Wayne Lockwood: Launching a Partner Program: Why, What, and How

Author: Amy McCarthy

Throughout the many, many years of working in different aspects of channel management through value-added resellers (VARs), channel partners, or original equipment manufacturer (OEM) partners, I’ve learned firsthand how powerful partnerships can be. B2B organizations, large and small, partner with other companies to enhance their brand, extend their sales footprint, and grow their customer base.

Partnerships can come in several forms:

Reseller and VAR partners are applicable to any industry whether it’s hardware or software, or a product or a service. Any company that needs to grow without the overhead of a large sales force can set up a program for other companies to resell their product.
Technology partners are an integral part of the software world. These partnerships augment your sales teams, broaden your reach, and can provide your customers with a complete solution if the technology is vetted, tested, and adds value to your ecosystem.
Services partners support implementations, installations, support, consulting, or product training. Services partners generally augment the professional services department of a company as opposed to the sales teams.
An OEM partnership is a bit more involved, requiring white-labelling (i.e. rebranding) a product or embedding it into another product, generally necessitating more contracts and billing requirements.

In this blog, I’ll share how you can launch a partner program for your organization—from defining objectives to structuring the program:

Make a Business Case

Before you kick off your partner program, you need to establish what the goals are for the program.

Is it to create an end-to-end solution for your customers? If so, the application and integration of your solutions will be the most important elements, and you may need to provide partners with additional development resources from your team, at least one ‘sandbox’ for development and testing, and full access to API roadmap discussions.
If your goal is to add an extra source of revenue along with the full solution, then sales engagement and co-marketing programs will be critical.

At Marketo, the LaunchPoint ecosystem was developed to provide a comprehensive solution for our customers and to be an additional lead generation source.

To create a successful program, the partnership must be a win/win for both your company and your partners. For example, as a LaunchPoint partner, companies gain more visibility, business growth, and validation. At the same time, our LaunchPoint technology and services partners help make Marketo the world-class, end-to-end marketing platform that it is today.

While business growth is certainly important for Marketo, there’s a more immediate benefit: Our partners add valuable apps that complement our platform to provide best-in-class options for every category of solution needed. These solutions span categories like predictive analytics, social media, video, global translations, content marketing, tracking, and categorizing tools and provide our customers with the perfect solution for their unique business needs. These integrations have helped Marketo grow, stay competitive in the space, and compete, head-on, with other companies that have a non-integrated suite of solutions.

Structuring Your Program

Once you determine the different objectives you’re trying to accomplish, you need to structure your program to allocate your resources appropriately. Most teams don’t have the bandwidth to introduce 200 different partners to the sales team, run all the co-marketing programs requested by each partner, and provide deep developer support to everyone.

3 Basic Levels of Partnership

There are easy wins that you can accomplish right from the start. For example, there is inherent value for our partners to list their solution on our LaunchPoint site without further support from our team. The LaunchPoint site drives traffic to their website and raises awareness about their product’s compatibility with our solution. To drive more value, however, it’s critical to invest in more opportunities for business growth such as co-marketing programs that raise brand awareness for both parties.

If a partner has an integration with your solution already and has mutual customers, you may want to invest time and effort into developing a tighter integration based on a valuable and prevalent use case. Aside from the developing the API, this requires creating integration documents, both companies being available for support questions, setting up fields to sync in a timely manner, and more. This level of support presumes a possibility of greater sales to a larger number of customers and therefore, of course, revenue.

The next differentiation that determines your level of engagement with a partner might depend on–to borrow the oft-used description—how much the partner ‘leans in’. Has the partner provided case studies? Are there mutual customers that can serve as references? Have they participated in your field events, webcasts, or tradeshows? It’s not always about the money they spend, but more so about the partner’s level of interest and engagement in building their business with your complementary solution in mind.

Consider a Tiered Program

As you start to differentiate your partner levels, you may want to create tiers of value as a partner engages further and provides additional lead generation opportunities or revenue commitment. In the interest of mutual benefits and sound business practices, be transparent as your develop partner relationships so that every partner understands what they need to do to gain a high level of support from your team, whether it’s from a Channel Manager or Business Development Director.

The best way to structure a tiered program is to start at the lowest level and build up:

Bottom Tier—Starting at the first level available to a partner, define the minimal level of support they should receive and the level of engagement, such as a website listing, integration documents, and basic support for developing the integration. If they’re a reseller, this could include sales collateral and online training. For Marketo, we provide partners with a listing on our LaunchPoint website, an integration sticker once there are case studies to validate it, and a sandbox for development testing. This tier will have the most partners because it has the least requirements.

Middle Tier—For the second tier, focus on partners that add value to your company—this could include partners that have mutual customers, refer new prospects, or add a strategic component to your platform. For resellers, it could be the companies that have sold a lot of your products and services. Create a go-to-market plan with these partners that supports co-marketing, co-branding of collateral, and mutual lead generation efforts. You may even want to build out a budget forecast with the partner for a joint campaign that provides greater visibility into each other’s prospects and customers. The number of partners in this tier will depend on your team’s bandwidth and the ability to successfully run a marketing campaign with each of the partners.

Top Tier—The highest tier in your partner program should not only include the full go-to-market plan with support for thought leadership programs, press releases, regional events, and a sales engagement process but also the opportunity to meet directly with your customers at an industry conference or user group meeting for further validation of the solution. Additional benefits include a partner advisory board, exclusive access to a new product as the first adopters or resellers, or the option to join in an analyst report.

Using the 80/20 rule— 20% of partners will drive measurable value—the top two tiers will probably equal to about 20% of your total number of partners. Because of the value they bring to the table, these partners should also have access to your sales team and mutual customers and vice versa. For example, when our sales team understands the value of a partner’s integrated solution, they inevitably bring the partner into a sales process to provide prospects with the full solution that they’re looking for. Partners can also bring in additional references to seal the deal. This requires creating sales engagement programs like training, social events, mutual account mapping, and joint customer events.

Here’s an example of a tiered structure you could use (Disclaimer: This is a sample only and does not represent Marketo’s program):

Benefits	Standard	Silver	Gold	Platinum
Additional Sandboxes, Assigned Developer, and Product Support				Ø Included
Press Release Quotes		From a Director	From an SVP	From the CEO
First Option at Summit Sponsorship				Ø Included
Option to Sponsor SKO			Ø Included	Ø Included
Option for Customer Webcast			Ø Included	Ø Included
Integration/Services Certification			Ø Included	Ø Included
Option to Participate in Field Events			Ø Included	Ø Included
Multiple Leads per Quarter: Account Mapping			Ø Included	Ø Included
1 Qualified Lead per Quarter: Sales Engagement Programs		Ø Included	Ø Included	Ø Included
Integration Doc and 2 Case Studies: Integration Badge Highlighted Listing		Ø Included	Ø Included	Ø Included
Listing on Website Developer Hours Sandbox	Ø Included	Ø Included	Ø Included	Ø Included

If you’re creating a partner program for resellers with the sole purpose of driving more revenue through them, the tiered structure will be based on the revenue driven by the partner. In this case, you need to provide sales collateral and training, a co-marketing plan, potentially a SPIF (sales performance incentive fund) plan, and very specific goals and measurement. The tiers for this type of program, based on the revenue levels, might be adding more marketing development funds (MDF), lower costs of product and larger sales incentives.

Ultimately, your partner program may look different than what’s outlined above based on your business model and objectives. The important thing is to think about the outcomes you want your partners to drive and the value you can provide them to promote that behavior. You need to be very specific in the requests and requirements and very generous in the added value a partner can expect. Everyone, including partners, performs better when there are specific goals and benefits.

Make sure you also have a process in place to track everything easily–a partner portal for entering all leads and providing metrics, but a spreadsheet can work as well. The important thing is to be transparent and communicate regularly! You never know which of your partners might be the next hot software app or who could provide the best reseller/services value for your customers. Treat them all as you’d like to be treated by one of your strategic partners. Help them build their business with you and make it a successful win/win partnership.

Are you leveraging the power of partnerships at your organization? Share your best practices below!