How fast can you go?
“Going fast while you are lost won’t help a bit.” – Anonymous
“Nothing travels faster than the speed of light, with the possible exception of bad news, which obeys its own special laws.” – Douglas Adams, Author of the Hitchhikers guide to the galaxy
“Experience is simply the name we give our mistakes.” – Oscar Wilde.
Table of Contents
The Assumption:
When your direct sales team is meeting your growth targets, you have a proven customer proposition and strong market demand. Confidence is high.
You decide to go for it and target to onboard six partners in the next 12 months to scale international growth. You are prepared to offer new partners a 40% margin. You assume that with the market demand, and your team selling well, then partners can do the same. The assumption is that given your success partners will be engage and get onboard.
The Challenges:
1) Partners are already busy
Consider if a company that contacts you to partner with your company, what are your thoughts?
You are already totally absorbed with your own plans, and how can you, and why would you, take on another company’s solution as well?
When you contact a prospective partner company, not only does your solution need to align with their plans but they also need to have the maturity and mind space to consider a partnership.
2) A Customer Proposition is not a Partner Proposition
Having a compelling customer proposition is a good start, and a very important part of a partner proposition, but just one part. When you confuse your customer proposition with your partner proposition, you’re asking the partner to figure it too many things. The first message or pitch won’t get through to busy partners. Partners do not want to buy your software; they want to see how they can build a business around it.
3) Revenue Share is only one part of a Partner Proposition
The assumption ignores what drives the partners business. 40% margin is good, yet revenue share is often number five on a partner’s priority list in evaluating new solutions. I’ve seen scenarios where the deal size difference was so great, that even if you offered the partner 100% of your revenues it wouldn’t move them. Businesses are driven the winning more of the business they want. Does your solution enable partners to deliver resulting revenue of the type they want?
4) Partner Readiness and Pace
When you secure a partner, you must consider the pace the partner can take on your solution and start engaging the market with your proposition. They’re already busy with their existing plans, with their teams charged up to meet their existing targets. A new solution is asking them to take a risk, so they should proceed with caution, testing the market, slowly building confidence and pace.
5) Partner Recruitment Pace
There is a learning cycle in the hard parts of the Partnering Journey. It takes multiple iterations in the market engaging with prospective partners to learn and develop your target partner profile (the right partner company types, sizes etc), partner fit evaluation, partner proposition with partner enablement and onboarding plans. Starting with a list of prospective partners to contact, comes with a long list of assumptions, hopefully known assumptions that can be validated allowing for better and faster execution. The limitation then becomes how fast your company can onboard partner, and scaling your partner support team in enabling partners to sell, implement and support on your solution.
The Hard Questions:
Before you spend another cent executing your current partner strategy, take these questions into your next team meeting:
1) Are we assuming that all partners, even if interested, are ready to adopt your solution, as they recognise that your offer is better than they existing plans?
2) Are we assuming that because our internal direct sales team is highly successful, external independent partners will naturally be able to replicate that exact success?
3) Are we assuming that offering a 40% margin is enough to motivate a partner, forgetting that license margin is often low on a partner’s priority list?
4) Have we confused our customer proposition with a partner proposition, completely failing to discuss how our solution actually drives the partner’s core business and services?
5) Are we actively building a scalable partner channel with structured enablement, or are we just throwing our direct sales tactics to outsiders and expecting them to figure it out?
The Positive Path:
Well done on the direct sales success. Having a proven compelling customer proposition, and proven effective sales engine is a very strong case and readiness to build the international sales partner channel multiplier.
It’s great that you see the possibilities that a partner channel can bring, and have a partnering strategy, with targets and a willingness to invest effort and funds.
Your executive team is fully committed to funding and driving channel growth. You simply need to align your ambition with the actual realities of the partnering learning journey.
You must build your strategy around the Three Pillars of Partnering Success: Partner Fit, Partner Proposition, and Partner Enablement.
- Partner Fit: This is the number one success factor. Develop clear target partner profiles and strict evaluation templates to stop relying on gut instinct. The less you ask a vendor to change, the more likely the partnership will work.
- Partner Proposition: Define true value. Your proposition must give them a direct competitive advantage to win new business and drive resulting services revenue.
- Partner Enablement: Develop the capabilities needed to support partners precisely at the moment they face a live customer scenario.
Execution plans fail primarily due to issues not addressed in the three pillars, and unknown or unvalidated assumptions. If you want to definitively measure the health of your strategy, take the Tenego Starting in Partnering Diagnostic to uncover your specific blind spots and access the operational courses that provide the exact capabilities you are missing. Visit Tenego.com
