[ri-kur-ing rev-uhn-yoo]

Noun

Revenue that an individual or company receives on a regular basis and at fixed intervals, as opposed to in lump sums. Two common forms of recurring revenue are monthly recurring revenue (MRR) and annual recurring revenue (ARR), depending on the cadence with which funds are distributed. Both are common metrics that SaaS companies use to track how much revenue they’re earning.

In addition, reseller partners will often receive recurring revenue from software vendors if they sell a subscription on their behalf. For example, if a value-added reseller (VAR) partner sells a software subscription to a new customer, the software vendor may reward the partner with a 20% of the MRR the company receives from that customer each month. 

This mutually beneficial arrangement also incentivizes the reseller to help keep the customer happy because the longer they keep renewing their subscription, the more passive income the partner will earn. Companies benefit massively from this, as it takes some strain away from their customer support and customer success functions.

Also see: Reseller partners.

Example: The CEO was thrilled to see annual recurring revenue increase nearly 20% after the product marketing team rolled out a pricing update.

Example: As a small agency, X-Factor Marketing was eager to add sources of recurring revenue through partnerships to offset some of the instability of their project-based fee structure.

Noun

[ree-fur-ahl ah-gree-mint]

A referral agreement is a legal contract that defines a partnership between a service provider and a referral partner that earns commission on sales. The contract sets out the terms of a partnership wherein one party is referring qualified leads or customers to the other partner in exchange for rewards or compensation.

Referrals are an effective method of increasing lead acquisition and sales, and a referral partnership is mutually beneficial as one partner sees increased sales and the other earns a cut for their leads. These partnerships are governed by referral agreements to ensure each party is clear on the terms of the partnership, what will be done in the event of a dispute, and how the partnership can be terminated if desired.

Typical inclusions in a referral agreement include (but are not limited to) terms, audit rights, intellectual property, confidentiality, and dispute resolution.

Example: It took Lucy's lawyers a while to go through her referral agreement with Lookster, but once it was signed, she was excited to celebrate (and start earning commission on her leads).

Noun

[Ree-fur-uhl link]

‍A referral link is a unique UR used by customers in referral programs to promote a company's brand and products. Customers enrol in a referral program, are given the referral link by the vendor, and then can use that link to drive traffic and sales to the vendor. The customer gets a cut of profit made from traffic to the link.

Example: When I signed up for the online course, I received a unique referral link that I could share with my friends, and for each person who enrolled through that link, I earned a discount on my next purchase.

Noun

[ree·fuh·ruh pahr·t·nur]

‍Referral partners send qualified leads for your team to close and earn a percentage of the revenue when a deal goes through. The audience of a referral partner is not as large as that of a marketing partner, but a referral partner typically know more about the people they are referring, often having a direct one-to-one relationship, meaning the leads they send tend to be highly qualified.

Example: My B2B SaaS business has a referral partner program where we collaborate with other companies to refer clients to each other, creating a mutually beneficial relationship.

A referral link is a unique trackable link assigned to a partner. This is the link partners use to promote your product. Any conversions made through that link will be attributed to the partner and logged on your partner platform to facilitate payouts.

A reseller partner sells a vendor’s product directly to their client. In contrast to the relationship between affiliate/referral partners who are involved only at the start of the customer’s journey (it gets handed off to the vendor), a reseller partner owns the whole customer relationship.

Resellers are the most complicated partners to work with, and for good reason! They give you access to a relatively limited but highly qualified audience. This is why they often require more support and enablement resources.

Also see: Affiliate partner, Referral partner

Noun

[ree·seh·lr prow·gram]

‍A type of partnership program where channel partners fully manage the sales cycle from lead generation to closed/won business. Reseller programs are a way to reach a new customer base through indirect sales, with reseller partners selling to the end customer on the behalf of a SaaS company to earn commissions or revenue shares on those sales. Typically, they'll get higher rewards than any other type of partner to acknowledge their greater effort. Reseller programs take greater effort to set up, as comprehensive resources and training are needed to set partners up for success.

Example: Since reseller programs take the most level of training investment, they are typically reserved for the highest-quality partners, often those who have graduated from a referral program.

Noun

[ruh·turn awhn uhn·vest·muhnt]

ROI, or return on investment, is a valuable metric in sales. It measures the profitability of an investment, which could be a marketing campaign, sales initiatives or skilling of employees. In B2B SaaS, a good ROI is considered about three or five times the investment.

ROI is expressed either as a fraction or percentage.

The calculation for ROI is: 

Net income / Cost of investment x 100

Example: To increase sales, CopyFX invested in a new affiliate marketing campaign that involved training materials, email templates and more. The investment of the campaign was $5,000. After three months, the affiliate partnerships saw an increase in revenue by 33%, resulting in $25,000 more in revenue for the company. The ROI for the campaign was 500%, making it a smashing success.

A reward structure where the revenue generated from a deal is shared between a vendor and a partner. For example, if a $50,000 deal is closed, the vendor may keep 75% and give the partner 25% for a payout of $12,500.

The payout partners receive for generating leads and revenues. It's almost always monetary, but can occasionally take the form of leads, giveaways, or marketing funds.