This is part 1 in a series on channel partnerships.
The dream sales executive for your startup is:
Paid in outcomes, no base salary that reduces your runway
Reaches a huge audience without a giant marketing budget
Known and trusted by your target customers already
In reality, this person doesn’t exist, however it is what you can achieve with the right channel partnerships.
Channel partnerships supercharge customer acquisition by multiples. In a channel partnership, your product is sold in parallel to another company’s portfolio. Instead of directly selling to your customer, you empower channel partners to sell for you. Channel partners aren’t going to do this without mutual gain. Your solution must add value to the problem they are solving, increase engagement and/or increase retention. It’s hard to find alignment to make this happen, but when you do, it will allow you to rocket your way to an empire.
While the process is similar to sales, there is some nuance in how to establish partnerships. The process is the following: create an ideal partner profile, fill out your pipeline, execute conversations, and sign the deal with your ideal channel. Let’s get started.
Create an ideal partner profile and build a list
Before you think about channel partnerships, you need to have a solid understanding of who your customer is. If you haven’t built an ideal customer profile, this resource from Built In, a MATH portfolio company, can help you build those out. You should know what their pain points are, where they engage and any other details that are relevant. This profile should be incredibly focused so that you can demonstrate real ROI from the partnership right from the start.
To create your profile, think about what other companies are solving part of the problem your company solves or are adjacent to the problem you are solving. To illustrate, let’s assume you are a health insurance to freelancers looking at the whole freelance landscape. Where do freelancers go for information to run their back office more effectively? What software or tools are they using to run their business? What associations or communities do they engage in? Spend some time listing out all of the types of engagements freelancers have with other businesses. They need tax and accounting software, engage in the freelancers association for marketers and attend freelance conferences.
The next step is researching and creating criteria. Create a list of the companies, associations, communities and/or events where you can find your target customer. Next, evaluate each of these by a few different dimensions. The first dimension to define is what problem that entity is solving for your customer and the solution they provide. The second is how your company adds value to that solution. Get granular and make sure to address multiple value-adds. Do you increase retention? Do you increase total contract value? Do you increase engagement in their product or community? The next dimension should address your ideal outcome from the relationship – will it increase leads? Increase sales velocity? What is the maximum potential for the relationship – will you reach an audience of 2M people? Quantify as much as possible because it will help you establish KPIs for the partnership.
Give the channel partner the ammunition they need to convince their sales team to market your product. It must be a win-win, otherwise the partnership won’t last.
Open your network and know who your contacting
The next step in the process is to determine the level of difficulty in establishing a partnership and reaching the right decision maker. Take a look at the list of entities previously identified and turn to your network. When thinking about the partnership, you must consider the human that you will be working with to establish the partnership. What is their role? How will this partnership make them a hero and accelerate their internal goals? Be sure to get specific about their title, who they report to and what decision making power they have.
Some companies have specific partnership programs, like HubSpot. They work with channel partners, providing them content and discounts in order to access their communities for marketing. This is a great way to easily get in contact with decision makers. Make sure to add this to your matrix.
At this point, you will determine which partnerships seem more lucrative based on ease of contact and the potential impact on your core metrics. You are armed with all the information to start outreach.
Make sure to check back next week for the second installment of this series where we will cover how to initiate contact with partners, negotiate a partnership and set yourself up for success.
When researching partnerships for your startups, where do you turn? Feel free to let us know in the comments or reach out to MATH or me on twitter.