Should SaaS Partner Programs have Tiers?
On LinkedIn the other day, Swati Moran, GTM Partner Program Lead @Stripe, asked a very important question about the need for tiers (i.e. Gold, Silver, Bronze...) in SaaS partner programs:
"Does a SaaS Partner Program really need tiers?
I have definitely seen the traditional partner tiers - Platinum, Gold, Silver in resell programs. They were originally designed for a resell business model. I would have thought more SaaS companies would move away from tiering. It may not be the shiny metal tiers but rather calling it "registered" "premier" tiers etc. The more a partners does, the more a partner gets. The market has shifted to partners want a horizontal journey with the right benefits and enablement mix for their business model. Simply put the small vendors have to give more to attract the right partners!"
The full discussion is below - it's a great read!
Here's the background on this topic:
Way back in software sales, the "Channel" was developed to enable "resellers" (third parties who made their living selling your software and other software for a margin).
Much of this software included hardware, and needed localized support - hence the need for resellers and the channel.
Since the growth of software as a service, and product-led companies, these new tech companies have little need for resellers.
So, they have adopted the new channel we refer to as "Referral Programs". Some of them automate further by enabling "Affiliates" - wherein anyone can send tracked traffic to your product in return for a small percentage of conversions attributed to them.
The growth of these new referral partner programs, in SaaS, are dependent upon digital agencies (MSPs, consultants, solutions providers... The agencies sell services on top of the SaaS to their clients. The partner programs are there to support and bring business back to the agencies.
And these service providers have one thing in mind in order to ensure they are successful; client satisfaction. Without happy clients, they fail.
This is where the argument against program tiers comes in:
If the agencies only care about client satisfaction, then how does creating a complex partner program with multiple tiers bring partners more business?
Some would point to the success of tiered programs like HubSpot's and say; "But Platinum HubSpot partners get more benefits and leads from HubSpot and therefore it's more valuable for their agency to get to Platinum status..."
Which is true - being at the higher tier of a tiered program is in fact beneficial to the agency.
But... what if HubSpot's program was flat, and only rewards-based, with no defined tiers?
Would the customers of HubSpot engaging with those agencies feel less satisfied?
Would the agencies be making less of an impact?
Would they be earning less?
Further, how much more could HubSpot have put into product, partner marketing, market development funds, events... had they simplified their program and reinvested all those human resources back into helping partners instead of managing a complex program?
While we may never know the answer to that, we do know these facts:
- SaaS half-lives are incredibly short these days - most failing in the first years, and the successful ones getting acquired. Few reach the age to grow their partner program to anything close to the size of HubSpot's.
- Even fewer are or will ever be ecosystems (supporting hundreds of tech partnerships and thousands of agency partnerships) and want to gamify with tiers and incentivize current partners to tier-up.
- Regardless of company size, partner programs are already difficult to create and manage. Launching with tiers is yet another thing your team has to educate partners on, create training to tier them up, and then track and report on... That's a lot of software that can drown an early program and the partners in it.
An argument you may have at this point is; "But tiers can be based on certifications, and the SaaS need to offer certifications so agencies can attract customers."
The argument to that is; certifications, for the most part, are seen as a waste of time for agencies. don't take my word for it, we ran a poll asking about the ROI of certifications and the results are 76% of respondents found certifications to provide little or even no return on their time. Read that article here >
We're advising simplicity for your partners' sake.
Instead of tiers, use segmented definitions like:
"Integration partner"
"Strategic partner"
"Co-marketing partner"
"Expert solutions partner"
Then assign a point value internally (Use tags on your partners' profile inside Partnerhub® to score partners). As partners finish projects with you, give them a point. And, a point for every 10 referrals... For example. This way, you just need one method for internal reconciliation making the system easy to maintain.
Further simplify this by replacing commissions with MDFs, product-led initiatives and more co-marketing to drive referrals... More on the argument to avoid a commission-based program can be found here >
Imagine how much less chaotic programs would be without tiers or commission tracking! 😁 🤝
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"Right on Alex 🇺🇦 GlennAaron Howerton said:"From an Ops perspective, removing tiers can also drastically simplify your architecture and improve potential for scale. I think, like any programmatic focus, it should be about strategy and outcomes. What does Tiering accomplish for your partners, your customers, and your colleagues? How does tiering impact revenue goals for full-funnel partner engagement? How does tiering fit into your overall vision for Partnerships, as a whole and within the various programs you run?"
Patricia Rush had this to add:
xtagstartza href="https://www.linkedin.com/in/swati-moran-3522931/">"Swati Moran