Why SaaS affiliate marketing makes sense for entrepreneurs

Affiliate marketing is one of the fastest-growing money-making ideas of the Internet era. With a phenomenal growth rate over the past decade, it has helped businesses across different industries find new customers at excellent RoI. It has also paved the way for a new generation of astute and entrepreneurial marketers to build successful careers. 

Affiliate marketing constitutes 10 to 20% of the advertising spend in industries like fashion, sports accessories, health/wellness, and beauty. While it is obvious why affiliate marketing can be a massive draw in the consumer industry, is it effective in a niche B2B segment like SaaS?

What is SaaS?

Software as a Service is a software licensing and delivery model in which software is licensed on a subscription basis. SaaS products are also centrally hosted on the SaaS provider’s servers (unlike on-premise software). Customers can access the products from a web browser or mobile application rather than having their users install or download a copy of the software. 

SaaS products are especially more attractive for New Age businesses than the traditional on-premise software. The subscription model (monthly or annual), the easy setup, and scalability have long revolutionized how companies use and pay for software. 

Affiliate marketing for SaaS products

For affiliate marketers who are new to promoting SaaS products, it might seem complicated and tricky at first—but once they get the hang of it, opportunities are aplenty. SaaS products are continually changing: they evolve almost every month, with new features and updates being shipped out. Technology adoption might also be slow for customers who have grown accustomed to the “physical” presence of on-premise software on their desktops. 

Bridging this knowledge gap of prospective customers is the critical role that the SaaS industry wants affiliate marketers to fill. 

Do SaaS affiliate programs work?

There are several reasons why SaaS affiliate programs are a win-win for both companies and affiliate marketers.

Recurring commission: Affiliate programs in certain industries can be very demanding and require partners to find new customers every month. In SaaS affiliate programs, however, every new customer signup implies a recurring monthly commission for the affiliate partner. 

For example, in the Freshworks Affiliate Program, the partner gets paid $5 for every lead. And every time the partner’s referral becomes a paying customer, the partner will be paid 15% of the Monthly Recurring Revenue (MRR) for one year or until the customer churns. 

This makes a SaaS affiliate program a better deal for the affiliate partners working in B2B than for consumer products. 

No-frills marketing: To promote a product that cannot be physically experienced by customers can be daunting—but every product in the SaaS market comes with a free trial. SaaS companies also have specialist teams for conducting demos, sales pitches, and customer onboarding. 

This helps the affiliate partner to focus on just bringing the right prospect to the website and leave the rest to the specialist teams. With a focus on content optimization in the affiliate platforms/blogs, the partner can focus on scaling up their reach. 

Scalability: The free trial ensures that customers know what they are purchasing. This reduces the probability of churn or a customer switching to another product. With less churn, the recurring commissions are almost always ensured for the affiliate partner.

Growth in the client’s business also does not necessitate them to change their product. SaaS products can scale according to their customers’ needs without any disruptions or downtime. So the growth of a customer can actually mean more revenue instead of fears of revenue loss for affiliate partners. 

Scope for multiple opportunities

As many as 75% of companies are predicted to run purely on SaaS software by 2021. Businesses use a range of SaaS products across various departments, including CRM, helpdesk, IT service desk, marketing automation, and many more. This raises a myriad of opportunities for an affiliate marketer. 

A proliferation of SaaS tools also allows the affiliate partner to choose a niche that will suit their expertise. Successful affiliate marketers often are focussed rather than being versatile. Having a smaller but targeted product portfolio to promote is the trick to succeeding as an affiliate marketer. Background research into various SaaS affiliate programs would help one in finding the right program. 

Often, the best opportunity for an affiliate marketer is found at the intersection of their interests and the prevailing market trends.

[Click here to read about becoming successful in affiliate marketing, especially in a work-from-home environment.]