“If you’re doing something unique, conventional wisdom doesn’t always apply.”Peter Caputa, CEO of DataBox, former VP of Sales and originator of HubSpot’s renowned partner program.
The safest time to launch a partner program is way past product-market fit – when you have numerous happy customers, great reviews online, and your word of mouth sales are increasing faster than your overall growth rate. But what about those success stories we see and hear of when the teams or individuals push their programs much earlier than this? What about those environments allowed their partner programs to prosper?
I’ve spoken to three individuals this week who did such that – launched their programs “early.”
CEO at Databox and originator of HubSpot’s now-revered partner program.
Peter went against his peers and pushed his ideal program through. Without Peter, HubSpot would be nowhere near where it is today. (more on this story below)
CEO at Kiite
Joseph recognized that partners were going to be necessary in order for his product to be sold without having to add a lot of new staff and enablement processes to his org. (more on this story below)
From my interviews and experiences, I’ve learned the main criteria that needs to surround the partner ecosystem for it to be successful, even necessary, earlier on. Those criteria are:
- ICPs are going through a major adjustment.
- There is a lot at stake around the decision to implement you or a competitor.
- Your prospects are involved with an agency or consultant to advise them on this transition.
- And finally, your tool should (not a must, but it helps a great deal) solve a MATERIAL need.
If each of the above is true for your solution, it is time to start a partner program.
Key Takeaways from this article:
- What is “early” in terms of partnerships for a software company?
- What needs to be in place to ensure the success of an early partner program launch.
- Affiliate vs Strategic vs Referral partnerships.
- Examples of effective partner demand generation.
- Plus a case studies from Kiite.ai, HighLevel and HubSpot’s partner programs.
But before we get into those cases, we need to understand the components of a “Partnership”…
Types of partnerships
Referral / Affiliate Model
If your partners are merely affiliates, the leads simply flow through with low touch from the affiliate. This, in turn, leads to little passthrough of education.
Your (contributing) partner = Anyone with an audience on social, an email list, and/or a website with traffic.
Reseller partners have a large part to play in sales, sometimes full responsibility for the sale. Since the partner is responsible for the sale, they are also taking on customer success.
Your (contributing) partner = Those who can resell effectively are typically those in the agency or consulting roles. This is because the agency/consultant has the clients, and is already working on solving the problem that your tool is necessary in solving for their clients.
The goal of co-selling is leveraging the others’ relationship to speed up the initiation and conclusion of the sale. As is in the title, the two parties will “Collaborate” in this sale in terms of both information and introduction extending to the new party.
Your (contributing) partner = Anyone who can give you the correct decision maker > supply an introduction >> and assist in the close.
This relationship with your partner does not require any financial compensation. But, the end goal is usually traffic and conversions which result in revenue. So the goals are the same – mutual financial benefit.
Your (contributing) partner = Those who publish great content or have an influential voice and are willing to take the brand impressions over a check.
Regardless of the type of partnerships your org offers, you must always remember: The people are your partners, not the company.
Building a successful partner program…
Here are some of the items we here at Partner Programs try to ensure are found, compiled, published and formulated before we promote any new partner program.
- Perfect Partner Avatar
- Target Market Evaluation Tool
- Partner avatar Snapshot
- Partner avatar Goals Grid
- The Partner Positioning Statement
- Blueprint to Partner Success
- Program Benefits
- Partner Structure
- Partner Classifications
- Partner Benefits Grid
- “Right to Win” statement
- Partner Business Review Guide
- Partner Selection Criteria and Application Process
- Onboarding Framework
- Onboarding Messaging
- Partner Journey Map
- Partner Engagement Plans
- Deal Registration Workflow
- Partner Program Landing Page
- Partner Based Marketing Rollout
Ok, back to the key aspects of successful early partner program launches…
Let’s unpack these a bit more:
ICPs are going through a major adjustment
This can be personnel, operations, software… But it’s typically one where they are in need of additional support from an agency or consultant.
There is a lot at stake around the decision to implement you or a competitor
If your tool is not that integral in the transition period that your ICP is going through, it may not be time to launch a partner program.
Your prospects are involved with an agency or consultant to advise them on this transition
This is crucial because it confirms they (a) know they have enough at stake to spend the extra money on this added assistance, and (b) provides you with your partner targets.
And finally, in our experience, your tool should solve a MATERIAL need for your ICP
They keyword here is ‘material’, meaning the product has an immediate impact on revenue. This is why products related to sales/marketing are easier to launch partner programs for earlier. These can include customer retention tools, sales enablement, CRM, marketing automation etc…
Now let’s look at three examples of when early launches are successful and even necessary…
HubSpot’s Partner Program
- A lot at stake with this implementation AND a material need – HubSpot powers both CRM and Marketing for thousands of small and large businesses alike. Rip it out, and they would lose revenue immediately.
- Agency Involvement – HubSpot is not an easy tool to implement and customize – an agency is involved almost throughout most HubSpot builds.
HubSpot’s partner program is renowned – Channel sales represented 40% of HubSpot’s revenue in 2017, powered by 3,400 partners. To achieve this, the creator of the program, Peter Caputa, offered some advice for starting a partner program early on:
“HubSpot was designed from the beginning to be a direct selling organization. Against the wishes of the executive team, I started turning marketing agencies into referral source… When I petitioned to start HubSpot’s partner program, I received push back from almost everyone. At the time, HubSpot was in the middle of raising funding and it was absolutely critical for us to exceed our revenue targets… and the executives were worried about the distraction a partner program would bring. By just working with a few agencies, I was already unintentionally causing some challenges for a few other teams.”
Peter Caputa began working at HubSpot in 2007, a time when the company only had 15 employees. Starting out as a sales rep, he quickly became an expert in acquiring new customers via referrals and began advising his prospects and customers of best practices.
Build a repeatable process
Building a partner program requires a lot of process creation, documentation, systems development, and training in order for it to scale smoothly.
Seek and target unserved markets
Part of your research and strategy should incorporate finding and targeting unserved markets that you can tap into. For HubSpot, that was a small business with less than 10 employees, but the unserved market you target will likely be more specific.
Critically look at your strategy, pricing, and focus
Let employees test new ideas without all of the red tape
Small companies need all hands on deck, so it’s easy to understand why there would be pushback on experimenting with new processes or strategies that may take away from the tasks at hand. However, encouraging your employees to identify areas for improvement is one of the best ways for you to optimize your business and make your upward mobility more fluid. One option would be to let employees test their ideas during nights or weekends, as to not disrupt the normal business day.
If you believe in what you’re doing, stand behind it and stick with it
When you bring a new and possibly controversial idea to the table, you will get a lot of haters, especially in the age of the internet. But along with that comes a lot of people that see what you’re doing and end up loving you for it.
HubSpot took an approach that challenged the traditional marketing agency status quo, they took some heat for it but over time they attracted an audience of people who agreed with them.
You don’t always need to listen to conventional wisdom
At the time Peter was implementing HubSpot’s partner program, investors were telling him that it was too early to build a channel sales program and that they needed to prove a larger market existed. They were also told by some venture capitalists that SaaS companies simply didn’t sell through partners.
But as Peter said, “If you’re doing something unique, conventional wisdom doesn’t always apply.”
Continuously set new goals
It’s important to continuously step back and critically analyze the processes and goals in place. Doing whatever it takes to reach beyond the goals you set will keep your partners coming back to work with you.
Kiite.ai’s Partner Program
- ICPs are going through a major adjustment – Kiite is typically implemented at a phase when the business is ramping up their sales team and optimizing sales processes.
- Agency Involvement – Kiite is a difficult product to understand and implement. A consultant is crucial to achieve full-adoption of the complex product.
Kiite was founded in 2017 and sells knowledge sharing software. They help sales teams capture, organize, and share the companies “tribal knowledge” with sales reps to land more deals. While still being relatively new and under 50 employees, they have built a robust partner program that has since proven to be a valuable asset to the startup.
“The most productive partnerships are in response to partner “pull” signals as opposed to trying to “push” your product through a channel. From launch, we immediately saw inbound interest from new customers aiming to use Kiite to deliver solutions to their own clients — launching the partnership program was the best way to service those customers. Delaying the program would have been a disservice to them.”Joseph Fung, CEO of Kiite.ai
Where they were at
The main use case for Kiite’s knowledge sharing software came in the form of sales playbooks, which can be deployed to sales reps and are enriched by AI to help them sell, including competitive details, customer stories, product details, sales scripts, etc. This way, reps have the info they need when they’re on the phone with a particular prospect or client.
Why their program worked early on
Kiite’s partnerships weren’t just about affiliates or co-selling, their partners are using Kiite as a delivery platform for their own consulting work and can share, advocate, and push content to clients on an on-going basis.
It’s hard to ensure adoption takes place when all you are doing is sending over a PDF. Instead, Kiite lets you deploy and track the progress of adoption. This way, there is a symbiotic relationship between Kiite and their partners.
For example, ClozeLoop is a reseller partner of Kiite. Here’s their Managing Director speaking about the relationship:
“Kiite has allowed ClozeLoop to deploy playbooks 5 times faster than those deployed in pdf, doc, ppt, or wiki format. They are able to surface only the relevant information to each individual in an organization creating immediate adoption… Kiite’s completely customizable interface allows ClozeLoop the flexibility of aligning with a company’s existing systems, process, and culture eliminating the need for re-training and workflow interruption.”Hilmon Sorey, Managing Director
Through-Channel Only Products
And we can’t talk about early partner programs without mentioning those who build the entire business with an exclusive through-channel sales strategy. HighLevel is one of these platforms who’s founders decided early on to sell exclusively through agencies.
Here’s what Co-Founder Shaun told me when I asked him about this decision:
“We only sell through agencies because we believe agencies are the key link to help business owners really succeed in marketing. So many business owners try to do it on the side because they think marketing is some kind of part time gig and they get this so wrong. Agencies are what make the difference between a successful business and a failed one.”– Shaun Clark, Co-Founder of HighLevel
This product is perfect for channel sales because, especially in marketing, clients don’t typically care whether you use tool A or tool B. They just want the traffic/leads/revenue. HighLevel empowers the agencies to run most of the marketing needs on behalf of their clients, so the setup is ideal for partnering with those agencies who aim to run all of their clients’ marketing services.