A SaaS company is any company that sells software or internet products to other businesses or directly to consumers.
SaaS products can be a significant investment, and businesses can plan large-scale initiatives around a SaaS product's capabilities. SaaS brands offer solutions based on a subscription service, and several account options are often provided.
For example, low-volume, average-volume, and high-volume users might all get different monthly prices that reflect the costs of higher-volume usage. Vendors can provide advanced functionality at an additional cost, enabling the business to upsell users on functionality in addition to volume.
To describe Business-to-business (B2B) partnerships between SaaS brands, there are essentially two models of SaaS offerings:
The full purchase journey—from trial to purchase to account management and cancellation—is completed by the customer without interaction from the company that is selling the product.
Goal of a partner program: Driving online transactions
Customers must work with a sales team to purchase a product or get a demo.
Goal of a partner program: Generating leads for a sales team to pursue
SaaS Partnerships amplify growth rates, and a B2B partner program can be an effective way to reward other businesses for delivering new business opportunities to your company.
Cheaper and simpler cloud solutions make it easier to start a software company—allowing companies to quickly scale their services as they build and grow their customer base.
Partnerships can build communities around SaaS technology and encourage widespread adoption.
SaaS brand partners can establish themselves as experts for niche use cases and audiences by generating the most relevant content that will resonate with the specialist buyer and stretching the product to create a more unique, more relevant solution than what the SaaS vendor has the resources to provide.
Partnerships have been forged across brands in retail, travel, financial services, media, and other industries and have driven significant revenue growth—over and above the growth that traditional sales and marketing channels deliver.
This interdependence has created a partnership economy. Hundreds of innovative brands now stretch the boundaries of what a “partnership” means, working with influencers, media houses, brand ambassadors, and more. Refer to the Partnership Type reference table to learn more about the different partner types that are common to B2B partnerships in the SaaS industry.
Partnership Type | Description |
|---|---|
Affiliates | Individuals or companies that get paid to generate clicks, leads, and/or sales for advertisers. Also called publishers or partners. Affiliate marketing operates on a performance-based model. Affiliates gain commission payments when specific “conversion events'' take place. A conversion event could be any number of actions a user takes on-site, like a product sale, a newsletter sign-up, or an account registration. When looking at B2B partnerships, a common scenario is for brands to offer their affiliates a commission for each client referred. For example, a brand can have a dedicated landing page for affiliate partner sign-ups that boasts a flat fee or a percentage of commission for each referral that ends in a subscription. |
Ambassadors or referrals | Brand ambassadors use word-of-mouth to build a positive public image of your brand and products, and can help support lead generation through their engagement with your brand. Software companies often have advocacy programs consisting of customers who prefer using their solutions. For example, a SaaS brand might offer special incentives to customers for referring friends and family. Some of the strongest ambassadors for a software company can be their own employees. Employees know the products better than anyone, which fosters credibility among customers and can boost a brand’s reputation online. Many SaaS brands will offer special referral programs for employees that can be beneficial to all parties. |
Associations & Communities | This covers a broad spectrum of partners such as business associations, trade groups, and non-profit organizations that partner with SaaS brands to drive leads. Professional and trade associations make a natural partner for many SaaS software solutions. For example, some brands partner with various local chambers of commerce as a way to reach the SMB market. Companies can also so strongly value a cause that they partner with various cause-based organizations—think of digital signature solutions that firmly believe in reducing physical paper and therefore will partner with environmental groups. |
Comparisons & Reviews | This group covers B2B-specific publishers that review or compare various SaaS products and generate leads for brands through their websites. This includes review sites, where an author reviews a SaaS product, as well as comparison sites, where similar products are compared by qualifiers such as pricing, quality, ease of use, and design. For example, many review sites have software categories where authors frequently review new software as well as write about their experience and opinion of the product. Interested buyers can then click through the partners' links and purchase the reviewed software. |
Creators & Bloggers | Many creators and bloggers have built niche audiences around various SaaS markets that make them valuable B2B partners. Because software is so pervasive—seeping into just about every field or hobby—a social creator who happens to be a key opinion leader or subject matter expert in a certain space could make a great advocate for a solution that they've found value in. The more important social networks for creators in the software space aren't social platforms such as Instagram or YouTube. Rather, it's community sites like Reddit or LinkedIn. Reddit has numerous technology experts having conversations in an anonymous way. Many of these social platforms also host various Social Communities where knowledge is shared among various members. |
Integrations | Software companies often work with each other to round out each other's software capabilities. SaaS vendors cannot always build everything for everyone. They need to forge partnerships with other solution providers to build holistic solutions that solve the customer's problem. Integrations enable brands to work together to create convenient and user-friendly products and services by taking one or more aspects of one brand's products or services and integrating them with the other brand's software. For example, a commercial accounting SaaS product can integrate with a CRM, in order to dynamically populate the accounting software records with customer information. |
Premium Publishers | A premium publisher is one whose content is actively sought after by a loyal audience. They often boast high-quality and targeted content served on an engaging platform. They know their audience well and understand how to connect to their readers. SaaS companies often partner with premium content sites to drive leads or sales of their products. Premium publishers can charge fees for subscriptions or memberships and could limit the number of free articles that a non-subscriber can access in a certain amount of time. |
Niche Content | Niche content partners offer highly specialized content to targeted audiences. These partners serve content that is geared toward specific industries. They can specialize in writing about finance, travel, technology, business, or any other subject matter. They enable you to speak directly to a relevant and narrow audience. Niche content partners are great for aligning your brand with key opinion leaders that speak to the same audience that you do, and are trusted by the community. They can help target the exact audience that you want to reach and can provide credibility to your promotions. |
Strategic B2B | Strategic B2B partnerships are mutually beneficial, where companies align with complementary businesses to drive referrals and lead generation. These partnerships leverage co-branding between similar or complementary industries to increase sales, customer engagement, and mindshare for all brands involved. These partnerships require strategy, and although they can require effort to get started, they can provide you with significant opportunities for revenue growth and lead generation. In these relationships, the partner submits a lead using a form, or other technology, which is then passed to the brand's sales team. If the lead is qualified as an opportunity, there could be a payout for the partner based on the submission of the lead. If the lead then signs a contract and the deal is won, there could be a more significant payout based on the submission of a winning lead. Depending on the relationship structure negotiated, the partner can get paid out for either conversion, or both. |
Would you like to know how to find your ideal B2B partner & design the perfect alliance? See our in-depth guide, How to Find your Ideal B2B Partner, for steps to building first-class B2B partnerships.
There are a number of common pricing practices in the software world. Understanding them can help you plan your partnership structure around the pricing model of the products being promoted.
Permanent licensing used to be the most common form of pricing. In a permanent license, the software vendor charges a one-time price that allows a certain number of users to use the software. When the software vendor sells the next major version of the solution, consumers either remain with the old version or upgrade and pay another one-time fee for the latest version.
The SaaS prefers some form of subscription-based pricing. Monthly subscription charges are probably the most frequently encountered, but annual subscription charges are common too. Furthermore, there are a variety of dimensions in subscription pricing that make conversion tracking and payout calculations of the partnership world a bit more complicated.
Types of subscription pricing | Description |
|---|---|
Freemium Models | Sign up for free and gain access to a basic set of features at a limited volume. If the user wants to use more advanced features or exceeds a certain utilization threshold, then the SaaS provider can require the user to sign up for a premium subscription. |
Free Trials | Enter your credit card, but try the product for free for a given period (one week, or one month). If you don't cancel, then the SaaS provider will start charging the monthly subscription. |
Flat Fee Subscription | Some simpler SaaS products can simplify pricing down to a single flat price for users. A single price is quick and easy for prospective customers to understand, but the software provider sacrifices their ability to extract more value from prospects who can be heavier users or are willing to pay more for the solution. |
Package-based Pricing | Some solutions will package up variants of their SaaS solution according to usage volumes (charge more for prospects who intend to run more transactions or revenue through it) or feature packages (charge more for advanced, specialized features). |
Per-user Pricing | When selling to other businesses, SaaS solutions can often charge on the number of activated logins, or allow as many users to log in, but limit the number of concurrent users to their given pricing tier. |
Sales-Assisted (aka Custom) Pricing | Some SaaS solutions do not allow users to make a self-service purchase directly from their website because they require a higher-touch sales process to discover and pinpoint the most fitting price. This might be because the customer needs are too complex to self-determine the right package to sign up for, or the software provider's pricing model is too complex. In many of these cases, the only call-to-action on the software vendor's website might be to fill out a “Request a Demo” form, which then gets submitted to their CRM system as a lead for a sales rep to follow up on. |
Self-service install refers to solutions that require less customer purchase consideration, which users can either directly download or register for on their own.
For instance:
Many simpler consumer-based software, like office productivity products you can download onto your laptop.
Many simple web-based applications sit in the cloud but have value for many individuals and small and medium-sized businesses.
In this structure, conversions can be fired directly when the user has successfully purchased the software (or software license) directly from the company's website.
Similar to self-service, but the customer usually receives a free trial for a limited number of days (typically 30 days) and loses access if they don't subscribe, or, occasionally, are automatically upgraded to a paid subscription if they don't cancel before the free trial period is over.
In this case, two conversions are usually fired—one at the start of the free trial (sometimes with a small payout or none at all) and another one once the user starts their paid subscription (with a more substantial payout).
Like self-service, but the customer can opt to cancel their subscription and get reimbursed (typically 30 - 90 days).
In this case, two conversions are usually fired—one at the start of the subscription (sometimes with a small payout or none at all) and another one once the cancellation period has passed (with a more substantial payout). Users who cancel can trigger the advertiser to reverse the initial partner payout.
Lead Generation, or Lead Gen, refers to a solution that doesn't have a simple self-sign-up option on a website and requires an actual conversation with a sales representative to close the sale.
The seller can run a more comprehensive discovery session to map out the prospect's needs to recommend the most suitable solution. The prospect can evaluate multiple vendors to compare each solution to their own complex requirements.
Many enterprise software solutions fall into this bucket. Leads are often submitted into a CRM system where a sales process is initiated. The sales cycle can run anywhere from a few days to a few months, over a span of multiple presentations and negotiations.
Typically, two conversions can happen:
At the moment that the lead is qualified as an opportunity—a small payout may or may not occur at this point.
When the opportunity has passed into a later stage in the sales funnel—usually when it is “Closed-Won” and a contract has been signed.
Remember to align partner payouts to conversion value. It is up to you and your team to set payouts for the different actions that occur as part of your sales funnel.
For example, you might want to pay a modest flat fee whenever a lead is qualified, then once the contract is signed, you'd want to give partners a more significant payout, such as a percentage of the annual contract value.
Benefits | Description |
|---|---|
Increased Revenue | B2B partner programs create the potential for significant growth in sales and revenue opportunities. If a B2B partnership is successful, both parties will be rewarded with financial advantages. Brands could see increased revenue and higher conversion rates, while partners run the potential to earn higher levels of compensation. A B2B partnership can be mutually advantageous by increasing the revenue opportunities for both parties. Building a referral program to generate leads is one of the most profitable types of partnerships in the SaaS arena. While this type of partnership can take some effort to get started, the revenue and cost benefits can lead to significant growth. |
Reduced Costs | One of the most significant benefits of a B2B partnership program can be reduced overhead, sales, and marketing costs. Since your partners are paid on a performance basis, you only pay out when a successful conversion has occurred. If you are running a B2B referral program, the cost benefits can be even greater. Since your partners act as outsourced sales reps, you are building a team of brand experts who can speak to your products and sell them on your behalf. These low-touch sales begin outside of your internal resources, which reduces the overall costs of new customer acquisition. |
Expanded Reach | When partnering with other businesses, your brand is exposed to a new customer base and you can gain access to the other brand's audience. You can connect with customers that you might not have without the partnership. Your brand will be promoted to their audience as a trusted and complementary brand to their own, which will build trust and interest in your products and your company. |
Expansion into New Markets | B2B partnerships offer a cost-effective way to expand into new markets. Your business partner can be highly established in markets that you are not. When integrating each other's products or hosting referrals through your partner, you are gaining entry into marketplaces that may not have been on the table prior to the partnership. |
Attribution | Understanding ROI can be difficult, especially when measuring growth through marketing channels. Since B2B partnerships are performance-based, the steps to measuring revenue expansion and customer acquisition are much simpler and automation helps you understand which steps in your sales cycle are contributing to success. |
The opportunity to make commission is certainly a common thread across any vertical. So we're focusing on the business benefits and opportunities around partners in the Software space—what sort of unique win-win scenarios can partnerships offer?
Tech stacks can be complex, and a single software vendor can't always capture the full range of solutions needed by a particular enterprise. That's where consultancies, agencies, and other partner types can help—by participating in multiple SaaS vendors' programs, they can refer solutions from different vendors to their client, and provide the value-added services to either help them integrate the different solutions, customize 3rd party software, or train clients on how to make the best use out of a bundled set of solutions.
Many businesses out there are not tech-savvy. They may not have the resources or budget to hire dedicated resources to handle a particular need that can be addressed by technology and would prefer to outsource a function/capability, particularly if they view the function/capability outside their core competencies. This provides a unique opportunity for specific partners who can bundle together software and outsourcing services.
This is very specific to independent software vendors (ISVs) or channel partners who produce their own software. Development resources are often limited, and the most successful software companies realize that they cannot be everything for everybody. But many smart ISVs leverage partnerships to form complementary solutions to address the needs of audiences outside of their own, and still capture the opportunity at hand.
Many SaaS vendors will provide a recurring commission to partners who drive valuable customers. This strongly aligns the incentives of the SaaS vendor and the partner: both want to attract customers who stick around. This can provide a steady, reliable revenue stream for referral partners who are great at attracting and converting high-quality customers and servicing them to ensure that they keep paying their SaaS subscription fees.