If you are a B2B SaaS company, especially one on a growth curve, you are constantly looking for ways to ramp up growth. Once you have secured organic, SEO, as well as paid channels as part of your marketing strategy- you might look to more indirect ones through partners.
So you look around and you keep bumping into various words like, “Affiliate”, “Influencer” and “Referral” Program. And each time you have the same question:What is the difference between each and which one do I need?
By the end of this post, I will provide you with a clear, definitive understanding of each type of program as well as some questions to ask yourself to determine which program is right for your B2B company.
B2B SaaS Affiliate Program: What is it & do I need one?
The term “affiliate” is, in fact, a broad term. At its core though, it’s a person or party that works on a “pay for performance” basis with a merchant or advertiser, whereas: the affiliate gets paid (in $$ commissions) when they send a prospect to the merchant or advertiser, and that prospect performs some sort of action (Like filling out a form, purchasing an account, etc.).
The reason I say the term affiliate can be broad because: full fledged companies can be affiliates but also small, individual bloggers can be one two. It’s easy to have some type of stereotype on what an affiliate is but in my full experience – they come in all shapes and sizes.
Do affiliates have to be my customers/clients to refer others?
Often times – no they don’t. Being an affiliate for a company doesn’t require you to have an account, however I want to take a time out to discuss two types of affiliate programs:
- Open affiliate program – One that is open to the public and clearly advertised on the merchant’s site. Affiliates can sign up and there still may be a vetting process of applications by the merchant. There is usually no requirement to be a customer of the merchant. This is the most popular form of affiliate programs out there.
- Closed affiliate program – One that is not listed publicly and is often an invite-only program. May consist of a few non-customers but most are clients with the merchants (there is a close alignment with closed affiliate programs and referral programs -except with one defining factor which I will explain below).
You can operate either one. #1 works more at scale albeit you vet applications, where #2 takes more time to groom and manage for growth.
Questions to ask yourself if you are considering an affiliate program for your B2B organization.
- Do I want to work with outside affiliates vs. having a closed affiliate program?
- Do I have the budget to pay commissions to affiliates?
- Do I have the resources to manage an affiliate program?
I cover a lot of these questions in this post + video on, “Do B2B Affiliate Programs work?/ check it out to get the full picture.
What is a B2B SaaS referral program and how does it differ from an affiliate program?
The essential, defining factor between an affiliate program and a referral program is: How the referrer gets compensated.
In a referral program, it’s often a requirement to be a client or customer of the merchant and when that referral partner sends over a customer or client to that merchant – they often get compensated in discounts or credits on the referrer’s own account with the merchant.
For example, I might have a referral program for Skype business (completely hypothetical here – not a client, or not real). If I refer another Skype business account to Skype, and the referral uses 10 min of international calling time- I might get a credit for 10 mins on my own account.
I may note it’s important to mention a type of referral program that is really popular you might have come across: a dual-benefit referral program.
How this works is: The referral and the referral partner both get something for each defined action. In the example above that might be: the referral gets 10 free minutes with Skype Business (when they sign up) while the Referral partner gets 20 minutes free (for sending the referral). It’s what ever you define.
Considering a B2B Referral Program? Ask these questions or consider these factors.
- Do I want to keep credit/payment inclusive to those who have accounts vs. paying commissions with an affiliate program?
- Consider a B2B referral program if you have little resources to regularly manage an affiliate program.
- referral programs will have lower growth curves due to the prerequisites it takes to have an account and the non-liquid payoff (i.e. credits/discounts vs. cash).
What about B2B SaaS Influencer Programs? What are they and do I need one?
Truth be told: B2B SaaS influencer programs are not too popular. My observation: Influencer programs stem from B2C companies working with social media influencers to promote products. It’s quite uncommon in the B2B SaaS world simply because a lot of B2B products or services aren’t as sexy.
Even though it is not as popular for B2B companies – I do like to spell out the differences between an influencer program and the others I mentioned above.
Influencer programs might have an affiliate component but they are often much more nuanced and custom based on each individual Influencer. For example, If I have a unique t-shirt business – I might approach a Instagram Influencer (who talks about a variety of t-shirts) with an offer. That offer might include a combination of the following:
- Free products for that influencer.
- A flat rate, upfront influencer fee
- CPA/affiliate component (Cost Per Action – usually a referred sale).
Each Influencer is often given a different pitch based on their audience type and size.
Conclusion: If you were me, which one would you start with?
If you are a startup or small to mid sized business where resources are strapped – I’d highly suggest starting with a referral program. If you want to invest in an affiliate program that might offer more scale – it’s the next logical step.
If you are already a fairly established company (have found direct product market fit) then investment in an affiliate program is a great opportunity to fuel growth for the long run.