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What to do when your CEO says; "Let's try out a partner program..."

What should the team do when the CEO wants to start a partner program. Here are 3 paths to take.

Many many failed partner programs fail because of leadership's miscalculation or general misunderstanding of what it takes to build a successful program.

This article is written for tech founders and department leads to understand my recommendations for who and how to start a first partner program to help ensure it succeeds, or at the very least, you waste as little budget as possible proving the concept.


The nomenclature I will be using in this article: 

“Agency” = Service Provider, Managed Service Provider (MSP), sometimes a Value-Added Reseller (VAR), always a Digital Agency, sometimes a Consultancy

“SaaS” = Software as a Service, Tech Company.

“Affiliate” = Anyone or any website or any app linking to your product in return for a commission or upfront payment. 

“Partners” = Those service providers you work closely with to find, convert, and grow new business using your combined resources.

“Channel” = I have no idea honestly. This one still confuses me.

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Before I get to the main topic of this article, I need to bore you with our origin story… 

For those who don’t know much about me, I have to tell you, I have never been a “Channel” guy. 

I cut my teeth using partnerships to break into new industries like data storage, education, automotive, and even staffing… But at the time, I had zero clue that what I was doing was called “Channel partnerships.” I just thought it was a part of software go-to-market strategy.

Back in my day 👴🏻… I’d use partnerships with thought leaders, service providers, and other companies in the space to get my company established in new markets faster and more efficiently. 

But… I thought that was just marketing 101. I had honestly never heard the term “channel,” and I did not call it a “partner program.” 

As a VP of a tech startup, I usually had: 

  • A short timeline to hit goals, 
  • A low budget.
  • Little help from anyone.
  • No name or thought leadership in the vertical.
  • And a lot of pressure from VCs to get traction quickly…

Fast forward to 2019, while I was consulting for other SaaS products and marketplaces, I realized many CEO’s and marketers were focusing all of their attention on bringing their new products to market using only traditional channels - PPC, SEO, sales… And not even entertaining partnerships strategy at all in the early days.

I’d say; “Why aren’t you searching for those people with an established audience or book of business, and working with them?” 

They’d say; “Partnerships come later - after we build our brand and audience, then maybe we will look into partnerships…”

Then I’d refute; “No. Right now you need inexpensive ways to penetrate the market while establishing trust with your target customers. Your SEO and PPC and Sales efforts will be exhausting if you do not align yourself with those who already have the attention and trust of your target audience.”

Sometimes they’d be intrigued enough to put it back on me; “How do we get people with customers to consider working with us, the newbies, to get into their industry?”

That was a fair question. 

And, although I have published numerous strategies to date, including one on building thought leadership quickly around a new topic / keyword / industry, at that time I had very little strategy published. 

All my strategy was all in my head. 

So, I lay in bed that night thinking about a business wherein I would help earlier stage SaaS execute GTM strategy with partners. 

I immediately (literally 230a on a weeknight) purchased the domain Partnerprograms.io.

After a few successful projects with SaaS startups, we began to realize would never truly change this old “channel partnerships” strategy mentality without educating both sides of the partnership simultaneously. 

So we launched two educational communities; The Partner Programs Collective, and The Agency-Partners Collective, then a podcast; Make Them Famous - The Partner Enablement Podcast, and finally a Slack group of around 2500 partners. 

Ok, ok… now we’re starting to change people's perceptions. 

Around that time, we start seeing complaints posted to our agency community around: 

  1. Communication breaks
  2. Tracking 
  3. Project management of the partnership
  4. Setting clear expectations
  5. Execution…

So we looked into the tools partners were using [or trying to use] to find and manage their partnerships. 

We found a few major problems with partnerships between SaaS and service providers:

  1. Tech teams have expensive channel management software built for them, which they obligate their partners to create accounts just to manage referrals. 
  2. Agencies use typical project management software and CRM’s to manage client services, and try to use these tools to manage partnerships as well. 
  3. Every new partner the agency signs up with has a totally different set of tracking and communication tools they expect that agency to adopt. 

How can two teams effectively communicate, align, and grow together if they have totally different management and communication mediums? 

And, with new partner programs launching daily in SaaS (10K+ martech products alone exist today), service providers are getting hammered with partnership requests! How do they know which one’s to risk their time and resources pursuing?  

We thought - there is no way partnerships can ever truly become easier or better without a single place where both sides can find each other, align, and manage their partnership. 

Enter; Partnerhub®️

Now we all have a place where vetted partners can effectively and efficiently find and manage their partnerships in one place - referrals, projects, discussions, documentation, opportunities… all where both sides can see. 

Finally, we have everything an early-stage SaaS or Digital Service Provider needs to make sure they are successful in partnerships! 

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Now that you have a sense of where I and we at Partnerprograms Inc. are coming from, let’s head back to the main point I’m trying to make with this article - to help you understand 3 versions of the internal conversations between leadership and the team when starting a new partner program.

Our personas in this role play: 

Sebastian the CEO

Cindy in Sales

Mark in Marketing

Pete in Product

Scenario #1 - SaaS CEO hears partnerships are the bee's knees and tasks someone part-time to “Try to make it work.”

Sebastian the CEO: “Hey all, let’s get us into the partnerships game. Who wants to own it?” 

Cindy in Sales: “This should be run by us because we deal with referrals.”

Mark in Marketing: “How does this affect my team?”

Sebastian the CEO: “I agree, sales should lead this. Mark, your Marketing team won’t need to do anything. Alright Cindy, let’s just task one of you AE’s who aren’t doing great on this part-time, and if they fail, it wasn’t meant to be.” 

Cindy in Sales: “My thoughts exactly. I’ll find the perfect person and have them start smiling and dialing to close sales, but in partnerships. What number should we put on this person?”

Sebastian the CEO: “Well, what’s out current average monthly revenue close rate per AE?”

Cindy in Sales: “My AE’s are doing $10-15K per month in new revenue.” 

Sebastian the CEO: “Ok, let’s give them some slack, since it’s part-time, and say $50K in revenue generated from partnerships referrals in the first 6 months. Sound good?”

Cindy in Sales: “Should be easy. I’ll have someone start outreach tomorrow.”

Scenario #2 - SaaS CEO wants to build a partner program spreading the duties across multiple department leads.

Sebastian the CEO: “Hey all, let’s get us into the partnerships game. We’ll each have a task to fulfill in this endeavor. Let me explain: 

  1. I will be the first point of contact for every new partner - vetting them and deciding what to do next. 
  2. Mark in Marketing, you will have a call with every new potential partner and get them into our next article on the blog or the newsletters. Including them will pay dividends. It allows us to get next to their audience and they greatly appreciate our ability to feature them in ours, which leads to reciprocity (referrals). 
  3. Cindy in Sales, you will have a call with every new partner to strategize co-selling. We want to quickly map accounts and see (a) what the overlap status is before and after going into co-marketing, as well as (b) determine their willingness and ability to co-sell on a regular basis. 
  4. Pete in Product, you will meet with the partner prospects who make it through the sales and marketing calls to understand what more they need from our product to commit to a partnership fully. And, while on those calls, start choosing an inner circle of those you trust to reach out to on a regular basis for product feedback. They will appreciate you asking.”

Team: “Let’s do it!”

Scenario #3 - SaaS CEO knows they need a partner program and takes it upon themselves to prove it out before task’ing it off.  

Sebastian the CEO: “Hey all, it’s time we nurtured these potential service providers into partnerships. I will be taking it upon myself to prove the viability of partnerships for our product at this time. What I will need from each of you is the following:

  1. Mark in Marketing, I’ll need some initial assets - mainly a presentation to showcase what service providers (agencies) can sell on top of our product. Please package up every asset we have that anyone can use to promote our product into a drive folder for now.
  2. Cindy in Sales, I’ll need you to assist Mark in creating and packaging up what you have for your SDRs, but with a slight change - focus it on how another company can make money selling services on top of our product. Also, please check out Reveal or Crossbeam so we can be ready to co-sell with anyone ready.
  3. Pete in Product, please create a calendar link specific for partners to get involved in our roadmap. We will need their initial and long-term involvement in our roadmap because agencies know what our customers need in 6 months, but we only know what they need today.”

Team: “Let’s do it!”

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Here are my recommendations to tech / SaaS teams interested in launching a partner program in the next 6 months: 

**Explanations are below.**

  1. If you are a startup (under 100 people) and have demand from agencies for a partner program, the Founder / Co-founder should own the partnerships for the first 20 partners before hiring or handing it off. 
  2. If you’re the startup, but your founder(s) are not comfortable with the networking and creative collaboration necessities in partnerships, differ the program ownership to the next best person in a leadership role (i.e. CRO, COO, or VP), ideally on the marketing side of the business.
  3. In the situation you are becoming a mature tech company and your Founder / Co-founder are all tied up, the next best team to own partnerships (in my opinion) is the Marketing, and to start, their main KPIs are “traffic and conversions from co-marketing” and  PQLs - “Partnerships Qualified Leads” - which are sourced leads from partnerships referrals or co-marketing conversions that have been qualified by sales.  

Now, IF you are not able to task marketing, you cannot launch the program under senior leadership, and you have to hire… it’s crucial you: 

  1. Not put a revenue quota on your program in the first 6 months. 
  2. Try to find someone out of a top digital agency (in this example, your are setting up a partner program focused on digital agencies).
  3. Although a former salesperson is not bad, the first partnerships person should be more of a collaborative and creative networker than a revenue-focused salesperson.
  4. Make sure this first partnerships hire is likable. 

Now, let me explain my reasoning: 

**Remember, this is not about an “affiliate” program. This is about “partnerships”. Affiliate programs should be launched and managed by marketing teams because they are link-based, automated, and related to co-marketing collaborations more than product sales and implementations.

Q: Why should the Founder / Co-founder incubate the partner program? 

Answer: Partner programs are one of the most poorly understood and poorly executed options inside tech companies. And they often fail because: 

  • Lack of internal buy-in 
  • Conflicts between sales and partnerships teams
  • Unrealistic revenue goals in the first year

…All things that would not happen if the Founder / Co-founder was the one pushing the partner program forward internally. 

Further, there is so much valuable product insight the Founder / Co-founder can gain by speaking with solutions partners which they can take to their product team to fix issues or alter the feature roadmap.

Finally, after several months of nurturing partnerships, the Founder / Co-founder will have a realistic understanding of (a) whether or not it is the right time for a partner program, and (b) what it takes to find and activate new partners. Then, they can correctly plan objectives, budget, and staff the new program with the right talent. 

Q: Why should someone in Marketing take over from there? 

In my experience, while a salesperson can co-sell and work partners into an account based targeting routine, they ofter are only wired to ask for leads - go after the revenue - and in partnerships, you have to give a lot before you ask for anything in return. 

This means, that if you start your program under sales, it will operate as a sales team, and service providers hate being sold to when they enter a “partnerships” conversation. 

Read this article on why your salespeople should never rep themselves as “partnerships” on LinkedIn or as a role/title  >

Partnerships should almost never be transactional. If it is, meaning you ask me to buy your product first, it’s a vendor relationship. Sure I may choose to buy an account at some point, but the conversation should always begin with “How can we use our combined resources to go after new accounts together?” 

It’s not about me taking pieces of your pie or you taking a piece out of my pie… Partnerships is about working together and baking a brand new pie we can split. 

Q: Why did you suggest partnerships teams not have a revenue quota for the first 6 months? 

This is a controversial one because all departments should be paying there way.

My reasoning is based on experience seeing: 

  • New partnerships managers with no experience working with the target partner persona’s burning bridges because they ask for referrals too soon and too often. They spent little-to-no time nurturing the relationship because of the pressure of a their revenue quota.
  • Partner managers having to sell licenses to the potential partners to hit their quota - which turns them into salespeople and hurts their chances of putting together partnerships go-to-market to get in front of all of their partners’ clients and followers.
  • Teams spending enormous amounts of budget on tools and consultants to hit their quota - which makes their quota all the more valid in the eyes of their CRO. 
  • Dismantled and cancelled programs with huge potential simply because the team failed to meet a quota. 
  • Many service providers having an overall distaste for “partnerships” with tech companies because they feel they are constantly being sold to.

Based on this experience, and the fact that partnerships require 3-6 months to develop, is why I believe the first 6 months of partnerships should not have a revenue quota. 

Instead, teams should create Objectives and Key Results around: 

  1. Total partners in process (no contracts early on, just build trust).
  2. Total traffic to co-marketing content. 
  3. Total event attendees on partnerships events. 
  4. Lifts in pipeline velocity. 

If you focus on these things, continue to create great product that draws service providers to you, and do not spin your wheels trying to make partnerships something it’s not, you should succeed in partnerships with digital agencies. 

I hope this was helpful!

In partnership, 

Alex

Keywords:
CEO
Sales

Alex Glenn

CEO

Founder and CEO of Partnerhub. Proud father. And proud of what our team has built!