By Matt Ball
A channel is often seen as a ‘nice to have’ in the world of start-ups, and understandably so. There are numerous priorities, limited resources, not enough time, and an existential need to prove the concept and establish paying customers.
However, many start-ups find themselves three or more years down the road with zero effort having been put into establishing a channel, and that’s a mistake. Why? Simply because every partner that’s signed up without an established structure in place requires a custom deal. Before long, one partner becomes many and the start-up is left with ten custom deals to govern, manage and monetise, resulting in a divergent, organic mess rather than a structured and organised channel…
Let’s take a look at the basic, essential ingredients to building a channel which can be put in place with minimum effort, and enable start-ups to get ahead of the game while preparing for the development of a channel ecosystem in the longer term.
A partner program is NOT a ‘nice to have’
What’s the purpose of a Partner Program? In essence, a partner program is there to put you in control of your own destiny. If you let your partners define the rules of the game, you will end up playing as many games as you have partners, which is not a sustainable model.
By setting the precedents for your own partner program you create an early-stage ecosystem with standard rules, rewards and requirements. As a result you can govern all of your partners in the same way. As the ecosystem grows, governance can be streamlined and roles easily defined for the people you take on to manage these partnerships. On the other hand, no standardisation means the ecosystem will become exponentially more difficult to manage over time. Don’t go there!
Creating a partner program should be a straightforward process and is not the preserve of only large, corporate software companies. The initial objective of a partner program should be to outline types of partner that you have the capacity to work with, that will in turn benefit your business. Some common examples include:
- Referral Partners: to identify and quality leads to SQL level, and hand these over to you and/or your sales team
- Implementation Partners: to identify and qualify leads, and scope, win and implement projects. Implementation Partners can also help deliver projects that the start-up does not have the capacity to manage, so building scale to fulfil more deals
- Technology Partners: to integrate the product within their platform and ecosystem, and either refer customers or sell the product to their own customers as a value-add
- Installers/Service Companies: for start-ups with hardware as part of their solution, companies that install or service similar products or propositions are an ideal route to convert and win customers, and deliver units at scale
A partner program is governed by three definitions: the types of partner; what the partner can expect from the start-up in terms of support; what the start-up expects from the partner in terms of resource commitment, marketing efforts and sales performance. At ChannelCreator we often start with one type of partner and then scale out to supporting two or three types within the first year of operating an ecosystem. ChannelCreator consults on partner strategy and the definition of partner programs as part of its GTM Strategy process, which is included in both our Fully Outsourced and Hybrid models.
The key is to define broad terms of engagement with your partners, and only to deviate from these for a very good reason. If a partner doesn’t sit comfortably within these terms then consider whether you actually need them. If not then suggest that you reengage in the future. If you decide that you do need them then is there an alternative way that you can categorise them, and can you create a new partner type to scale over time?
Define an Ideal Partner Profile
In our previous blog on when not to outsource your sales and why, you’ll find content on the Ideal Customer Profile. In order to set up a successful Partner Program you’ll also need an Ideal Partner Profile. The first question here is: what are the characteristics of an ideal partner? At the most basic level, they should be companies that have billing and contractual relationships with lots of customers that fit your ideal customer profile. Simple!
Of course, defining an Ideal Partner Profile is more nuanced that that, but partner strategy should really be driven by three motivations:
- Will the partner bring you leads?
- Will the partner expand your capacity to deliver more projects or activations?
- Will the partner provide complementary technology to deliver a better customer experience?
If the partner does not fulfil any of the above, they will not deliver sufficient value and will become a drain on resources. ChannelCreator typically defines 5 to 10 characteristics with which to identify ideal partners and uses these to ensure that the ecosystem develops in line with the objectives of the partner strategy and program. If you need help defining your Ideal Partner Profile you may want to consider a ChannelCreator Clinic as a quick way to achieve this.
Create a Partner Sales Kit
Finally, when selling through partners, a start-up should be able to sell with velocity, just as with direct sales engagements. In order to ensure that this is the case, the sales funnel should be documented, a lightweight CRM process designed so that stages of partner engagement are already pre-configured, and a package of sales collateral prepared so that promising conversations can be followed up immediately to maintain momentum. Many partnership discussions suffer a premature death simply because they are too exploratory and don’t lead to a concrete outcome. Don’t let this happen to your partners – show them that you have a plan of which they they are an important part!
ChannelCreator recommends that a viable Partner Sales Kit should consist of a minimum of the following:
- Partner program
- Ideal partner profile
- Partner presentation
- Partner proposal template (can be a cover note or exec summary at the start of the partner program)
- Partner Ts and Cs (can be General Ts and Cs plus signed acceptance of the partner program in the early stages)
- GDPR flyer – so partners know how you handle their data, and that of their customers
Once all of this is in place, you have a foundation to start building an early-stage partner ecosystem. The next step is to commence outreach and proactively target the partners that meet your ideal partner profile. ChannelCreator supports such outreach in its Accelerate and Augment packages.
Remember, the earlier you start this process, the more manageable your partner ecosystem will be in the future. At the end of the day, building a channel organically without a plan and structure in place will cost you time, effort, resources and profit. A channel does not have to be onerous, and it can prove to be the lifeblood of later-stage companies. As such it is a necessity: if you don’t have one yet then start considering it!