The secret sauce of a successful business
Small business owners work hard at building their businesses, putting in long hours, and wearing a lot of different hats as they fill whatever role is necessary to move their venture forward. In order to be successful, a business needs a lot of ingredients and a whole lot of things need to be done right and need to go right. One of those key ingredients that I see most often neglected is a partner program.
One of the key generators of revenue and sources of cost savings in businesses small and large is an effective partner program. In fact, it is not uncommon for a partner program to be responsible for the majority of the revenues of a company. The manner in which you engage new and existing partners is a key to unlocking automated growth for your business.
A partner can be a vendor, contractor, distributor, retailer or supplier. You should always be looking for complementary partners as well as for ways to leverage existing partners for co-marketing. Once you establish this ecosystem of reciprocity, you will never look at marketing in the same linear light. When you work with partners to market to the same target customers, you reduce your total acquisition cost by leveraging existing marketing funnels that both sides have established.
Quite simply, creating a partner ecosystem will boost revenue in ways that the typical SMB marketing strategy cannot touch. Once you have found a way to leverage partnerships to scale your acquisition, you will wonder why you never did this before. Sharing marketing funnels and leveraging each other’s existing customer network is one of the fastest ways to grow business.
Briefly, a partner program can be defined as: “a strategy to motivate and engage channel partners to create more value for customers.” Channel partner programs are so successful that thousands of companies use them including some really big names such as Microsoft, VMWare, Oracle, eBay, Mailchimp, Shopify and Citrix.
Despite the potential for huge success, creating successful partner programs is by no means easy. It involves a significant amount of time, effort, and most importantly, strategic planning. You must remember that:
- Channel partner programs are an extremely rewarding way to expand into new markets. However, they do require a mature product or solution.
- Not only does creating a channel partner program require a big investment of time, effort, and resources, but the results also take some time. It is not unusual for a channel market program to bear fruit after a year or more. This is why your partner program must be aligned with the company strategy and business goals and you must have executive support before you kick-off the process.
A well-designed channel partner program will always deliver value to the end customer. In fact, the best channel partners and the most successful are those who look at your customers as their customers too. The success of a partnership and channel sales lies in the value each party gets out of it. So who you partner with largely depends on what value you are building for your customers. Once you know that, you will need to identify and define the type of partners that may be relevant to your business and choose the best among them.
Remember that a partner is any company or organization that can help you deliver more value to your customers. Here are a few examples of partners:
- Tech integration partners: You provide these partners a platform to create new features and functions for your end customers. The incentive for them is your existing customer base. The App stores run by Apple and Google are a good example of this. Both tech giants have an operating system and allow developers to create new apps for their platforms. These apps deliver a lot of value (and joy) to Apple’s and Google’s end customers.
- Channel resellers: The ideal reseller helps you roll out your product or service in a location you are not familiar with, such as another country. These partners understand local laws, regulations and culture and help you ensure that your product or solution makes a smooth entry into the market and gradually establishes itself. The advantage of having local partners is that they are seen as trustworthy by your end customers. You cannot evoke that level of trust because you don’t have a presence in that market yet.
- System integrators: These partners build more value by combining your product or service with other solutions. This could be complex solutions such as those designed for the Internet of Things, where different companies combine different technologies and operating networks to build better products and solutions for their common customers.
Sometimes businesses have hundreds of channel partners. A well-structured strategy ensures that everyone is on the same page and is working in exactly the same way to create value for the end customer.
Typically, businesses create several resources and put in place incentives to attract and motivate their channel partners. These include the obvious ones such as a revenue-sharing arrangements as well as the following:
- Amazing sales and marketing tools: Your partners are given top-notch professional sales tools to take to your end customer. Ensure that these tools are as good as the tools you give your internal sales team.
- Education and training programs: Education programs where your partners can learn valuable practical skills are extremely rewarding in the long run. But they require considerable effort to create. So if you are taking the trouble to design them, ensure you do it well.
- Certifications: Software and hardware solutions that require the partner to get involved with implementation and maintenance can be a risk for your business if they don’t work well, and can also create problems for future sales. To prevent this from happening, ensure that your channel partners completely understand your product or solution and are well equipped to troubleshoot. You could motivate your channel partners in this regard by creating hardware and software certification programs that they can participate in. The partner views certification programs as an investment in their growth. This motivates them to work more on your specific solutions.
- Excellent sales support: When your internal sales team has problems of any kind, they easily run over to developers, engineers or other colleagues in your office to help them solve these problems. Any good channel partner program will ensure your channel partners have the same easy access to your qualified staff.
- Lead platform: In some channel partner programs, you distribute leads to partners to keep them engaged and interested. This can be done in many different ways depending on the set up. You could have excel sheets, emails or an internal messaging service to send leads out. No matter what system you use, make sure you follow up on these leads with your partners.
- Events: Getting all your partners together at an event is a good way to educate and motivate them. At such platforms, partners can exchange ideas and have insightful discussions, which are valuable for the sales process.
Your partner program will have some or all of these elements or even more. It all depends on your resources and goals. To build a successful partner program, get these four core elements right:
- Motivation of channel partners: Many companies overlook this very important point. Their reasoning is that partners should be motivated enough by the revenue-sharing arrangements they have with them. But this is a short-sighted view that ignores the fact that channel partners are essentially your extended sales team and that you should invest the same amount of energy into motivating them as you do your own internal team. Besides revenue, motivators include those mentioned above such as education programs, top notch sales tools, leads, certifications, strong sales support, and collaboration to build new and improved solutions for the end customer.
- Clear and direct communication: This element determines whether your partner program will succeed or fail. Clear and consistent communication enables your channel partners to understand your solution and your end customer’s requirements completely even if you do not meet or speak to your partners every day. One of the most important things you can do on this front is to ensure that all the information about your company and your solution in sales training tools, brochures, and sales presentations is extremely clear with no room for interpretation. The message in all of these resources must be consistent.
- Tools to close sales deals: A good sales experience leads to better customer loyalty and more sales. Make sure that you create spectacular sales tools such as presentations, articles, documents and videos that your channel partners can use to close deals and deliver more value to your end customers. Some examples of sales tools for partners include pre-written emails or email templates, sales presentations, product demos, customer profile and buyer persona guide, competitor information and customer references. All this takes a massive amount of effort to create, but it always pays off in the long run.
- Remove blockers: To ensure that your partner program is successful you must remove any roadblocks that complicate the relationship between you and your partner. Examples of blockers include long or egocentric agreements, low quality sales material, slow communication, low-quality education programs that make it difficult for your partners to understand the ins and outs of your product/solution, which subsequently makes it difficult for them to sell it.
The above is an edited excerpt from an e-book that I am co-authoring with Daniel Nilsson and Bardia Dejban.