Here are some of the interesting questions a number of our participants at Tenego Academy have asked. Thank you to everyone who asked questions, I hope the answers will give you some good guidance. Also, see previous blog “The Hard Questions in Partner Recruitment“.
1)“How much time does it take to start working with partners?” (Pavel)
You can start partnering very quickly depending on what you’d like a partner to do:
• If at a minimum, you want a referral partner, then how long would it take to train a prospective partner to have that initial prospecting conversation and qualification questions with some of their existing customers? This is the greatest capability, generating qualified leads.
• For Sales; how long would it take to train them in initial sales presentations, and maybe even a demo? You can help them for the first opportunities and then support them to become self-sufficient
• For Implementations; you need to consider their technical capability for solution implementation and THEN their domain knowledge to enable the end-customer to get the fullest value from your solution.
Of course, time spent finding the right type of partner is just as important for this to work properly.
2) “What are best practice tactics in forecasting and reporting within Reseller and lead and opportunity reporting in referral partner channels?” (Bob)
Referral partnerships tend to be ad-hoc by nature, in that they refer to business only when the opportunity arises. Referral partners are rarely proactive in chasing the market for your type of business. Due to this, Referral Partnerships can be difficult to forecast. They are also unlikely to be driven by targets in selling your solution as they are focused on selling their own.
The most practical way to forecast any partnership is in understanding how their business operates. Understand the rhythm of their business, then seek to determine how often opportunities for your product show up in the partner’s sales process. For proactive Resellers, this should be easier, as they have a defined marketing and sales engine. For Referral partners, you should understand how many new customers they are seeking for their own business, then what percentage of their activities are focussed on your type of customer or how often would they come across a need for your product…
3) “Proven outreach email examples. – target contact to JV partner acceptance conversion rate. – acceptable benchmark sales conversion rate before approaching JV partners. (EPC or EPR for webinars/VSLs)” (David)
Your question raises many more questions! It sounds like you’re asking about a marketing process for Affiliate JV partner recruitment for a marketing-driven web business and it also sounds like you are recruiting a large number of partners from a very large pool of possibilities. Much depends on how compelling your partner proposition is and how well it stands out from the competition. Email examples, EPC, EPR, VSLs, any metrics, and any benchmarks are only relevant within the same product areas. In any campaigns, you are seeking to get more direct responses or conversions and have fewer sales work to do later in the process. This requires constant effort and trying new ideas.
4) “Should you have multiple partners in a (small) target market competing with each other. Or is it better to save your AND their energy and focus on only 1 or 2 with clear demarcation in area or sector to determine which potential deals fall to which partner?” (Wouter)
How many partners should you recruit in a market? The ultimate goal should be market coverage. Initially, partners should be recruited such that you are leaving room in the market for them to be successful and not competing with each other with your product. Through this you commit to helping each partner be successful in their focussed markets, you limit channel conflict.
An advantage of having many partners is that it allows you to spread the risks of low or non-performing partners and enables you to build a more stable, forecastable pipeline across your partner network.
A disadvantage of having many partners is your ability to support them and manage conflict. If you can have clear boundaries on where partners are selling, this does make this easier. Boundaries can be implemented in so many ways; Geographical Region, Industry Sectors, Application/Functional Areas within target customers, Prospect Registration, Deal Registration, and so on.
In short, it is better to start with a small number of partners with clear boundaries, giving each partner plenty of space for success and giving you time to gain a better understanding of how you want your sales channel to work and scale.
5) “We are a very small company, targeting some large partners. What are the best strategies for dealing with both the power mismatch that comes with the size difference, and especially with the time/personnel demands that come when a large partner is actually landed? How do you keep it from overwhelming a small company?” (Michael)
I have seen large partners unwittingly nearly kill small companies. They have a tendency to swallow them up in meetings and the slow sales cycle of the large company can drain the small company’s time and resources. I would see this as the greatest risk.
If your proposition is of value to the joint customer, then there is no power mismatch. I would argue that the power mismatch is that the deal means much more to you than it does to them.
Agree a clear engagement process, defining when and how you get involved so you can assess your investment in an opportunity. How many smaller partners or customers can you deal with in the time being spent with the larger partner?
6) “What are the biggest challenges when it comes to onboarding partners in IT, especially when partners have multiple partnerships? How to handle partners behavior where leads are not initiated by them?” (Nina)
If your partner is selling many solutions, and even competing solutions to yours, the biggest challenge is in getting the salespeople to recognize and understand when your solution fits. Inputting your plan in place with the partner, you are aiming for ongoing activities to engage customers, and seeking new customers that fit with the partner’s existing activities. The more opportunity you demonstrate, the more attention you will get from them.
It’s important to offer strong support to prime the relationship and enable the partner. The partner needs to be trained in selling your product and to recognize the similarities and differences from the other products they sell so they know when it is appropriate to recommend yours. Your partner support can also include getting involved in initial sales opportunities. Then, when you pass on partner leads, you can see how these leads are dealt with.
7) “What discount and referral rates for partners for a SaaS company?” (Philippe)
Referral Partner commissions or discounts can vary from 5% to 25% based on the challenge in getting to decision-makers (in large companies for example), the value of the deal, or the margin in the deal. For example, 10% of a small deal or $5k pa may not motivate your partner. On the other hand, 1% of $500,000 could be a strong motivator.
Another factor is the effort you are asking of the partner for their referral; are they qualifying the opportunity or just introducing you? Is the partner supporting you right up to helping you close the sale? Then a greater percentage may apply. Do note commodity software solutions / ISVs (very competitive markets and high volume) can command 60% full sales commission.
8) “The best way to structure and incentivizes partner relationships to ensure they remain productive.” (Richard)
Assuming you have the right partner fit, i.e.: your product fits into the partner’s business, then how many other things seem to be competing for the partner’s time?
In order to ensure the relationship remains productive, you should agree to an ongoing market engagement plan with activity metrics, not just revenue. There should be clear streams of activity where you are actively supporting the partner in generating business.
If you want to offer a greater commission/discount as an incentive to increased productivity, then be very clear on the behavior changes you want to see for the extra commission.
9) “Any specific advice for running channel partners across borders?” (Steve)
If partners operate across borders, then you should probably rethink the boundaries you want your partners to operate in. You certainly don’t want to put restrictions on a partner who will help you grow your business.
If you’re happy with the market coverage that you are achieving, and you want to impose regional restrictions on partners, you could have a mixed model with partners by facilitating prospect registration or deal registration outside each partner’s core region. In this case, a small share could go to the partner who ‘owns’ the region.
Your partner borders don’t need to be regional. Reseller Partners will have a greater strength within their own region and may also overlap with other regions. As from Wouter’s question above (Q4), some options include Geographical Region, Industry Sectors, Application/Functional Areas within target customer, Prospect Registration, Deal Registration, and so on.
10) “How do you identify the right type of partners for your business (consultants, tech companies, agents)?” (Victor)
There is much to discuss on this topic and Tenego’s Partner Type Selection process is specifically for this. Some key questions to consider when it comes to Partner Fit:
● Does it fit their existing product set?
● Does it meet the needs of their target customer?
● Does it fit their current and future business objectives?
● Can sales of your product help the sales team to meet their targets?
● What capabilities can they offer you in relation to:
○ relationship with the target customer
○ credibility in your space
○ ability to sell your solution
Thank you once again to those who took the time to ask some thoughtful questions. This really helped to highlight the areas of concern for our audience and the questions have been addressed in detail during our webinar, “Software Partner Recruitment for Grown-Ups“.Thank you to everyone who asked questions, this makes the webinar much more interactive and I hope the answers will give you some good guidance.