Embracing Affiliate Marketing In SaaS

Embracing Affiliate Marketing In SaaS

With more organizations migrating their data and infrastructure to cloud servers, Software-as-a-Service (SaaS) is gaining traction and becoming salient to digital marketing success. Software as a Service Industry vertical has already grown by 500%. A rough estimate suggests that the global SaaS Market will reach a staggering figure of 197$ billion by 2023 and hit the mark of $232 billion by 2024.

For This, Let’s Understand What Is SaaS First: SaaS is a software delivery model where we deploy applications over the cloud on a subscription basis. Instead of traditional ways of installing software on individual computers, customers pay for only the services they require and use based on their personalized requirements or demand basis. It is a cost-effective, scalable, and flexible move without installation and maintenance costs and hiccups.

What Is SaaS Marketing?

In SaaS marketing, one must indulge in promoting subscription-based products and services of a company with the sole intent of achieving higher conversion rates and lead generation. It provides customers the benefit of paying on a rolling basis vis-a-vis fixed monthly payments.

How Does SaaS Differ From Regular Marketing?

Rather than selling a physical product, SaaS marketing sells an intangible service emphasizing customer retention and strengthening existing relationships. Marketers must provide valuable information to existing customers, offer them exclusive deals, reward them for loyalty, provide relevant service, engage with them across various channels, and inform them of product updates because mostly the profits come from existing customers.
It goes in parallel with acquiring new leads. To maintain a healthy relationship with any customer, new or existing, one has to remain conscious enough to respond to their needs.

What Are The Challenges In Standalone SaaS Marketing?

Standalone SaaS marketing is a novel concept without the details of a target market. Even the SaaS strategy does not clearly outline the product definition. The benefits and features of this technology remain undiscovered. SaaS is new in the market, and many new customers are dithering to use the subscription-based service of SaaS for their business. Establishing trust among the audience for small businesses and start-ups is a challenge.
Above and beyond, there is a glut of SaaS-based products in the market. They appear to be in the same ballpark as the other products or services hence differentiating them from the rest of the crowd is a prickly situation. There is no clear-cut pricing strategy identified for these products.

A new normal in SaaS marketing is the inclusion of affiliate marketing strategies, hence coined the term SaaS Affiliate Marketing.

What is SaaS Affiliate Marketing?

SaaS Affiliate Marketing is a referral-based partnership that leverages the services of publishers such as deal sites and bloggers, and in turn, we duly reward them. The SaaS industry relies heavily on the vast network of influencers and industry experts as affiliates to advertise its services. Merchants reward these partners for bringing potential customers to their businesses. It can be cash rewards and special product discounts or even offer access to the company’s marketing kit.

What Are The Virtues Of Affiliate Marketing In SaaS Business?

Affiliate marketing does the heavy lifting for SaaS businesses and helps businesses retain existing customers and tap into new customers. Furthermore, subscription-based SaaS enables businesses to generate recurring revenues. Here are the other primary reasons for leveraging the power of affiliate marketing in SaaS :

  1. Increase in the basket of customers: With social media presence and blogs, one can increase the spectrum of their reach. Influencer clout and word-of-mouth referrals both contribute to long-term customer relationships. Additionally, it allows you to tap into untapped markets and scale new heights in your business. Offering a freemium or free trial in your subscription model gives users access to a few of the basic features of your platform and turns them into paying customers. It can help you lower your Customer Acquisition Costs (CAC).
  2. You need not dig deep into your pocket: Affiliate Marketing in SaaS does not require you to dig deeply into your pocket. You do not have to pay any upfront fees even if there is no business. It helps when you have a tight budget. Hence, you will pay affiliates only when they generate a sale.
  3. Laser-focused Traffic: Affiliate marketing inclusion in SaaS focuses on a selective list of targeted customers who are genuinely interested in your products or services and that weeds out irrelevant or poor-quality traffic. These motivated customers are the ones who have a substantial vested interest in your services.
  4. Increased trust and loyal customers: Your existing customers are the ones with whom you have struck a chord, and hence they will be the evangelists for your products. They will patronage your services by recommending your services to their social network. For any new user, SaaS Affiliate links from a trusted partner look more like a suggestion from a reliable source rather than an advertising tactic or a gimmick. It will add to the social proof of your audience.
  5. Zero Risks Involved: With a well-crafted marketing strategy in place, you make the most out of your program by reaching out to the correct prospects and building upon your reputation, and with the right tools in place, we eliminate all sorts of risks. Be it reputational or financial risk.

Affiliate Marketing In SaaS: A Reseller Or A Referral-Based Partnership Approach?

Reseller-based partnerships have been an archaic form of partnership which no longer prevailed in today's times. Leads generated by referral partners have a modest conversion rate of 3.63 percent, while transactional marketing practices have a low conversion rate of 0.48 percent. By leveraging the resources and expertise of these partners, one can see their business see the light of day with an enhanced online presence on social media.

Affiliate marketing in SaaS partnerships can be industry-wide associations or brand-to-brand or co branding partnerships. With the reseller-based approach going out of the radar, there is no room for transactional partnerships like distributors, vendors, retailers, value-added resellers, and other partnership forms.

Reseller-based software often lacks a robust system for handling the attributions. How to reward partners for driving business, how will commissions be paid, and how can fraud be detected? Managing all these attributions becomes difficult in these reseller-based systems.

However, Referral based partnerships of SaaS Affiliate Marketing consider the above features and are here to stay for a long time. With time, it has come into its own and established a solid foundation. In the coming years, all business-to-business transactions will be driven up by referral partnerships, according to a renowned source. This partnership model will touch all customer-facing businesses, such as marketing, sales, dining, and retail.

Referral Partnerships Turning The Tables Over Reseller Partnership Approach

Partnerships Based on Referrals of Affiliate Marketing in SaaS are hard-won, as they take a long time to build a community of like-minded individuals. However, when a battery of partners like organizations, publications, opinion leaders, and experts sit up and take notice of your offerings, this sets the ball rolling for the generation of qualified leads.

They espouse your brand to a larger audience, and their recommendations will bring your products in a favorable light to new buyers. Eventually, you build your business from scratch to grow at scale.

Referral-Based Partnerships of Affiliate Marketing in SaaS result in faster conversions and higher conversion rates. It improves your business visibility on social media and content marketing channels and strengthens your SEO footprint.

When you start understanding the needs and interest areas of your new customers more microscopically, it amplifies the trust factor with them. Accordingly, you may go all guns blazing by targeting them with more precise retargeting messaging and positioning to turn the tide in your favor.

Referral partnerships of SaaS Affiliate Marketing make more sense because buyers prefer online research to learn about a partner's offerings rather than visiting third-person resellers.

Also, Referral Partnerships of Affiliates in SaaS result in high conversion rates as they are less risky and cost-effective. They are more tuned to reflect the exact customer preferences, needs, and interests and result in gaining more insights about them, deducing what a prospect is looking for in a product, what are their whims and fancies and accordingly conforming to that more realistically. It makes referral partnerships more appealing than the reseller-based model.

Moreover, in referral-based partnerships, partners are duly incentivized with every freemium user sign-ups or when a customer elevates to a higher package plan. Hence, these partnerships appear as a more lucrative option than reseller partnerships. As a SaaS provider, you can offer your customers a tidy sum of subscription models like flat fee subscriptions, package-based subscriptions, per-user pricing, custom pricing, free trials, and freemium.

How To Launch An Effective SaaS Affiliate Program?

Drawing parallels between affiliate programs will help your SaaS Affiliate Programs get off and running. Accordingly, set a baseline commission for affiliates or partners promoting your products with room for bonuses and other perks to keep them stay motivated:

Let’s take stock of the various options in the SaaS Affiliate Program:

  1. Chalk out a well-structured commission structure:
    It includes one-time commissions, recurring commissions, and tiered and non-revenue-based commissions.

    One-Time Commission Structure: The affiliate receives a one-time payment in SaaS Based Affiliate Program for every user who signs up on your landing page.

    Recurring commission: Recurring commissions are commissions paid to affiliates regularly. The affiliate commission is paid to affiliates once every few weeks or months according to a frequency cap. When users purchase a service for a limited period, affiliates receive payment for each purchase.

    Tiered commission: Commission is paid based on specific tiers. These tiers can be like this
    50 users - 5% of each sale
    100 users - 7% of each sale

    Non-Revenue Commission: This is a non-monetary payment in the form of vacation gift cards or allowing affiliates to access the premium services of products for free.

  2. Become the Purveyors of your SaaS Affiliate Program Offerings:

    1. Start promoting your products and services with an illuminating website and appealing landing pages. The website must contain necessary details on program rules and commission amount etc. You may start spreading the word about your SaaS Affiliate Program Offerings through banner ads, pop-up ads, display ads, popunders, native ads, and push notifications.
    2. Email marketing to customers will keep them in the loop about information related to new products, discounts, etc. Also, dish out necessary information through newsletters and follow-up emails to keep them updated at all times. Emails with promotional offers can help to nurture leads and stand out to catch the eye of your readers. It should be short and crisp to generate sales and turn your audience into potential customers.
    3. Paid Advertising using PPC Ads and social media channels: These platforms can further become the talking point for your SaaS Affiliate Marketing Business wherein you run online advertising campaigns, track real-time audience data, and create an e-commerce shop, all under one hood.

  3. Hunt for Top-Notch partners:

    Social media channels will help to hunt the befitting SaaS Based Affiliate Partners. These include bloggers, influencers, podcasters, niche experts,affiliate networks with a significant social media presence. It will help you to handpick the right partners based on their content, follower list, and a matching buyer persona.

  4. Create Marketing Assets for your Affiliates:

    Start creating dedicated marketing assets which scream about your brand. These assets include banners, images, videos, case studies, ebooks, webinars, customer testimonials, guides, social media posts, logos, product demos, text links, awards, and other imagery.

    Post creation, do not forget to share the same with your SaaS Affiliate partners. Make them primed about your business through regular product updates or changes concerning your software.

  5. To Track Performance using well-calibrated KPIs:

    KPIs set a definite benchmark to measure your performance against established goals. Moreover, it ensures that an even playing field is created for everyone in SaaS Affiliate Marketing and gives the business a proper shape. Commission rates are decided based on these KPIs.

    The most commonly used KPIs are Conversion rate, Return on investment (ROI), Affiliate revenue per quarter/year, The number of sales per affiliate, Customer lifetime value, etc.

Tips For Creating An Effective Affiliate Program For Your SaaS Company

  1. Ability to Incentivize each Affiliate: No longer rewarding affiliates for each sale they generate will lead to the failure of your SaaS Affiliate Program. The best way to light a fire under the affiliate's belly is to offer them attractive commission rates,organize rewarding contests, bonuses, discounts on products or services, free software licenses, etc. This strategy will act as a sales funnel that helps you convert leads into paying customers.
  2. Cherry-picking the Models: Plump for the models like Cost-per-sale (CPS), cost-per-click (CPC), revenue sharing, etc.
  3. Make affiliates conversant with the Rules and Policies: Before kicking off the program, you must lay out clear guidelines and a framework for the operational aspects of the affiliate marketing business. This includes defining the norms of pricing, commission, discount or offers and deals details, use of logos and reference materials, and any other aspect of promotional activity.

Where To Find SaaS Affiliates?

  • Existing customers: Your existing customer list and fan following can make it count for your business. They are the staunch user base who have been using your services for a reasonable time and are naturally suited to be the next Affiliate marketers for your SaaS business. They are better to engage and strike a chord with new customers by throwing the right light on the products as they have thoroughly sized up your existing products and are well acquainted with the upsides and flipsides of your services. They will be the ideal customers to do all the required tom-tomming of your products correctly.
  • Social Media Users and Followers: You may be able to draw in a considerable number of social media users and followers who have shown interest in your niche. You may look under the hood of your social media customers’ preferences and needs. A close vigil on their online activities will help you arrive at a conclusive decision of choosing which ones among them as the potential SaaS Affiliate Marketers. It is ideal to select the ones on the likes of your niche.
  • Influencers and opinion leaders: These influential people are the cult figures that can bring your product into the limelight among swathes of people. They cut through the noise with their devastating persona and clock in immediate sales. People swear by their words and actions and accordingly gravitate towards them. So, undeniably, why can't you make a solid case for your product to hog the limelight amongst a large segment of users?

Importance Of Performance Marketing Software In SaaS Affiliate Marketing

A well-rounded performance tracking software is indispensable for your business to launch, manage and optimize your affiliate referral programs in SaaS. They are the best affiliate marketing software for SaaS as they individualize the campaigns based on business needs. Moreover, they calculate commissions, track conversions, gather real-time analytics data and provide vital statistics to the letter. Based on the output of these softwares, you may accurately assess the performance of affiliates and reward the top-performing affiliates on a timely basis. If you are bereft of the correct software, you may be on the line of losing potential business.

Finally, this performance-based affiliate marketing software in SaaS acts as a watchdog to your system and can keep your marketing expenses in check. You only pay the affiliate when they can usher in new customers who bought or subscribed to your product. It reduces your CAC and, eventually, has an upside bearing on your revenue.

Besides, tracking performance and customizing the software to maximize success becomes a low-hanging fruit with automated reporting tools.


SaaS and Affiliate marketing are like a match made in heaven. The best of these two worlds can catapult your business to greater heights as there is too much potential out of these two prolific marketing practices. Though there are underlying challenges with this combination, however, its benefits somewhat more than make up for it.

Affiliate marketing in SaaS business has an enduring lifespan with conversions resulting in higher profit for your affiliates. However, it requires one to remain patient instead of expecting quick returns. If you want to increase brand exposure, acquire new customers, or improve customer retention, then SaaS affiliate marketing passes muster in all these categories.

The bottom line is that you must harness the symbiotic relationship between SaaS and Affiliate marketing to make more money and strengthen customer relationships.

Last but not least, follow the guidelines of this blog post before diving into SaaS Affiliate marketing.

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