Channel Partnerships Part II: Engaging and Closing Partners

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:

1. 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. 

2. 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? 

3. 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.

4. 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.

Channel Partnerships Part I: Building an ideal profile and selecting the best

This is part 1 in a series on channel partnerships.

The dream sales executive for your startup is:

1. Paid in outcomes, no base salary that reduces your runway

2. Reaches a huge audience without a giant marketing budget

3. 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.