This is part 2 in a series on channel partnerships. You can read part 1 here.
Channel partnerships can 10x your customer acquisition and are one of the best ways to grow your business. In the first post of this series, we covered how to create an ideal partner profile and identify potential partners. In this post, we will discuss how to build a value proposition that ignites initial discussions, negotiate a contract, and prepare for launch.
You’ve got a solid list of contacts that could be potential partners to your startup. Now you need to start outreach.
Develop a strong partner value proposition and test
Thankfully, in preparation, you defined how your company adds value to the partner’s solution and identified the ideal outcome for the relationship. Writing a value proposition for partners builds upon the value proposition for your customers. If you need help in writing your customer value proposition, I recommend using the Jobs to be Done framework. To do this, write a succinct sentence on how your combined forces make your end customer even better off and provide meaningful benefits to your partner, like increased revenue or improved customer experience. You’ll also want to allude to how you will do that – is it training for their sales reps? An integration into their app marketplace?
The best way to test this value proposition is by reaching out to partners and testing your value proposition. Start with friendlies who may already be in your network through warm introductions and share your value proposition. Pay attention to the questions that they are asking, how they talk about both the customers and themselves, and use that information to further shape your value proposition. A great way of doing this at scale is at a large conference for your industry or customer. You can talk to hundreds of potential partners in a day and refine your value proposition based on your discussions. You’ll want to nurture these leads just like a sales lead – down the funnel through multiple discussions where you can validate the needs of your partner and customer until you can find mutual alignment.
This is a fundamental exercise in empathy - their needs come first.
Negotiate a contract
The next stage in the process is negotiating a partner contract, where you clearly define how you will both work together to improve your customer’s life. There are a few key areas in the contract that you will want to pay special attention to in order to set both of you up for success:
First, you will clearly define whether it’s a sales or marketing agreement. This comes down to who is closing the deal with the customer – is your sales team getting signatures and billing the client or are you a pass through cost on a larger contract where the partner’s sales team is selling your product.
Then, you’ll have to define how you will work together. Make sure to consider all the parties that will be affected in your organization as well as the partner organization. Will you provide training? Sales enablement materials? Access to an email list? What are the specific ways that you will be reaching the partner’s audience and who will be involved?
Don’t forget to get paid! Make sure that you clearly outline how and why you will get paid, aligned with the objectives outlined in the engagement.
Finally, you’ll want to clearly define metrics for success. Is it increased leads? Increased engagement? Less volume in customer service? Larger ACV? Decreased sales cycle? You will also want to define a cadence where you will be reviewing the effectiveness of the partnership. We recommend a quarterly business review with your champion and the economic buyer.
By writing this all into the contract, you will avoid surprises down the road.
Prepare for launch
Now that you have signed a contract and defined how you will work together with your partner, you must get ready to launch the partnership. This video from Troy is a good primer to review before you start digging into the tactics of launch. You have to start with the purpose and be intentional about meeting that purpose as you plan your execution. If the partnership exceeded expectations on both sides, what would that look like? How would that impact both companies and the individuals involved in partnership? First impressions matter! You have to come out of the gate swinging, a couple of early wins are crucial in building momentum and buy-in from the broader organization.
Once you get your purpose written and defined, you can dig into execution. Utilize the contract to create a scorecard for measurement and to define tactics and deliverables for launch. Make sure that you’ve nailed the reporting in advance so you can constantly measure and tweak your execution to maximize results.
In the final installment in this series, I will explore some of the common tactics used by founders to find success in partnerships.
Did this post help you in building channel partnerships? Let me know in the comments or find me on twitter @MissElisaS.