.
The resellers not only promotes products and services but also collect the money. They can set up their prices for your application. The resellers can help with distribution of your app in different markets and can offer support and value-added services.
For resellers partnering with SaaS providers give them opportunities to use existing platforms and focus on what they are best at like consulting, design, customizing apps and implementation. When recruiting partners research how your product fits in their ecosystem. They can be especially interested in promoting your product if it can integrate with and complement the applications they already sell.
Resellers usually purchase discounted price and can and bill their own clients directly or through a third party.
Partners can also become your valuable advisers on new feature ideas, pricing or anything else related to your business.
Reasons why people buy from resellers:
SaaS vendors usually accept clients from any part of the world. Users can find and purchase a license directly from a merchant (unless there is some limitation like payment methods). It doesn’t mean that there is no place for resellers in the SaaS world. Some of the most popular reasons why clients prefer resellers:
Understanding the software can be challenging for the users that are unable to speak one word of English (or of other languages that you use). Support service and training in the local language can help them understand the features and how to use your application.
A better understanding of their market
Resellers help with brand awareness in the new markets and usually have their strategies. They are familiar with the culture, social behaviour and use cases in their target markets. Their go-to-market strategy can be different than the SaaS vendor, e.g. they can operate only in niche markets.
Reseller can issue one invoice for a variety of tools that clients use. Clients don’t need to worry about adding VAT or currency exchange.
Reseller can have a base of established customers who trust their recommendations and are able to choose products best suited for their businesses.
VARs can help customize the software to the client’s specific requirements.
A VAR is a more tightly-coupled relationship between a partner and a vendor. In this model, the resellers often own the relationship with the customer. They can fulfil the customization needs of your customers by:
- building integrations and custom apps,
- helping with setup,
- outsourcing human resources familiar with the app (for example customer service agents for live chat software and internet telephony applications).
White label reselling
In this model, resellers can sell products and services under their brand or trademarks.
Certified agency partner
Some merchants offer partners an opportunity to become their certified agency partner (sometimes called Experts). It can require taking courses and paying fees to get a certification. By becoming an accredited partner company often decide to build their business around one or selected products. They receive help and guidance to ensure they know the software inside and out, tips on how to resell and deliver results.
Technology partners are individuals and companies that develop apps or integrations that are complementary to your application. This kind of partnership can benefit your mutual customers. Technology partners can add value to your application that your team doesn’t have time to implement (or for any other reasons haven’t decided to add it to the roadmap). Technology partnership enables merchants to fill a gap in their applications that is not a core competency for them.
There are various types of financial relationship between a vendor, client and a technology partner.
- A VAR can bill clients for a merchant’s app and own app, theme, training, etc
- Work on affiliate basis and share an affiliate link in which case the client pays the merchant directly for the app and the reseller invoices clients only for value-added services.
- If a client already uses a vendor’s app, technology partner will only charge for own integrations
- A merchant can be also is responsible for all payment and then pay technology partner. For example, Shopify handles charging all fees on two different billing cycles – the Shopify subscription is invoiced on a 30-day cycle, and each paid app has an independent 30-day billing cycle. Using their Billing API is mandatory to have an app listed. Developers receive 80% of charges for their applications.
Advantages of technology partnership:
- Lower churn rate – integrations with third parties boost engagement and stickiness. When users find more value in your application, they are less likely to churn.
- Enhance your product – add value to your applications.
- Co-marketing opportunities – information in newsletters, blog exchange, featured apps are just some of the ideas
- Increase visibility – one of the perks of partnering with industry-leading platforms is that they list applications in their marketplace or directory. You can get your product in front of a new audience.
There are lots of different ways you can get other businesses and individuals to sell your product for you. Different types of SaaS partnership: from affiliates to strategic technology partners, can help your company grow. SaaS partners have new revenue opportunities in form of custom applications development and integration services.