Cost per Sale (CPS)
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.
The Anatomy of a High-Performing Referral Program
Noun
[cuss-toe-mur am-bass-a-der]
A customer ambassador is a satisfied customer who takes on a special role helping promote the company and its offerings to their peers. Customer ambassadors have experience with the product, believe in its value, and are willing to recommend it to others. They sometimes contribute to customer case studies, webinars, and other promotional activities for the company.
Customer ambassadors are an extremely important avenue of promotion since personal endorsements and recommendations are so highly valued in a buyer's journey. To spot customer ambassadors, look for successful, highly engaged customers who refer business to you.
Example: Kelly noticed a particular customer was the referral source for several new leads. She reached out to the customer and found they loved the product. Kelly invited the customer to participate in a webinar. Voila, a customer advocate!
Noun
[churn]
Churn, specifically in B2B SaaS, is the rate at which customers cancel or discontinue their use of a software service. Churn is an important metric to measure because it is more cost-effective to retain current customers than acquire new ones.
Reducing churn and increasing retention is often an important goal for SaaS organizations, as they increase the customer lifetime revenue and overall company revenue.
Example: By pursuing high-quality leads from partners, Shari was able to build trust, increase customer satisfaction and reduce churn at her organization.
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