Commission structure
Noun
[ko-mish-un struk-tchur]
A commission structure is how a company compensates partners based on the revenue they generate for the business. Partner programs pay partners based on the sales they close, the traffic they drive, or the qualified leads they send to the program. The commission structure defines how much a partner is paid for those actions and how much that pay increases with increased revenue generated.
Partner programs should strive to develop a commission structure that is compelling and progressive. A compelling structure with appealing rewards can help drive interest and signups for your program, and a progressive commission structure continues to adequately reward high-performing partners for their share of revenue driven. Note that commission structure usually varies between partner types; affiliates who drive leads may earn less commission per lead, whereas resellers who have more hands-on involvement in the whole sales process usually would earn more.
Example: Reid's partner program paid affiliates 15% of the value of their leads generated and resellers 35%. His commission structure then increased the share paid for high-performing partners sending many leads and closing many sales.
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The Ultimate Guide to Partnerships for Ecosystems in 2023
Verb
[ko·maar·kuh·tuhng]
Co-marketing is core to partnerships. It is the act of two similar businesses joining together for a mutually-beneficial marketing partnership in order to reach new potential customers.
Co-marketing is often used interchangeably with the term co-branding, however co-branding requires that two companies join together to market a new collaborative product, while co-branding does necessitate the companies creating a new product. Instead they are using the partnership to market their already-existing owner service or product.
Example: Rajit developed a co-marketing campaign to expand his company's reach by working with a business that targeted a similar ideal customer.
[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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