If you want proof that partnerships work, look no further than the hippopotamus and the oxpecker. The oxpecker, a species of bird from sub-Saharan Africa, is known to ride along the backs of hippos eating insects. It’s an excellent arrangement for both parties: The bird gets to feast on a steady supply of food, while the hippo is delighted to be protected from potentially dangerous parasites.
Similarly, in business relationships, the key to a successful partnership is to find rewards that compel each party to enthusiastically uphold their end of the bargain. While commissions in B2B partnerships are almost exclusively monetary, there are still a myriad of complexities to consider. Should you pay your partners for leads or just for closed-won deals? Should you offer a flat fee or percentage? Should you tier your commission structure to give the best-performing partners a larger cut of revenue?
In this article, we will answer those questions by:
- Providing seven essential questions you need to ask in order to find the sweet spot for partner commission structures for your B2B SaaS business
- Thoughtfully unpacking these key considerations so you can build a solid partner commission structure scheme that mobilizes your partners and drives significant revenue
1. What are the goals of your partner program?
The very first question you need to think on is what KPIs (key performance indicators) are you responsible for driving? You want to align the activities your partners get paid on to your own goals. If your internal KPI is new paying customers, you want partners to receive commissions for that action of driving new paying customers. If your KPI is leads, pay partners for new leads created. If this sounds obvious, it’s easy to get tripped up in practice and err by being too clever.
“A common mistake I see vendors make is that they incentivize for the wrong thing and make partners read between the lines to know what they actually want,” says Nikita Zhitkevich, VP of Sales at PartnerStack. “If you accommodate a partner who asks to be paid on cost per click when you really want leads, the partnership won’t work out.”
See more: The definitive guide to easy partner payouts.
2. What activities will partners earn commissions for?
This may be an easy question to answer if you have clear KPIs. But if you have multiple KPIs or are not sure where to begin it helps to examine the three most common rewards structures. We also recommend stack ranking your KPIs if you have more than one in order to identify the most important ones.
Common commission structures:
Cost per click
With a cost per click model, the vendor pays an affiliate a fixed amount for each click they drive on a link.
It’s worth noting that there’s no guarantee of the quality of the clicks and your affiliate may not be driving clicks from your ICP. This model can be risky if you’re not working with trusted partners as you could pour a lot of marketing dollars into something that may not produce results.
Much like an impression, it can be hard to reliably quantify the value of a click — which is why full funnel reporting is so valuable in quantifying the value of a click. PartnerStack’s PRM helps you back your clicks into an actual conversion rate from click to sign up to transaction to ensure that you’re producing results for your program.
You might also like: Quarterly partner spotlight on 5 opportunities for B2B SaaS in 2025.
Cost per lead
With a cost per lead model, the vendor pays partners a fixed amount for each qualified lead or contact information from someone who is ostensibly interested.
The cost per lead model is a popular commission structure for partner programs. It’s attractive to affiliates since it frontloads their commission as opposed to having to wait until a sale goes through — which can take days to months in B2B SaaS.
Some vendors will implement a means of quality control to make sure they’re only paying out partners for sales-qualified leads who are likely to lead to closed-won business.
Cost per acquisition (also known as cost per sale)
In a cost per acquisition model, the vendor pays the partner on a sale. The commission can either be a fixed dollar amount or it can be a percentage of a sale to account for varying deal sizes. It takes them longer to realize their commission as the partner payouts are directly tied to the vendor making new revenue.
Sometimes the payout is a one-time event, but other times the partner receives a portion of the monthly recurring revenue — either for a fixed period or for the lifetime of an account. Since sales are a continuous event in B2B, with subscription charges continuing to renew month over month this can incentivize partners to keep providing high-quality support to customers in order to retain their business.
The cost per acquisition model can apply to any type of partnership program — affiliate, referral or co-sell. The type and amount of commission you offer should depend on how much they're involved in the sale and the amount of work they’re doing to maintain and provide support to the client over time.
Combinations of commission structures
You can also layer multiple types of commission structures to incentivize what you want with more granularity. Perhaps your ultimate goal is to close sales but you also want to incentivize a high volume of leads. Then you could offer a modest cost per lead while also incentivizing a larger commission to partners down the funnel when a deal closes.
How do I know which model to use?
“For longer sales cycles, we recommend rewarding anywhere in the sales cycle that a partner can influence. An affiliate promoting a $50k ACV product can’t influence buying decisions. So you might want to reward only influenced sales-qualified opportunities,” says Luke Swanek, Co-Founder at PartnerStack.
“You’ll likely want to commission referral partners further down the funnel. And if it's a reseller [or co-sell] partner, maybe you want to compensate them not only for a sales-qualified opportunity, but also when they purchase. You need to think: What level of control do my partners have and how far down the funnel should we incentivize them?”
3. What type of commission will you offer?
While monetary rewards are by far the most common, some vendors also choose to offer leads or marketing development funds as commissions.
Typically vendors will only offer leads as a commission to a small subset of highly successful partners who have proven themselves to be hard-working and trustworthy partners. “Leads have to go both ways. No organization just wants to feed leads to another organization to close, because that is a parasitic relationship. It needs to be symbiotic,” says Zhitkevich. To this end, partners who receive leads may commit to a revenue threshold — for example, they contractually commit to close $50k a year or pay it as a penalty.
Marketing development funds are also a popular commission since they’re mutually beneficial. This can include money to co-run LinkedIn ads, webinar programming, team training or live events. It’s common to offer these types of commissions on quarterly SPIFs or quarterly engagement challenges to motivate partners to drive specific goals on a set timeline.
“Great non-monetary commissions would be: speaking engagements, opportunities to co-market with you, attending a specific event and free swag giveaways,” says Swanek. “Ask yourself: what would your partners find most valuable and beneficial? More importantly, what would your best partners find valuable and beneficial? These rewards should nurture the partner relationship and feed back into the program.”
Related: How to build an affiliate partner program with integrity.
4. How much commission should you offer?
Consider: are you looking to grow revenue exponentially or trying to be efficient? “If you’re looking to grow revenue aggressively, then be generous with your commissions,” advises Swanek. “If you’re looking to be efficient, then be efficient with your rewards.” Being generous with commissions can also help jumpstart the momentum of a new program.
Swanek advises looking at your cost to acquire a customer (CAC) from your traditional sales and marketing channels. Your partner channel should always be significantly more efficient than traditional demand generation channels since the overhead is much lower and you’re already piggybacking off of existing enablement materials.
New programs sometimes make the mistake of offering commissions that are hyper-efficient and not attractive enough to new partners. For example, if your current customer acquisition costs are $500 per customer and you’re only offering a $50 commission you’re likely over-indexing for efficiency as opposed to optimizing for growth.
“When partnership leaders look at just how high their costs are in their direct channels, including the commissions they pay their AEs and overhead costs, suddenly partner commissions become very affordable, very quickly,” says Swanek.
See more: 10 partnership leaders you should be following on LinkedIn.
5. Are there industry parallels that would be a useful starting point?
When building a new commission structure from scratch, it can be incredibly helpful to look at a few examples of successful programs run by organizations comparable to your own.
Ask yourself the following three questions, then look at businesses that would have answered the same way.
- Does your product generate a relatively low average customer value (ACV) or high ACV?
- Do you have a relatively long sales cycle or a short one?
- What type of partner programs are you running? If you’re running two or more, look at different examples for each.
6. If you’re using a cost per acquisition model, will you offer a flat fee, an ongoing percentage or a combination of both?
In a cost per acquisition model you have a few options in terms of the frequency of payout. You could offer a one-time payout of $100 per subscription sold. You could offer a percentage of the sale, like 25% of every sale for the entire lifetime of a customer. Or you could choose a combination of both by offering $100 per subscription and 10% of revenue over a customer’s lifetime.
Swanek often advises vendors to offer rolling commissions because the payments serve as a regular reminder to your partners that they earn revenue when they sell your products. Sometimes with a flat fee, partners become disengaged because they don’t have the continual reminder. Plus a rolling commission incentivizes partners to support customers throughout their journey since they benefit when customers stick around. This can also reduce the burden on your organization's customer success and support functions.
Sometimes a combination of flat fee and rolling commissions can offer the best of both worlds. If you have a low ACV product, say $100 per month and you’re paying your partners 20% for a sale — $20 per month isn’t a ton of money. You may want to consider awarding a bonus of $50 or $100 on the first commission to start strong then offer rolling commissions thereafter.
7. Will you tier your program?
Tiering can be an incredibly powerful tool that allows partners to start off easily and get more and more love as they drive more value. Often vendors will separate tiers by a revenue or leads threshold. For example, bronze partners sell $10K a month, silver partners sell $20K a month, and gold sell $30K. Higher tiers may be commissioned with a higher percentage of revenue — for example, 10% for bronze partners, 15% for silver partners and 20% for gold partners.
Tiers can also serve as a motivational tactic that encourages your partners to constantly strive for the next level. Programs that offer commissions on leads might only give them to the highest tier because once the partner has proven themselves by reaching that level, it makes sense for the organization to invest further in the partnership by sending the partner more business.
Choose the commission that works for your program
While there are best practices that apply broadly, no two businesses are exactly alike in B2B SaaS. By thinking through these questions, you’ll design a commission structure entirely customized for your unique business and goals. It’s worth investing time into because if you, like the hippo and the oxpecker, can figure out a mutually beneficial arrangement, then you’ll have an extremely rewarding journey ahead.
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