Alliance

Noun

[ah-ly-ince]

In business, an alliance occurs between two companies that work together on mutually beneficial projects. These agreements are also called strategic alliances, and they usually involve cooperation in the development, creation, marketing, and sale of products or services or other objectives.

Alliances can either be joint ventures, equity strategic alliances, or non-equity strategic alliances. Joint ventures occur when two parent companies launch a child company together. Equity strategic alliances are created when a company purchases equity in the other. Non-equity strategic alliances are when two companies combine their resources and capabilities to reach set goals together.

Example: The well-known partnership between Starbucks and Barnes&Noble is an example of a strategic alliance. By placing Starbucks stores inside Barnes&Noble stores, each company shares the cost of the space while providing complementary services to customers.

More Partnership terms beginning with
A
Activation

Noun

[ak-ti-vay-shin]

The process of enabling and mobilizing the partners you've recruited to perform valuable activities for your business (e.g. sharing a link, making a referral, or closing a deal.) Many programs will define partners as “active” as soon as they’ve made a single successful referral or sale, but this can vary by program, so it’s worth figuring out what determines whether a partner is truly active in your program. Common partner activation signals include first deal registration, first closed deal, or generating revenue for a set number of months.

Partner activation is different from partner onboarding. Activation requires the active participation of the partner in the program, so it normally occurs after a partner has successfully onboarded.

Example: The newest partner to join RayCorp's partner program achieved activation three months after they finished onboarding when they successfully closed their first deal.

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Average deal size (AKA average contract value or ACV)

Noun

[ave-ridge deel sye-z]

Average deal size is a metric used by SaaS companies that represents the average amount of money that customers spend on a solution. Another way to explain it is the average amount of money a business makes per deal they close.

Average deal size can be calculated by taking the total revenue earned in a given period and dividing it by the number of closed-won opportunities during that timeframe. ACV is often calculated on a monthly or quarterly basis and used as a key performance indicator (KPI) for the business. Average deal size can be a helpful metric to use when evaluating the performance of sales teams, and it can also be used to determine the price points that are most likely to see leads convert.

Example: Luca's company closed three deals in the last month, worth $5,200, $6,700, and $7,000, respectively. He added the value of each deal up to a total of $18,900, which he divided by three to find an average deal size of $6,300.

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