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To be realistic you both need to have a real understanding of at least the cost of acquisition today and lifetime value for a client (including time period). I
by davismwfl 6y ago
To be realistic you both need to have a real understanding of at least the cost of acquisition today and lifetime value for a client (including time period). If you are just acting as a sales rep for them essentially and they own and manage the customer after you get the customer signed up, then that is different then if you own the customer and the support. If language and culture are an issue, then likely you'd own the support and so the cost should be an on-going cost.
The most common method for referrals is typically a one time payment but then the SaaS company owns the client and all support. For this they will want to keep the CoA to a point they can make money over the life of the client. You need to understand the current pricing for clients to know how to price this fairly. Hard to give you much of an idea, but I have seen for large enterprise style agreements where the referral payment is equal to 1-3 months of service or when values are smaller, 1 year of service. It is so dependent on type of customer and LTV etc that it is hard to be general.
Second option is if you own the customer because of support etc, then you would have on-going costs and so typically a percentage of revenue is more fair for the life of the customer. This is almost more like a reseller's agreement than a referral/sales agreement.