Cannibalism
Noun
[canna-bal-izm]
Cannibalism (also called product or market cannibalism) occurs when a product released by a company competes for market share with an existing product of theirs. The new product "eats" demand for the old, reducing sales and profit of their existing product. Some amount of product cannibalism is expected with new product launches, and companies normally consider the financial risks and rewards of releasing new products carefully.
Cannibalism can result in overall positive or negative effects on a company's bottom line, and can be either intentional or unintentional. When it's intentional, it's referred to as a cannibalisation strategy.
Example: Leo's team released a new file sharing software, but it soon became apparent that the demand for their other file sharing softwares was plummeting in favor of the new release. They'd caused cannibalism by putting out a product that ate up demand for their other products.
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The Ultimate Guide to Partnerships for Ecosystems in 2023
Noun
[ko-mish-in ray-t]
A commission rate is the reward or payment associated with either a percentage of sale or payment. In partnerships, partners can earn commission on either qualified leads or on closed sales. The commission rate is the percentage of the value of that lead or sale that is paid to the partner.
The commission rate you offer should depend on how much the partner is involved in the sale, as well as how much work they’re doing to maintain the client over time. For example, you may choose to give affiliates a commission of 15% for one year, but give resellers 30% for the lifetime of the account, because they're doing much more work to sell and maintain that account over time.
Example: Giro's partner program paid a commission rate of 25% to resellers, who did more work to close a sale, and 15% to affiliates, who did less work to produce leads.
Noun
[con-vir-shin rayt]
A conversion rate is the average number of conversions per ad interaction as a percentage. Remember that a conversion is a desired goal of an ad, often a website visit or sale. Conversion rate can be found by dividing the number of conversions by the total number of ad visitors and multiplying by 100 to get a percentage.
While desirable conversion rates vary greatly by industry and business model (the average conversion rate in Google Ads is 4.40% on the search network), a high conversion rate can be indicative of a successful ad campaign.
Example: Mikaela was calculating the conversion rate of her ad campaign. There were 1100 conversions out of 35,600 total ad interactions, yielding a conversion rate of 3.09%.
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