In SaaS partnerships, there is a lot of jargon to describe partnerships or collaborations. This is not only confusing internally at your company but also for those who want to become your partner.
In this article, we look at the different types of partnerships we can have for SaaS companies. We also look at the goals we pursue and how we create shared value together with our partners.
What is Partner Marketing?
Partnership marketing is a collaboration between two or more companies or individuals, where both sides benefit. The objectives for each party can vary depending on the type of partnership.
Some common goals that partner marketing can establish are:
- Increase sales leads
- Increase brand awareness
- Grow the number of potential customers
- Revenue share
Partner marketing can involve a verbal agreement or a legal agreement. An example of a legal agreement is the affiliate terms and conditions you sign when joining an affiliate program.
Some partnerships can last years, while others are simply project-based collaborations. The type, scope, and goals of your partnership will depend on your business strategy.
Marketing Partnership Examples
So, what kind of partnerships can you have for SaaS?
We have categorized SaaS partnerships in three main categories; Affiliates, Solution Partners and Tech Partners. Let's look at each type to see how they can help grow your company.
Affiliates
Affiliate marketing is a performance-based model, where the vendor (company) pays out affiliates for the sales that have been generated by them.
Besides generating sales, it’s also possible to have objectives such as lead generation or sign-ups. One of the greatest benefits of running an affiliate program to generate sales is that you only pay the affiliate a percentage of the commission for each converted referral. This is a lucrative model compared to the customer acquisition cost (CAC) through many other channels.
Affiliate Marketing Goals
The goal for the company is to increase the number of sales (affiliate revenue), and the goal for the affiliate is to generate commission.
How Does Affiliate Marketing Work?
SaaS companies that have an affiliate program usually reward between 20% to 40% of recurring commissions to their affiliates. (Recurring commission means that the affiliate keeps on receiving commission for as long as the referral has a paid license.) You can choose to make this unlimited commission or to set a bracket at, e.g.,12 months of commission, or a certain amount.
Online affiliates usually don't have a relationship with the end customer. They use their online channels, such as blogs, YouTube channels, and email campaigns, to drive traffic to the company’s website.
The affiliate model focuses on attributing self-service purchases with the help of an automated system that works through an affiliate link and cookie set-up. Therefore, affiliate programs usually don't focus on sales-assisted deals and enterprise packages.
To manage marketers, a variety of affiliate management software is available. These solutions help to streamline the referred purchases, pay-outs and activity in your program. Rewardful, for example, is an affiliate software provider with all the functionality to set up a new affiliate program.
How to Activate Your Affiliates
Affiliates are focused on the benefits of your affiliate program such as commission rate and recurrence of commission. They will also evaluate if the type of product you have fits with their audience, and what kind of valuable content they can create. Many affiliates focus on a specific niche such as SEO, web development, and lead generation.
Although affiliates might already be familiar with your product, there are also those who have not used your product yet. In order to promote your company and services in the right way, it is important for partners to receive product information. As an affiliate manager, you can provide this in the form of guidebooks, an onboarding call, or prerecorded product videos.
Other promotional materials, such as banners are useful assets for the affiliate to place on their website. These banners can be uploaded to the affiliate dashboard, through the affiliate software, or you can send it directly to the affiliate in an email. For those relevant affiliates that are not yet familiar with your product, you can also offer a free license. This makes sense if they are educators and need to demonstrate your product to their audience.
If you sign up an affiliate that has an audience that matches yours, you can decide to give them a discount code to share with their readers and students. This can help sway potential customers who are on the edge of purchasing your product.
Solution Partnerships
Solution partners help their clients integrate tools to make their business processes more efficient. They have 1:1 communication with the end customer and are involved in projects to help the end customer create more revenue.
Solution Partner Goals
The goal for a company to start a solution partnership is to increase sales, most often enterprise deals. The goals for solution partners are to expand their own business and client projects, and increase their customer success.
Any tools that are effective and easy to implement can be a great solution for their client. Partnering with these tools helps the solution partner to improve their own business.
How Do Solution Partnerships Work?
Where affiliates often don’t know their readers and students personally, solution partners are hired by the end customer to implement tools and processes and to execute projects.
Therefore, they can have in-depth knowledge about the clients’ processes and strategies.
This means that solution partners don't like working with an affiliate link because it does not fit into their style of working with their clients. It suits them better to, e.g., send referrals per email to the partner manager, or to buy tools on behalf of the end customer as an implementer.
Solution partners are a great way to extend your potential customer base and have an expert helping the end customer to work with your services. These partners can be seen as an extension of your own Customer Success and Sales Team.
How to Activate Your Solution Partners
In terms of perks, commission can be an incentive for solution partners. But mostly, these partners are interested in serving their clients in the best way possible. As a company, you can support them with the help of product training, sales training, and communicating specific use cases.
It's also a nice bonus for solution partners to be listed on the website of the partnership vendor. This gives them exposure to possible clients who need help implementing your tools. Once your solution partnerships grow, you can expand your training with certification.
Technical Partnerships
Technical partnerships are partnerships between two companies where an exchange or enablement of technology creates value for both parties. By partnering together, both parties are able to provide better services for their customers.
Technical Partner Goals
Technical partnerships have the goal of expanding value for your company’s and your partners' customers. When a company needs an integration to expand its business and customer success, it can choose to partner up instead of creating the integration itself.
The goals of both technical partners include improving the company’s market position by creating a competitive advantage and filling product gaps in a common market.
How Do Technical Partnerships Work?
When exploring the market position of a product, you might cross companies that are not direct competitors but offer a complementary product to your own services. These can be great potential technology partnerships.
There are many reasons to initiate a technology partnership. One of them might be that the product team identifies a product feature that would bring extra value to the product, but has no priority on the product roadmap because it’s not the core business of the company. Or the in-house expertise is missing to develop this feature at the moment.
With the help of the partnership, the companies combine their strengths and technology. Together, they are able to expand their audience and potential customer base. New features and improving your products functionality also increases the retention of existing customers. They will be less likely to move to other companies in that space.
When establishing a technology partnership, a formal agreement is created to have clear deliverables and responsibilities. These partnerships can sometimes take longer to set up, depending on the alignment of requirements and other negotiations.
Other Partnerships
Partnerships come in many forms. Some other types of partnerships are content marketing collaborations, link exchange, sponsorships, and influencer marketing.
When we look into promotions and influencer marketing, always set clear expectations.
Before agreeing on collaborations, set metrics to evaluate the success of the upcoming campaign. These metrics can be:
- Click-through rate
- Sign-ups
- Likes or other engagement metrics
To get an idea beforehand of the engagement you can expect from a comarketing campaign, ask the company for past campaigns and results. And have a closer look into the customer audience.
Ask yourself:
What is the quality of the audience base?
- What is the size of the audience on the blog/ social media channels?
- Is the audience persona in line with the buyer persona of the company?
- What is the engagement rate like on social media?
- Are there any signs of fake accounts, such as large numbers of followers but little engagement?
- What is the geographical reach, and does this match your goals?
Even though many smaller sponsorship and co-promotion deals do not require a formal agreement. Answering these questions will give you a good idea of the results you can expect and the potential for the collaboration.
Final Words
Partner marketing can bring many great opportunities for your business. Match your partnerships to your business needs and goals, which can open many doors for creating revenue. You can expand your audience base, and even improve your customer retention.
Try Rewardful and see what affiliate marketing can do for your business.
