Anyone running a SaaS partnership program knows how essential automated partner payouts are and how much of a time sink manual payout processes can be. An effective partnership ecosystem often involves a diverse array of partners, with varying partnership types and reward models to adhere to. This can make tracking and sending payouts complex, often requiring multiple employees to spend upwards of 40 hours per month managing the process. A whole week of working time just to get your partners paid? There’s a better way.
For partners, incorrect or late payments can be a huge frustration. PartnerStack helps manage indirect sales ecosystems by automating and taking the work out of partner payouts for both vendors and partners. We spoke with PartnerStack Product Manager Ajay Bala to dive into the world of automated partner payouts at PartnerStack and learn how this process can save vendors time and resources and increase partner satisfaction through transparent and timely payouts.
What are some common partnership payment models, and how do they work?
The most popular SaaS partner program types are affiliate partner programs and referral partner programs. Reseller programs are also offered as an add-on through PartnerStack. For most partnership types, Bala shares that there are a few common reward structures:
- Revenue-sharing model: In this model, for every customer sign-up, the vendor will pay a set commission to the partner (ex. 20 per cent of a yearly subscription fee)
- Flat structure model: For every customer sign-up the vendor would pay the partner a flat reward (ex. $100 per sign-up)
- Month-to-month reward model: In this model, the reward is broken into payments that are made at regular increments (ex. A one-year subscription in which the partner is paid 30 per cent of the subscription for each month, rather than a lump sum for the entire year-long subscription)
As a bonus, vendors may choose to offer challenges to their partners to drive accelerated growth or re-engage with inactive partners:
- Challenges: These are one-off incentives that vendors can initiate to incentivize partners (ex. If a partner refers 20 customers over the next month, the vendor will double the value of the current reward)
Related: What is co-selling in a partnership ecosystem, and how can you do it?
Common pitfalls of manual payouts for SaaS companies
With so much nuance involved, manual payment calculations are both time consuming for the vendor and offer very little transparency to partners. Bala notes some of the downsides of manual partner payouts (for both the partner and vendor) include:
- Bandwidth: The vendor must allocate many hours for documentation and tracking, sometimes among multiple team members, in order to reconcile all the partner account data
- Risk of error: Tracking and aggregating data can result in human error
- Lack of visibility: Partners have very little visibility on the rewards they would receive, with no ability to live track
- Irregular payment intervals: Without an automated payment schedule, partners have no visibility into when they will receive their next payout from the vendor
The process of automating partner payouts
Bala shares the automated process that helps solve these problems for both vendors and partners of the platform. Based on the reward structure models outlined above, vendors in the PartnerStack ecosystem can set up triggers, which are automation tools that generate rewards for a partner. He explains that this reward triggers instantly so both vendors and partners don’t have to wait until the end of month for tracking; it will show up in their PartnerStack dashboard instantaneously. As a partner, you will be able to see the reward, the amount, and the vendor it's received from. Similarly, the vendor will be able to see the reward, the amount, and the partner, which makes tracking ROI of each partnership simple and seamless.
Bala mentions feedback from a PartnerStack vendor on this process: “PartnerStack is automating our extremely manual program. This partnership is going to save us countless hours of contracting and payouts.”
Vendors can choose to make payments weekly, monthly or quarterly (with the most common payment interval being monthly). Bala suggests that a monthly payment schedule could look like this:
- September 1 to 30: Live updates of all rewards within your PartnerStack dashboard
- September 31: Payment invoice is automatically generated and emailed to the vendor
- October 1 to 7: Vendor reviews invoice
- October 8: Vendor invoice charged
- October 8 to 12: Payment processing period
- October 13: Funds available for the partner to withdraw
Learn more about reward payments here.
Read more: How partnerships can fit into your business’ org chart (with helpful examples!)
The benefits of automated partner payouts in B2B SaaS
Automating partner payouts creates more visibility and ease for both the vendor and partner. Bala describes a set of benefits for both parties:
Benefits to the vendor
- Reduced amount of time on partner payments. Typically, vendors can go from 40 to 50 hours devoted to partner payouts to just two hours per month (usually spent reviewing invoicing)
- Automated payments automatically detect and flag fraudulent activity
- Accurate data reporting with all rewards fully transparent and exported as a CSV file monthly
- Easy-to-use dashboard for realtime reporting
Bala shares another tidbit of vendor feedback that speaks to these benefits, saying, “Payouts and contracts are always clear and on time. I never have to worry about the payouts from [PartnerStack]. Always on time, and automatic.”
Benefits to the partner
- Full visibility of their earnings throughout the month in the PartnerStack dashboard
- Regular timely payments and accurate estimates of when funds will be ready to be withdrawn
Bala notes that partners will very often be part of multiple partner programs, sometimes with multiple logins. PartnerStack can bring a host of programs under one roof, making it easier to track results and consolidate payments.
Both vendors and partners can benefit from the time and stress saved with automated partner payouts. Vendors just need to review payments in their dashboard on an occasional basis and let the automation do the rest, meaning more of your valuable time to grow indirect sales and less on account management. Partners know their rewards are coming on time and in the right amount. It’s a true win-win!