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MenuIs 30% of initial and ongoing subscription revenues a reasonable percentage for Resellers of a SAAS Product?
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From everything I've seen, 20-35% is definitely the sweet spot. It certainly depends on the price point and some people start lower but build in incentive criteria to bump the percentage up after a certain milestones have been met.
I've seen SaaS companies pay 20-30% recurring lifetime commission for simply referring a paying customer.
If they are going to be attending trade shows, providing localized Clinical & Technical support it sounds almost too good. I'd be concerned that they have enough margin to actively promote and support your product.
I'd also want to set sales targets in any reseller agreement to give yourselves the ability to terminate weak performers.
Happy to jump on a call to discuss.
There are many factors to be considered here.
1. Compare the cost: How much does 30% cost against the anticipated LTV (lifetime value) of your customer, versus the CPA (cost per acquisition of a customer) using "traditional" marketing like ads, or sales teams etc. If the 30% is less than or equal to the typical CPA to onboard a customer then you're winning either way. Nothing to lose.
2. Added value: 2 things that matter A LOT with marketing, social proof, and reputation. People buy from people. You've probably heard it before, but it is true. And if "experts" in the field have wide reach (following) and great reputation, then it's INVALUABLE. You will have a hard time getting to that stage from scratch. It'll just take a long time and lots of effort pushing awesome content. If it turns out the CPA is higher (See (1)) then it might still be worth it for the nod in your direction from the reseller (IF they're an expert and using their influence to sell your product).
And subjectively, 30% isn't a lot in my opinion. If you earn, they earn. If your margin is high (which it should be for Saas in general due to low costs of goods (aside from salaries)) then it's worth it in my opinion. Referral marketing is powerful, when done right...
I hope this helps!
Stefan
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I'm a product developer, startup veteran, and advisor to SaaS companies. Hopefully you've been already developing this new product with input from your existing customers, letting them beta test it and give feedback. (If not, my advice is to STOP immediately and get enough pilot customers involved to be sure that you're delivering something really valuable to them, that works the way they expect it to work, is easy to understand and get started with, etc.. The last thing you want is to do a big splashy launch of a product that is D.O.A. because you built what you assumed the customers wanted instead of they actually demonstrated that they wanted.) OK, so let's assume that you've got customers in the loop. Interview the heck out of them. 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Now I can spend that time where I really want to, with my kids ( ... my cat ... my golf buddies ... )" You're doing this for three reasons: 1) This stuff makes for phenomenal testimonials; 2) it helps you come up with great ideas for pre-launch content; and 3) it generates *PURE SOLD GOLD* you'll use in writing the copy for your launch offer. OK, launch mechanics. There are people who teach huge long expensive courses on this stuff. I'll give you the Cliff's notes. While I haven't personally run a major product launch, I have been trained in the strategy and am very familiar with it. - Plan your launch period in advance. You might want to do a pre-launch sequence that lasts 1, 2, even 3 months depending on the magnitude of your product and how much effort you're willing to put into creating content for the launch. - Create some teaser content of interest to your customers who might want to buy this product. Offer to teach them something, or offer to give them a sneak-peak behind-the-scenes of your new product. - Send an enticing offer for this content out to your list. Get people who are interested in this content to sign up for it. This creates your launch email list. - Send your launch list weekly updates: development milestones, sneak-peak screenshots, videos, educational material, interviews with/testimonials from beta users, and so on. - You're not trying to sell here yet (not hard sell at least). Drop some hints that there is going to be a special offer when the product launches, just for special loyal customers like them. - Create at least three videos on topics that are really, really interesting to your prospective customers... not necessarily about your new product itself, but teach them about what they can achieve with it, or what others have achieved with it already. As you publish these videos, send the link out to your launch list. - Also send out an offer to see these videos to your main list, to entice more people to sign up for your launch list. - As you get closer to launch time, keep sending frequent updates to the pre-launch list, and send another email out to your main list to let them know that the product is launching soon, and that if they're interested in the special one-time-only launch pricing, they need to sign up for the "early bird list" (your launch list). - Send out a 24-hour notice that the launch is going to happen soon, and the launch pricing will only be available for a limited time (potentially, to a limited number of customers ... to increase scarcity and urgency). - I recommend that even if you plan to open the product up to all your customers that at launch time you limit it to a smaller number. This makes the inevitable post-launch gremlins less painful to deal with because you have fewer customers, and it motivates people to buy because they fear that they'll lose the opportunity to do so. You can open the product up to more people later... the delay will result in pent-up demand and easier sales. - Start the launch. Tell your early-bird launch list a few hours early, then tell your main list. Direct them to a web page with a video and long-form sales copy of your launch offer. - Send out 2-day, 1-day, 12-hour, etc. notices that the launch is ending soon and reminding people what they're missing out on if they don't act now. If you're offering a limited number of spots, tell people what percentage has already sold out. Remind people that if they're "on the fence" about this, that this is the time to make a decision. - Send out an email letting people know that the launch is over and thanking them for their support and their vote of confidence. Tell the people who didn't buy (or didn't get in) that you'll let them know that the product will be opening up for new registrations some time in the future. (You may get people sending you emails begging to be let in at this point, if your product is desirable and your marketing was executed well.) And, of course, you don't just have to promote your launch content to your existing customer list ... you can post it to social media (and encourage your customers to do so) to attract brand new customers into your world. If you'd like to go into more detail about launch planning for your specific product and market, I'd be happy to jump on a call and talk about ways to make this work for you.BB
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