Expand Your Revenue & Growth Potential With A Superior Partner Ecosystem
Forrester estimates that 75% of an organization’s sales flows indirectly through partners (2018). As SaaS vendors continue to grow and expand, and companies increase their dependency on their solutions, it’s imperative that vendors look to extend their influence by leveraging their partner program.
One of the most interesting developments in the vendor-partner dynamic is the extension of the relationship beyond a simple Sales motion. Leveraging partners in Post-Sales is the next big opportunity because they provide global reach, scale, efficiencies and expertise – all of which are often hard to build organically.
In this article, we evaluate the different types of Partner models you can leverage and provide strategic recommendations on how to drive a fruitful Partner program that exponentially increases your recurring revenue potential.
Types Of Partners
Before you embark on a Partner relationship, you need to evaluate the different types of partners programs and what motivates them.
1. Sales / Referral Partners:
Referral Partners generate leads and Sales opportunities in exchange for commissions and margin. Referral Partners typically are an extension of your Sales organization and are transactional. In some cases, these partners will provide co-Marketing and shared training programs. Sales / Referral Partners are motivated by the commissions they receive from the transaction.
2. Services Partners:
Services Partners are typically engaged in the delivery of your services on your behalf, either directly or via a subcontracting relationship. These services are either complementary to your service offerings or they provide a skill set or domain specific knowledge to augment your team. Services Partners are motivated by services revenue, and are focused on “time and material” engagements.
3. Strategic (Alliance) Partners:
Strategic Alliance Partners can be considered the “holy grail” of partnerships. Not to dismiss the value of the other two Partner types, but Strategic Alliance Partners go beyond the initial transaction by focusing on the longer term, bigger picture. These partners will, in many cases, own the customer relationship from acquisition all the way through to expansion and renewal. Strategic Partners are motivated by driving adoption and value for the customer and expanding the use cases to get additional value and revenue for your company.
Finding The Right Partner For The Job
Before you start extending your ecosystem to include Customer Success Partners, you need to have defined the right profile for the job. Customer Success is the “long game” and the partners you choose should be committed and invested in being part of the journey with you. As you build these meaningful interactions, ask yourself honestly; does my organization have the right partner strategy in place? Am I leveraging my partner ecosystem to its maximum potential? Are my partners truly partners, or are they just resellers?
Here are some things to consider as you look at your Partner ecosystem for Customer Success.
- Focus & Motivation: Are they focused on driving larger services revenue or are they motivated to deliver value and outcomes for their customers (leading to additional subscription revenue)?
- Preparation: Do they have a Customer Success mindset and Practice or are they retrofitting existing consultants to deliver Customer Success?
- Domain Expertise: Do they understand your business? Can they provide true adoption services to help drive value and outcomes?
- Geographic Reach: Do they operate in areas that extend your reach and compliment your current teams or are they focused on a specific geographic region?
When building your Partner program and securing the right relationships, you need to verify that potential partners are focused and motivated on your customers’ long-term success and outcomes and will be incentivised to drive future subscription revenue, not just services revenue. Ensure they have a Customer Success mindset and have established a Customer Success practice that is focused on your customers’ value and outcomes. Leverage partners that have the right domain expertise, not the “jack of all trades,” and those that can give you a geographic reach beyond what you have today.
Partners for Customer Success
A Partner Customer Success strategy is critical to your growth and scale. Just imagine if McDonald’s tried to expand on their own; would they be where they are today? Think about their franchise model, how McDonalds’ managed to set their franchisees up for success and manage the consistency of execution and delivery.
Think of your Customer Success Partner strategy as similar to the McDonald’s franchise model. You are trusting your Partners with the success of your customers so make sure you are investing in your partners and measuring their success properly.
Consider these guiding principles as you develop your own Partner program:
- Defined Success Methodology: Do you have a defined Customer Success strategy and methodology? It’s critical that you do and that youshare that methodology with your partners. Onboarding programs, runbooks, playbooks, guides and documentation are all vital to guaranteeing your partners’ success.
- Enablement: You must invest in your partners and confirm that they are properly enabled. They are representing your solution and it’s imperative that they are well prepared to engage with your customers.
- Share your Tools: Are you using a Customer LifeCycle Management platform to manage your customers’ experience? Do you have a 360 view of your customers? Share those tools with your partners so that they can have complete visibility on what your customers are doing.
- Data & Insights: In addition to sharing your tools, it’s also critical to share the data and insights that you generate about your customers. Make sure your partners are using the same adoption and health metrics as you are to ensure that you are both looking at the customer with the same lense and reacting to risk and expansion together. However, sharing data might require you to work with your data governance team so engage your data governance team early and ask them to help solve for sharing data with third parties.
- Measure for Success: Measure your partners the same way you would measure your own team. Adoption, outcome achievement, risk management, expansion and upsell opportunities, GRR and NRR are all effective measures to affirm that your partners are driving the right Success motion.
- Partner Success Manager: Invest in resources to assist, coach and mentor your partners. Just like McDonalds, you need to verify that your partners are following the recipe for success. Assist them when they need help and hold them accountable to meeting your standards.
- Incentivize Properly: When your partners excel, make sure they know it and are properly incentivized. When they don’t, they should also feel that pain. Just like with CSMs, having the right incentivization strategy will go a long way in driving the right results and behaviors.
Extend & Amplify Your Customer Success Capabilities
A solid Partner program is a powerful component of expanding the growth and reach of your overall business. In addition to growing your sales footprint and diversifying your user network, they also act as an important nexus between your company and your customers. The impact of an extensive and effective Partner ecosystem on sales, market share, innovation, and brand recognition can be enormous, pushing your growth potential far beyond your internal capabilities.
Do you have the right Customer Lifecycle Management platform to effectively operationalize and scale your Partner program? Read our article about the 6 critical criteria for evaluating Customer Success technology.