Why you should invest in a partner program to grow your business
ARTWORK BY Ilse van Kraaij in the Netherlands
If you haven’t implemented a B2B partner program yet, you could be missing out on increased revenue and a larger customer base.
When I worked at cPanel, we didn't have a sales team nor did we need one. Instead, we developed a robust partner ecosystem which included hundreds of reseller partners, numerous integrations, and service partners to expand our reach and exposure. By leveraging our partnerships,we achieved a number of business objectives across license distribution and sales, customer support, co-marketing campaigns, and app integrations for improved product experience.
If you run a B2B SaaS business and want to give your sales a boost, a partner program could be just what you need. Partner programs can be great for marketing, sales efforts and customer satisfaction. With partner relationships, you can work together to provide unique customer experiences, create mutually beneficial relationships, develop indirect sales channels, and increase revenue.
We briefly touched on how to use partner programs to drive sales in Newsletter #5 and here we’re diving a little deeper into the topic. A study commissioned by Impact and conducted by Forrester found that 77% of brands agree that partnerships are key to growth. The study also found mature partnership programs contributed to 28 percent of overall company revenues, while low maturity programs contributed only 18 percent. This increase represents an average of $162 million dollars worth of incremental revenue for companies with high maturity programs. Partner programs include everything from strategic partners, B2B partners, affiliates, resellers, app integrators and more.
Here’s the TL;DR on pros/cons of various partner programs:
Okay, now let's go deeper:
Invest in a channel partner & reseller programs
Channel Partner Programs are a great way to expand your reach and accelerate sales. In a channel sales model, your company sells through third-party partners such as affiliate/referral partners. They get commission on each purchase, while resellers (value-added providers) typically bundle your product with their own.
Reseller
Reseller partners purchase your product, often at a discount, and resell them to end-users for a profit. Building a network of resellers and channel partners who acquire customers is less risky than building an in-house sales team because your partners will be the ones acquiring customers and providing support.
The benefit of a reseller program is that you’re putting your business in front of more people, including those outside your target audience. When you get new customers through this strategy, they’ll expect to work with one of your partners instead of you.
A few examples of companies that have robust reseller programs are cPanel, Klayvio, SuperMetrics, ActiveCampaign, LiveChat and many more.
Pros:
Boost your growth and scale your sales, while decreasing your CAC costs
Greatly increases your reach into new markets and customer segments
Outsource your customer onboarding and support
Cons:
Don’t own the customer experience, which can cause brand dilution
Heavy lift to design a training program and produce partner enablement materials
Difficult to access end-users for feedback, insights, or testimonials
Affiliate/Referral
These are third-party or referral partners who refer new customers to your business and get rewarded for assisting a sale. PartnerStack, Rewardful, and many others do this out of the box. Referral programs are one of the most common partner programs because they are very simple to create.
Types of rewards typically offered:
Credits
Percentage of Sales
Discounts
Pros:
Simple and passive way to drive sales (set it and forget it)
Customer acquisition cost goes down
Higher conversion rates become the warm introduction of a referral
Cons:
Paying out affiliates/referral partners could end up blowing your budget
Messaging and positioning can become diluted
Brand reputation could be impacted
Channel partner programs can be one of the best ways to expand your reach and accelerate sales. But, in order to have a successful partner program, you need to think through the following questions:
What do you want to accomplish with your partner program?
What incentives do partners need in order to participate?
Are you incentivizing the right partners for your business?
Upsell and cross-sell with integration partners
Integration partnerships are when two companies agree to integrate aspects of their product together. This often allows each company to focus on its core features and use the partner’s offering to extend the value of its product. For example, Intercom is deeply integrated with Hubspot, Salesforce, and Stripe.
Integration partnerships improve the customer experience and reduce churn by creating a better product experience. There’s nothing users love more than when all their workflow tools come together seamlessly. Oftentimes when features across product competitors are negligible, integrations are the key differentiator in the buying decision.
Who can you partner with?
Service providers
Product platforms
Complementary agencies
Strategic companies
Knowledge partners
Pros:
Increase stickiness of both products and enhance service value
Perfect candidates for powerful co-marketing campaigns
Stay focused on core features and avoid product bloat
Cons:
Deep teamwork required
Product teams have differing priorities and roadmaps
Existing technical debt slows down the project or makes it not viable at all
Ex: Active Campaign has partner programs in all the categories covered
Add your product to existing marketplaces
Marketplaces like AWS Marketplace, Google Cloud Platform, and Microsoft Azure are platforms that provide a new sales channel for independent software vendors and technology partners to sell their solutions. A large portion of the workload is already done for you by these marketplaces, and all that's left to do is list your product.
For example, AWS has a simple guide on how to create an AWS Marketplace listing. It also provides a link for you to submit your product for consideration. If you're accepted as an approved seller, then you can enjoy the benefits of being listed in one of tech’s most prominent marketplaces—all without dedicating a salesperson or team.
Pros:
Your customers are already there
Free money: Financial incentives like MDF (market development funds) which supplement things like your ad budget in order to drive traffic to your listing
Hand holding: Account representatives are assigned to you and provide step-by-step guidance on how to create and optimize your listing
Cons:
Rigid rules and requirements to follow within the program
Must already be profitable and meet revenue targets to be considered
Product and Engineering can become strained in order to meet technical requirements
Develop co-marketing campaigns with complementary brands and partners
Consider partnering with a complementary brand in your niche or integration partner to help each other drive sales. Co-marketing campaigns provide companies with an opportunity to work together to promote a shared offer — such as a co-branded product, or a piece of content. It’s a great way to reach new audiences without having to do all the legwork yourself.
Unlike marketing with affiliates or referral partners, co-marketing partnerships treat the collaborating brands as equals. Both companies do the legwork of putting together a campaign, promoting the offer, and sharing the costs for marketing and advertising. Examples: joint webinars; sharing a podcast ad slot; co-hosted meetups.
Pros:
Double the manpower, expertise, and exposure (and boost SEO)
Save money by sharing the cost of marketing and advertising across multiple budgets
Improve brand reputation, especially if partnering with well-established brands
Cons:
Time consuming and complex (two brands and two legal teams that need to approve)
Uneven contribution from either team
Uneven ROI across the two brands
Famous Examples:
Things to Consider
A partner program is an excellent solution for meeting many business goals. Finding the right one depends on your company's needs and your willingness to invest the time into developing a solid program. The type of program likely depends on your goals and what stage of growth your company is in.
Here are a few questions to ask yourself when deciding if your company is ready to build a partner program:
Do you have product market fit?
Do you already have product evangelists/raving fans in your customer base?
Are there businesses in your customer base that could benefit from recommending your product to their customers?
If you answered yes to any of these questions, then you likely have enough momentum to get started! (even if it’s just a lightweight partner program). Don’t wait! This could be the revenue game changer in your business!
