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Why most partner programs fail... And what we can all learn from their mistakes.

Partnering with digital agencies is not straightforward. You have to set up for success to avoid pitfalls. Here's how.

Let’s talk about partner program failures for a minute. 

There has been a lot of talk on LinkedIn lately about partner programs being shut down and great partnership leaders being laid off. 

#truth -

Every CRO and CEO wants other businesses to sell their product.

Most CEO’s have an overblown, usually unrealistic, and egotistical understanding of how people see their product. Trust me, I am one of those CEO’s…

Further, the type of partnerships I am talking about (between digital service providers and SaaS) are new. Brand new when you consider how long “Channel” has been around.

For those new to my content - “Channel” refers to an existing traffic source, customer source, or ecosystem you can more or less plug into. “Partnerships” refers to a 1:1 relationship between two people (read this article to understand why “partnerships” is a far cry from “channel”).

When you combine too proud SaaS CEO with misunderstood digital agency businesses, you will usually find a battlefield riddled with the bodies of deceased partner programs.

I hear it almost daily on calls with CEOs who have tried and failed with partnerships. 

Let me articulate with two examples of conversations I had recently on the topic: 

This happened to me recently - a CEO booked a call with me to try and be listed in Partnerhub® - they said; 

CEO: “We have a partner program. We pay 10% commissions on all referrals.”

Me: “That’s par for the course. Actually not necessary for partnering. What do you do for the partners to help them win more customers or increase revenue per customer due to your partnership? Do you highlight them on your site? Train their team? Co-sell with them?” 

CEO: “No. But we have killer customer support and our product is solid.” 

Me: “There are 9000+ MarTech products alone. So a great product, while necessary for partnerships, is a) not unique, and b) may get you customers, but c) it doesn’t support a partnership in itself. 

You HAVE to show the partner how they can increase their business by working with your product and team.

More specifically - how they can set up, sell, and be the support for clients on top of your software.”

CEO: “Ya, they can do that.” 

Me: “Of course. But, how are you showing them that path? And supporting them throughout? 

Or even, enticing them to go down that path?”

CEO: “We are not.” 

And for fun, let’s hear this conversation from the Partner manager's POV: 

PM: “I had a presentation with an agency CEO a month ago where they seemed excited to get going, but since then… crickets.” 

Me: “What did you sell them on? Talk me through that last conversation - what were they excited about?”

PM: “They said the product was great and they had a client in mind for it. They said they would reach out to the client and let me know.” 

Me: “So you focused the call on product features?”

PM: “Yes. That’s what they wanted to talk about.”

Me: “Ok so you need to realize as soon as that call ended, that person immediately goes into client calls where they hear about new issues or project needs they have to prioritize. That can take their attention away from your partnership opportunity for weeks. And by the time they even think about you again, they have forgotten everything that may have made them think of referring a client to you.

 

To avoid this, you have to make sure to get these important things done on those partnerships pitch calls: 

  1. Yes, align on the product. But do not spend more than 5min talking about your product. 
  2. Keep the presentation focused on how working with you as a partner can bring them new business and increase the value / prices / margins of the services they currently sell. 
  3. Show them the “track” to get to that revenue - exactly what stages are necessary and what you are going to do for them to keep them feeling the reciprocity while they devote resources to learning your product and setting up a sales system to get their clients to buy a service on top of your product. 
  4. Don’t end the call without scheduling the next call.
  5. Get them included in some thought leadership feature in your newsletter or blog to ensure (1) they see you as someone who is worth staying in contact with, and (2) get them introduced to more people on your team (marketing), and (3) help ensure you stay top of mind because now you have more reasons to stay in touch. 

 

This leads me to my answer to the question; “Why most partner programs fail.”

They fail for these reasons: 

  1. Lack of understanding of the partnership's strategy, resources necessary, and timeline is #1.
  2. Unreachable quota’s OR no revenue number which leads to the CEO / CRO not being able to justify the budget for the partner program and therefore shutting it down or firing the manager after year 1.
  3. Partner programs also fail for simple fact the conception had nothing to do with the word “partnership.” 
  4. Communication, or lack thereof, is third. 
  5. And the 4th reason partner programs fail is product… lack of necessary integrations… features… and overall quality.

 

And these reasons are either: 

Internal issues: Budget, alignment, expectations, product deficiencies…

External GTM issues: Communication, incentives, lack of support, selling instead of partnering…

 

What CEO’s and CRO’s need to understand BEFORE going down the partner programs path is: 

A partner program, when built correctly, is it’s own thing. Meaning, partnerships teams are not presenting a product. They are selling the potential partner on a bigger picture - the thing they can set up and sell on top of the product with the support of the people at your organization AND the referrals or demand generation being in your partner program brings their way. 

And this is why you see and hear partner managers complaining their hire ups don’t fully understand the task they are being asked to complete with such few resources (often times, the partnerships team have zero help from marketing or sales departments). 

They are being asked to create;

  1. What the program consists of.
  2. Incentives to attract partners. 
  3. A funnel to convert partners. 
  4. Assets to enable partners. 
  5. An outreach system to find partners. 
  6. And set up a software stack to manage and report on partnerships activity. 

…All without much help from the rest of the company. 

Of course, most people and programs fail in this situation. 

 

So what’s the answer for SaaS to succeed in partnerships? 

  • Teams need to fully understand what they are getting into. 
  • The product has to be right for “partnerships” - if not, call it an affiliate program.
  • Then (in my opinion), the CEO should lead the program for the first 20 partners so they can fully empathize with the partner personas as well as ensure support from the sales and marketing leads. Read this linkedin post for more detail on why CEO’s should start the program…
  • Finally, teams need to be 100% behind the program and see it to fruition.

And if you want to really learn the boots on the ground day-to-day life of a successful partner manager, join us in this year's Partner Manager Accelerator

 

I hope this was helpful :)

Alex 🤝 🚀💪

Keywords:
Incentives
CEO
Program setup

Alex Glenn

CEO

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