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Commission rate

Commission rate

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.

More Partnership terms beginning with
C
Customer loyalty program

Noun

[kuhs-tuh-mer loi-uhl-tee proh-gram]

A customer loyalty program is an organized system that allows a company to reward customers for their engagement. The company may offer incentives to customers who promote their brand on social media and in real life, refer business, and perform other activities that are beneficial to the brand. In return, the customers may receive points, swag, conference tickets, gift cards, or other rewards.

Many B2B software vendors understand that their customer base is one of their greatest untapped marketing and sales resources. By encouraging happy customers to share their positive experiences with their peers, vendors can leverage customers as a low-cost, highly effective marketing channel. For example, customers may receive points that can later be redeemed for rewards by referring new business. Or customers may receive cash incentives when they generate new deals that close.

Also known as customer advocacy programs.

Example: As ChamomileCorps’ #1 fan, Refika told all her entrepreneurs friends that the software was a must-have and had saved her a great deal of time and money. Since she received 500 points on ChamomileCorps’ Cham-pions program for every referral, by the end of the year, she had received enough points to redeem them for a brand new iPad.

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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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