Investing in Partnerships: When & Why

Since I led the Marketo partner ecosystem, many VC funded B2B companies have asked me “When is the right time to invest in partnerships?” — most recently as part of their 2017 planning. Here are a few common points to consider as you develop your plans.

#1 It’s Never Too Early — many recognize the value strong services and technology partners can provide in the long term to drive opportunities, revenue and competitive differentiation. But more often than not they are dealing with more pressing issues to address in the short term. Product releases, bug fixes, closing sales and providing excellent customer support top the list of items mentioned. However, many companies are at a minimum thinking about and putting into their plans how partners can, or in the future will be able to, accelerate their growth.

A great example is thinking about how your software roadmap can support service partners to promote and enable their “plays” to provide greater customer value. Perhaps it’s a partner provided service that will support customer training, implementation or support for your solution. Another is building the foundation for a platform, not simply an application, and scheduling the roll out of APIs to technology partners and system integrators that complement and enhance your customer value with each major software release.

#2 Know Your Partnering Objectives — what do you want from partners? The default answer is typically “to drive new revenue”. However, many companies may do better to take a building block or phased approach to partner development that allows a more gradual investment by partner type while setting appropriate expectations — within your company and with the partner.

The following examples highlights some different partner objectives you may have over time.

Scale — does your offering require implementation, consulting or other professional services? Could this be a potential roadblock to scaling your business? Considering how partners could provide these services for you. Salesforce.com early success in scaling their business is in part due to their partner-only strategy for implementation and consulting which led to the rise of their large ecosystem.

Awareness/Reach — partnering with larger firms brings credibility. This is especially important for smaller firms selling to larger enterprises. It provides the opportunity to efficiently expand your reach by targeting explicit, well-defined customer communities (your partner’s customers and prospects) with a very focused message to open more doors.

A great example is video platform provider Vidyard making the strategic decision to invest and align with larger marketing automation companies including Marketo and Oracle Marketing Cloud to drive awareness and demand generation. They successfully developed specific value propositions for marketing automation customers, then marketed and sold directly to these communities via events, joint webinars, etc.

Win Rate — some partners may not bring new opportunities, but may help you win the ones you’re already engaged in. Technology partnership may fill feature gaps enabling you to be more competitive on RFPs, customer presentations and demonstrations. Service partners may have stronger existing relationships with your prospects, increasing the win rate when they are involved.

New Business — the holy grail. You want partners to refer new opportunities leading to greater pipeline and revenue growth. Your % of business sourced from partners should grow as you move down your company and partner maturity curve from single to double digits.

#3 Don’t Forget Programs — it’s all too common for venture-funded companies to underestimate the resources to get partners productive. Simply hiring a great business development individual or team is not enough. These teams need a strategy, cross-functional programs and operational support to complement their partner management efforts. These programs are often supported outside the business development or partnership team by product & customer marketing, demand generation, events and content marketing, sales operations and enablement.

A few examples of budgeted and executed partner programs that are needed to deliver on partner objectives:

• Partner Enablement — how-to or self-service presentations and videos to educate and train partners. This content is especially important as you recruit a greater number of partners and standardize your go-to-market.
• Co-Marketing — communicate the joint value proposition for your combined solution through multiple channels as you would your own. Co-fund these activities with effort and budget.
• Co-Selling — establish a program to share and map your target account lists and then engage prospects or upsell existing customers together. Let the partner with the strongest relationship quarterback.
• Co-Innovation — can the power of your combined entities develop new products or solutions to address opportunities that neither could do effectively address alone? This may involve both technology and service partners. Leveraging the co-innovation centers and programs of larger enterprise platforms could open up new opportunities for you.

It’s not a question of will you partner, but when. Thinking about this early pays off sooner than you may think.

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