Launching a Partner Program: Why, What, and How

Disclaimer: This is not a representation of Marketo’s Partner Programs.

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.

To create a successful program, the partnership must be a win/win for both your company and your partners. You want your partners to gain more visibility, business growth, and validation.

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. To drive more value, however, it’s critical to invest in 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 Differentiated Program

As you start to differentiate your partner levels, you may want to create levels 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.

Here is an example of how you may want to structure your program levels:

1—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.

2—For the second level, 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.

3—The third level 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.

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 should 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.

If you’re creating a partner program that’s intended to drive revenue 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.

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!

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