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Cannibalism

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.

More Partnership terms beginning with
C
Conversion rate

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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Channel partner program

[chan-l pahrt-ner proh-gram]

Noun

A business initiative that drives revenue through established distribution partnerships rather than direct sales and marketing. Channel partnership programs are common in a wide variety of industries, including software-as-a-service (SaaS). Companies love channel partnership programs because they’re often a more efficient way to drive revenue than traditional sales and marketing tactics. Since partners are tasked with finding leads, referrals, and/or sales, company employees don’t have to generate these valuable business outcomes directly themselves. They simply have to enable partners to be successful.

Channel partnership programs have many benefits. In addition to being a more efficient source of growth, partnerships often help companies access new audiences through their partners. For example, a software company may have great traction finding new customers through paid search ads. But if they partner with an agency that has a roster of clients who are not as digitally savvy (and thus may not find the software company via Google), the company can access a new audience that they previously would not have been able to reach. What’s more, agencies often have built deeply trusting relationships with their clients, so a recommendation from the agency means prospective clients will be primed to trust the software company more.

Example: Rivka drove 45% Acme Corp’s FY2022 revenue through her channel partner program.

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