How to Build a Partner Program for Scale
Did you know that 60% of CEOs recognize Partnerships as a route to revenue growth, yet their typical failure rate is over 50%?
Very few SaaS businesses get anywhere close to $100M ARR without a stellar Partnerships team at the heart of their growth strategy.
Matt Bray — author of The Partnership Principle — and Kelly Colman — Head of Emerging Markets at MedBridge — suggest Revenue Leaders today need to look outside of their traditional ‘direct’ Go-to-Market box.
“In today’s digital economy, the fourth Industrial Revolution, we are seeing the rise of the ‘Enlightened Buyer’, with more and more people involved in and accountable to the decision-making process.” To get the advantage in the buyer decision-making processes, businesses need to enable greater market visibility and buyer traction through partnerships. “Few revenue leaders successfully utilize the partner ecosystem around them, missing the opportunity an indirect partner strategy offers in accelerating revenue and customer success.”
The ‘direct revenue model’ now needs to be amplified for companies to survive. Our upcoming new course with Matt and Kelly — Partnership Fundamentals — will enable Revenue Leaders to either build from scratch or optimize and scale an already existing partnerships program for accelerated revenue growth.
We also discussed the benefits of a partnerships revenue model and how best to implement one in our last Pete Digs Deep (PDD) event hosted by Non-Executive Director at Kluster, Pete Crosby: ‘Secrets of Scale: Why Partnerships Deliver Unicorn Grade Growth’. Watch in full here.
Typical partner programs
There are different types of partnership processes that will serve your business through varied channels. The best way to create a revenue stream via partnerships is first to decide on the type of partnership contract that would serve your business best.
CannalPartners describes the four main types of channel-marketing partnerships:
- Affiliate Partnerships: Partners use their website and audience to drive traffic to your site, and in return, you pay them a percentage commission on any sales that traffic produces
- Referral Partnerships: Trusted partners refer qualified customers to your business, and in return, you pay them a percentage commission on any sales that traffic produces
- Alliance Partnerships: Partners in related businesses share customers with your business, spreading awareness and selling each partner’s products in exchange for a percentage of sales revenue
- Reseller Partnerships: Partners purchase goods or services from your business with the intent to resell them, often adding value through additional services.
The best type of partnership program for a scale-up business can depend on your industry — reseller partnership may not be great for fast-growing SaaS tech businesses, so think about what stage of growth you are at.
“Often the biggest challenge for many businesses when they’re starting out is being clear on what the most important objective of their partnerships function should be. As partnerships typically sit within the overall revenue team, the objective of partnerships should be to deliver additional revenue or sourced opportunities, which the outbound sales team haven’t bought in themselves.
Having a clear objective of sourced opportunities will make it a lot easier to forecast revenue through partners,” – Emily Assender, Director of Strategic Partnerships at Ometria.
Emily recommends the first thing you want to do is understand your ICP (ideal customer profile) and what partners influenced them at each stage of their buying process. Once you’ve understood that, and you’ve got your target audience of partners.
“The next step is to create a partner qualification table, based on your own business objectives as this helps you rule out who initially might look great as a partner, but actually doesn’t present you with real opportunities. This way, you can be much clearer about what you’re forecasting from a lead and opportunity perspective because you’ve got a laser focus on the partners who are a great fit for you.”
How to build Emily’s partner qualification table?
Emily shares that she builds six key business objectives into her partner qualification table. The easiest way to do this is to frame them as questions:
- How many ideal customers does this partner have?
- Are we talking to the same job titles?
(These two questions are really crucial because you want to be able to create a meaningful joint value proposition. And, if you’re talking to different job titles any co-marketing that you do is not going to be relevant for the right people and therefore you’re not going to get your referral.)
3. Are they retail-focused?
4. Is there competitive overlap?
(This is another crucial question as you don’t want to be competing for the same budget. There’s a lot of overlap in the tech space so you have to decide how much overlap is acceptable to you.)
5. Do they give you access to a target region?
6. Do they have a really solid or mature relationship with your competitors?
(You can strategically partner with businesses that have relationships with your competitors if you wanted to take the approach to try and knock them out. However, if you have partners who do not have relationships with your competitors, it is easier to get opportunities.)
It’s also important to continually analyze and reassess how the partnership will affect every stage of the funnel once it is in place. Allison Kelly－Head of Growth Strategy at Attentive－suggests looking at “offensive opportunities and defensive opportunities with your partnership strategy”. Ask yourself, “how do we build a protective shield around the business as it stands today, while also using the multiplier impact of partnerships to evangelize and share more about your product or market position?”
Asking yourself this question helps you to focus on three critical revenue metrics. Firstly, Allison says to pay attention to the top-of-funnel impacts. “Are you sourcing with partners? These can be coming in from partner marketing opportunities or direct referrals and introductions.”
Secondly, take a look at velocity. When you grow at a fast rate, you have to be able to look at velocity impact. Ask yourself, ‘Are we reaching these prospects faster through partners? Are we seeing velocity and closed-won rates improve because of a partner being involved from an influence perspective, or source perspective?
And the third piece Allison pays attention to is churn rate reduction. “Are you building a defensive mechanism to protect your customer base with your partners as well and how are you monitoring that?”
How to frame partnerships for internal buy-in
“Partnerships is a revenue role and everything routes itself back to revenue stats.” — Matt Bray, VP EMEA Partnerships at Signavio
Matt Bray shares that partnerships should represent 30% of the overall gross revenue that your organization earns. “Top of the funnel pipelines should be at 10x and the sales cycle from pipeline to close should reduce from at least one to five to one to three based on the pre-qualification the partnerships should be doing.” Your deals should also be enlarging at least by 60%.
When done right, partnerships have a MASSIVE impact on your business ability to scale. If this wasn’t a solid argument for building a solid partnership program for indirect revenue, we don’t know what is!!
Thank you again to Pete Crosby for pulling together yet another brilliant panel of industry experts. You can visit our events page to find out about upcoming content from Pete Crosby and our other resident hosts.
More on the Speakers:
Matt is the author of The Partnership Principle and VP EMEA Partnerships, Signavio. He has a 20+ year career in ‘Strategic Alliances’ & ‘Channel Management’. Co-founding member of SAAS ‘Software’ and ‘System Integrator’ start-ups, led global and regional teams in mid-market to Enterprise who have acquired others, IPO’d and been acquired themselves. Associate Director ‘Alliance Best Practice’, member Revenue Collective, international speaker, written blogs and articles published globally, and is revered as an expert in industry and role.
Most excitingly, Matt has joined our star student coach roster and will be teaching a brand new course called ‘Partnership Fundamentals: A Masterclass In Accelerating Revenue Growth Through Collaboration’. He will outline the practical steps to building a revenue-driving partnership model — critical knowledge for startups.
As Head of Growth Strategy at Attentive, Allison is responsible for executing growth programs and optimizing the revenue funnel. Her experience has ranged from sales leader, individual contributor, business owner-and most recently strategic alliances and partnerships for a startup in NYC.
Emily is Director of Strategic Partnerships at Ometria (Deloitte’s, “9th fastest growing company in the UK”). With 10+ years of experience across finance, online travel, and e-Commerce, her expertise is in building strategic partnerships to drive additional and repeatable revenue that has not been sourced by the outbound sales function.
For the past six years Emily has focused on building Partnership functions from scratch at fast-paced Software-as-a-Service (SaaS) start-ups — in both online travel and eCommerce and at where the business is trading between £5-£20mil Annual Recurring Revenue (ARR). Emily is also a Strategic Advisor for a non-profit, The Conservation Project International (TCPI), and advises on how to secure funding through partnerships and scale their program worldwide.
New Course! Partnership Fundamentals: A Masterclass In Accelerating Revenue Growth Through Collaboration
Our brand new Masterclass is based on the skills and competencies recognized by the Alliance Best Practice research (2020) conducted throughout the global ‘revenue leader’ community and combines over 40+ years of field experience from two of the world’s leading experts in Partnerships and Ecosystem Management.
In this course you will learn:
- The Fundamental Ingredients For Collaborative Success
- Tried And Tested Partner Acquisition Strategies For Your Go-To-Market Programme
- Partner Ecosystem Journey and Financial Modelling
- Channel Activation and 3-Way Value
- Channel Management Best Practices
- Supercharging A Scalable and Repeatable Framework For Revenue Growth
The ‘indirect revenue model’ enables sales to reach more people, the challenge is whether companies are willing to invest in Partnerships to move with the times. From the ground up, this Masterclass course will enable Revenue Leaders to either build from scratch or optimize and scale an already existing partnerships program for accelerated revenue growth. Attend this course to learn how to create your ecosystem, operationalize revenue streams, and collaborate with your customers in the Partnerships revolution!
See the syllabus for this course here. Sales Impact Academy Members can enroll now!