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Estd 4.22.2023
Below is our answer based on the principles laid out in our SaaS pricing book, Price to Scale:
• When using channel partners or resellers for enterprise deals, you generally want to structure a pricing model that gives the partner an approved discount off your list price. This discount creates a “partner margin,” which then allows the reseller to add their own markup when selling to the end customer.
• The idea is not to simply lower your price indiscriminately but rather to create a clear, structured pricing framework. Our book highlights that enterprise deals often involve significant discounting (often in the 30–70% range for enterprise customers) while keeping consistent margins for each party. By setting a baseline list price and an agreed discount for your channel partners, you can ensure that both your revenue targets and the partner’s incentive to add their margin work in harmony.
• In practice, you would identify a discount rate for partners that falls within the broader enterprise discount guidelines. This means calculating your list price such that when the partner applies their discount, you still maintain the revenue and profit levels required, while also leaving enough room for the partner’s markup.
• This approach helps preserve pricing consistency, supports your overall revenue optimization strategy, and clearly delineates the roles of your company and the channel partner. As discussed in Price to Scale (see our sections on discounting and customer segmentation), carefully controlling discount authority is essential. With partners, it’s equally important to set these controls upfront to avoid price erosion and ensure both parties benefit.
In summary, our recommendation is to give channel partners a predetermined discounted rate off your list price – effectively creating a margin that they can mark up. This method aligns with our book’s broader strategy on managing discounting while optimizing revenue across diverse customer segments.