By Todd Crawford, co-founder, Impact.
Originally published on Internet Retailer.
With your finance team looking for any and all ways to cut costs at your business, discretionary budgets — and expenditures like partner commissions — may be right in the crosshairs. But before you pull the plug on those hard-won relationships, remember why partnerships are not like other channels. Once damaged, they are not easily repaired, because unlike paid search and display ads, your partners are people.
Search campaigns and programmatic media buys can be stopped and started on a dime. But partnerships are relationships with other human beings. The rules are different, but so is the potential for creative, collaborative, and compassionate problem-solving when things get tough. In fact, during a crisis, partnerships can see you through when other channels can’t. They offer a way to sustain a low-risk, performance-based revenue stream, and they can help you find cash in unexpected places.
Six ways to create opportunity
So how can you preserve these valuable relationships when cash is scarce?Here are six ways to create opportunities instead of exes:
- Pick up the phone to communicate with partners. Any given conversation might lead to an innovative win-win solution.
- Deliver non-monetary value. Fast payment can be a huge value to smaller partners with tight cash flow. Consider negotiating lower commissions by guaranteeing faster payouts. Remember, a missed payment may be seen as a red flag that you are going under, and your partners may scatter. But faster payments, even if reduced, send a signal that you are still in the game.
- Consider increasing commissions — even for a day or two. More money in might mean more out as motivated partners put the pedal to the metal. Plus, the optics are pretty powerful for your brand.
- Renegotiate fixed fees. Your fixed-fee partners might be open to new CPA terms, especially if the alternative is curtailment. It doesn’t hurt to ask (nicely).
- Explore brand-to-brand partnerships. That struggling travel site might be open to promoting staycation supplies like wine delivery or streaming services. Business for you can mean needed cash for a complementary brand.
- Get bullish. Partnerships are proven revenue drivers, so a downturn may be the time to go all-in. Why not negotiate a placement package with a publisher at a discount or ask your large partners where they think investment would pay off? If your partners see you’re not cutting commissions or pushing payment terms like other brands are, you can bet they will have great ideas for driving volume.
Protect your program’s brand
A great brand reputation is a powerful tool for attracting good partners. But if your partnership program doesn’t live up to that brand, that value is lost. As with customers, how you treat your partners when times are tough will nurture pay-off in the long run. So instead of getting out, get creative!