As of 2021, there were 25,000 SaaS companies in the world, with the US alone having 15,000 companies. Global SaaS end-user spending is predicted to reach $176.6 billion in 2022. Also, more than half of enterprise IT spending is expected to shift to cloud technologies by 2025. In such a scenario, running a SaaS partner program has become crucial to facilitate growth and create revenue.
If you have a well-designed SaaS product that users love and offer great customer service, you will have built a loyal customer base. It’s time to put that goodwill to work!
This article will help you understand the various kinds of SaaS partner programs and how you can design a successful partner program for your brand. We’ll also share some examples of SaaS partner programs that have helped businesses scale.
What is a SaaS partner program?
A SaaS partner program (or a channel partnership) is a revenue channel wherein SaaS companies use current customers, complementary businesses (agencies, consultants), or integration partners to promote and/or distribute their product and, in turn, reward them each time they bring a new customer.
Rewards may be in the form of cash, sales commissions, or tangible incentives like special discounts, extra training, or more promotion of the partners and their services. The more software the partner is able to sell, the higher the reward will be.
SaaS partner programs help businesses leverage a well-known brand name with extensive connections to amplify their reach and get in front of more potential customers than they could have done on their own.
SaaS partners sign a contract to promote or sell the SaaS company’s software, but they do not become their employees. They remain operating as independent organizations.
Is it worth building a SaaS partner program?
A survey of B2B companies by SaaS Capital revealed the following encouraging figures about partner programs:
- On average, partner programs drive 21 percent of revenue.
- SaaS companies with partner programs (reseller programs) grow 5 percent faster than those that only sold directly.
- 53 percent of SaaS companies are running a partner program.
With a SaaS partner program, you stand to gain the following benefits:
- Expansion to new markets – You can leverage the brand presence of a partner that operates in a new market you’re targeting to make it easier for you to gain a foothold.
- Increased brand awareness – Partners help you gain exposure to new markets and clients.
- Accelerated growth – Along with increased awareness and exposure, partners may also offer added value in the form of specialized customer assistance. This leads to more signups, higher customer retention, and greater revenue.
- Relationship building – Beyond generating leads and promoting SaaS products, partner programs help you build relationships with complementary businesses that benefit both companies.
- Low-risk revenue generation – Running SaaS partner programs costs less than paying for traditional ads. You only pay when you gain leads or customers.
Types of SaaS partner programs
You should choose the partner program that best suits your business. Here are five of the most common types of SaaS partner programs:
1. Reseller partnerships
You license partners to sell your SaaS product to their suite of clients, usually in their software marketplaces. They also offer value-added services like assisting the customer with the SaaS product, be it customization, customer support, or implementation (for a fee).
It works best for managed service providers (MSP) and web agencies.
E.g. Monday.com got 161 new customers and tripled its ARR in South Korea through its reseller partnership with SPH, a GIS solutions and consulting company based in South Korea.
2. Affiliate partnerships
You partner with agencies, website owners, and content creators to market your product. Partners place an affiliate link on their website that directs some of their traffic to your landing page. When a user clicks on the link and buys your SaaS product, you pay the partner a cash commission.
Affiliate programs are the most common type of partner programs in the SaaS space. Partners may also create persuasive content like testimonials and reviews to get more people to purchase.
If you’re a nascent company, an affiliate program is most suitable for you.
E.g. Woorise offers its affiliates up to 30% in recurring commissions for successful conversions. It also offers a variety of payment methods —you can get payouts via PayPal once you have earned $100 in commissions or you can earn cash credit to use against your own monthly plan.
3. Referral partnerships
Referral partnerships are formal agreements with select partners to recommend your SaaS product to friends and family. These partners are usually customers who have used your product and, thus, their word can be trusted.
Rewards are usually given out in the form of discounts, coupons, credit, loyalty programs, and long- and short-term referrals.
While referral partnerships bring fewer sales than other types of SaaS partner programs, referrals have a higher customer lifetime value than non-referred customers.
4. Agent/broker partnerships
Agents/brokers promote your SaaS product to potential customers and direct them to your sales page where they are more likely to make a purchase. These agents/brokers may not have used your product but are willing to promote it in exchange for rewards.
They do not resell your product but act as an intermediary to bring qualified leads to your website.
5. Integration partnerships
An integration partner is a non-competing company whose software integrates with yours and who lists your SaaS product on their marketplace as one that integrates with their own product.
They place links on their website that direct to your sales page and earn commissions on every purchase. However, they bring greater value than affiliate partnerships because they drive brand awareness and sales for each other.
E.g. Slack runs an integration partner program with partners like Zoom and Google, which allows customers to use these apps within the Slack interface.
8 steps to build a SaaS partner program
By following these eight steps, you can build a SaaS partner program with high-quality revenue-generating partners:
1. Determine if a SaaS partner program is right for your business
Ensure your SaaS business meets the following criteria before you build a SaaS partner program:
- You have found a product-market fit and there’s a reasonable demand for your SaaS product.
- Your customers are organically recommending your SaaS product.
- You have identified ideal partners in your customer base who would benefit from a partnership
- You know which type of SaaS partner program would help you reach your business goals.
- You have identified the key verticals or markets you want to reach through your partnerships.
- You know which strategies work well for promoting your products (which you’ll use to train reseller partners or agents).
- You have the capacity to incentivize ideal partners for the sales they bring.
2. Assign responsibility for the partner program
In large companies, there is a team dedicated to running the SaaS partner programs. For those just starting out, it is wiser to assign the responsibility of managing the partner program to an existing employee, preferably someone from the sales team because they have experience nurturing relationships.
Ensure that this person has adequate support from the Customer Success and Support teams so that they can balance all their duties well.
3. Create a compensation plan
Next, determine what your compensation structure will be, and remember that one of the ingredients of a successful partner program is the type of incentive(s) you offer. The incentive should appeal to your partners and should increase in value as your partners sell more software.
Money is the most common and likely the most motivating type of incentive. You could have:
- A one-time payout for each new referral
- A recurring percentage of revenue brought by each sale. Usually, 15% – 25% per conversion is the standard payout.
Other types of incentives are:
- Sales performance incentive funds, which include gift cards, trips, or high-value gadgets paid directly to the salesperson
- Market development funds, which include the cash that is spent on meeting the sales and marketing goals of the partner
Best practices dictate that you should also offer the following incentives to your most successful partners:
- Spotlights like “Partner of the Quarter” on your website with a physical incentive like a tech product
- Business development training like conferences and webinars
- Lead generation or co-marketing opportunities
- Added promotion of partners and their products/services
- Tickets to external events like matches or concerts, free dinners
- Exclusive partner events
4. Create an application form
Create a simple form on your website wherein you clearly state your offer (i.e. compensation plan) and include a CTA to sign up for the partner program.
Collect just enough information to enable you to verify the partners who have signed up before you accept them. You need to be wary of sketchy partners.
Consider asking the following questions:
- What kind of business do you run?
- Are you a current customer or have you been a previous customer?
- How well do you know our SaaS product?
- How do you intend to market our SaaS product?
- Have you been an affiliate for this kind of SaaS product previously?
- Why do you want to market our SaaS product to your network?
5. Get partners to sign a channel partner agreement
A channel partner agreement lays out the terms for the SaaS partner program and includes incentives, mutual goals, and the do’s and don’ts for partners to promote your product.
Include items like:
- How will referrals get tracked to the partner? (e.g. affiliate link)
- How frequently will payments be approved?
- How will you handle missed customer submissions? (i.e when a customer signs up but does not use the affiliate link)
- What is the acceptable period between referral to purchase when the partner will still get the commission?
Before the partnership begins, both parties must sign the agreement.
6. Choose a suitable PRM software
Partner relationship management (PRM) software like Rewardful and FirstPromoter streamlines tracking and payout and automates the critical aspects of the partner program. They have the following features, at a minimum:
- Analytics and tracking
- Payment integration
- A dashboard for partners
- A leads dashboard
Such software makes it convenient to onboard partners, monitor their activity, and manage the relationships.
Other functions of PRM software are:
- Discovering partners
- Communicating with partners
- Sharing branded sales assets and other resources
- Real-time measurement of the success of your partners
- Fraud prevention and maintaining the integrity of your brand
7. Share resources with your partners
Offer your partners all the resources they need to be successful. This could include onboarding/training materials so partners know exactly what to expect or marketing material like sales enablement content (guides), images for social media, and high-resolution logos to share information with customers.
More importantly, you should offer assistance at a product level such that partners feel comfortable approaching you with challenges or problems.
Other ways in which you can support your partners are:
- Give the same level of support to your partners as you do to your sales team.
- Offer marketing-level support, at least via monthly or quarterly newsletters.
- Complete all payouts on time, even if the amount is insignificant.
- Assign a point of contact for the partners to help them develop a rapport.
- Showcase your partners on your website to demonstrate your trust in them and your intention to mutually promote them.
8. Track the growth of your partner program
By tracking the growth of your SaaS partner program, you can determine when it is time to upgrade. One of the key metrics you need to track is what percentage of revenue comes from the partner program.
Once you have reached a particular milestone such as a certain number of partners being handled by a single team member, you can choose to upgrade your team by hiring someone to manage partnerships full-time.
Examples of SaaS partner programs
Sendoso, a sending platform, has experienced rapid organic growth on the back of its partner program. It offers two programs: the agency partner program and the integration partner program. Among its notable partners are HubSpot, Impulse Creative, and Enboarder.
Sendoso offers a variety of incentives to its partners such as co-marketing opportunities, client discounts, and revenue share (commission). What’s noteworthy is that Sendoso’s partners are experts at implementing scalable sending strategies using the platform and thoroughly understand their customers’ sales and marketing needs.
Pipedrive, a sales CRM tool for SMBs, offers a partner program with three plans: affiliate partners, technology (integration) partners, and solution providers (reseller partners).
Its reseller program has two tiers: Elite and Premier. Partners must pass a certification test and meet quarterly business targets but they are rewarded with a Pipedrive website listing, discount off list price or commission, royalty-free licenses and demo environment, and partner management, onboarding, and enablement training.
Its affiliate program is free to join and there is no minimum sales requirement. Affiliate partners can earn a referral commission of 20% for the first year.
Databox, a provider of mobile-first KPI dashboards for data access and business insights, offers an excellent agency partner program with benefits like co-marketing opportunities, pass-through discounts, inclusion in Databox’s public directory of partners, online training, and the use of a template gallery.
CEO Peter Kaputa created HubSpot’s partner program and has used his experience to refine the partner program for Databox. Interestingly, Databox has embedded its partner program within its product by showcasing, in its partner directory, how partners use the product and by allowing users to download templates created by partners. This provides an incentive for partners to work more closely with the product team.
Unbounce, a landing page building platform, offers three kinds of partnerships in its SaaS partner program: agency, integration, and co-marketing.
Benefits for agency partners include a 20% recurring referral commission, 20% client discounts on monthly or annual plans, listing in Unbounce’s agency directory, branded client sign-up, one-on-one training and support, and free access to Unbounce’s partner management program.
Unbounce also offers co-marketing activities like joint webinars, online summits, case studies, and guest posts.
If you want to go fast, go alone. If you want to go far, go together. This proverb describes SaaS partner programs perfectly. Being a part of the partner ecosystem is critical for growth in the SaaS space because you simply cannot be present for every customer interaction.
By treating your partners as an extension of your in-house team, you can market, distribute, extend, and integrate your SaaS products better than if you go it alone.
Pratik Dholakiya is the Founder of Growfusely, a SaaS content marketing agency specializing in content and data-driven SEO.