[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.

Noun

[kaast pur sayl]

‍Cost per sale (CPS), sometimes also known as pay per sale, is a performance-based pricing model used in for partner marketing and affiliate partner campaigns. It measures the dollar amount  a business pays to generate a sale or acquire a paying customer to their software.

If a partner program's main KPI is CPS, the benefit is that the partner will only get paid  when a sale is successfully completed, meaning revenue for both the partner and company. By paying only for actual sales, CPS minimizes the risk of ineffective campaigns or inactive partners. This model encourages publishers and marketers to enhance their promotional efforts and target audiences that are more likely to convert, driving profitable sales for both parties involved.

Implementing a cost per sale model requires careful tracking and monitoring of conversions. By accurately measuring the cost per acquisition and the revenue generated, advertisers can evaluate the effectiveness of their marketing campaigns and make data-driven decisions to improve performance.

Adopting cost per sale (CPS) as a pricing model can provide SaaS companies with a reliable and performance-driven approach to their partnership ecosystem and affiliate marketing efforts. By leveraging CPS, you can align your marketing strategies with measurable results that are tied to revenue dollars and ensure you're achieving a higher ROI.

Example: Raol's B2B SaaS company implemented a cost per sale (CPS) model to ensure that their marketing efforts are directly tied to revenue generation, allowing an optimization of  customer acquisition costs.

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