Partnering examples

Many people have read proverbs from the “Art of War” and tried to apply it to business. One that finds great application to today’s business environment is that if you don’t partner up you get isolated and defeated. Similar in businesses, if you don’t create partnerships it gets harder and harder to attract potential customers and keep up with your competition.

Therefore, partnerships is not only a way to create an indirect sales funnel but also it can be proven to be a great way to penetrate into new markets that for some reasons there exist many barriers to entry. For example, in some countries like China, you are required by law to have a physical presence there in order to sell your products or services. If you don’t have the budget to establish a company then partnering with a local company is your best option in order to have access to this vast market.

Another great example is Japan, were it’s in their culture to buy from a local company that would do a demo in person, even if it is for a low cost SaaS product. This culture can be found in most Asian countries and in some cases in Latin America as well.

As things have evolved in terms of products, sales techniques and culture so have the partnership programs and their structure. New types of partnerships have been added to the traditional resellers or VAR model with affiliate, referral and influencer partners that play a significant role in the new partnership ecosystems. Below is a list of some partnering examples and cases of companies that have been using these programs in order to find the ones that fit your company’s needs.

Sales partnerships

Since the beginning of the IT industry the most common type of partnering is the sales partnership, for example establish a reseller network. There are various types of sales partnerships like reselling companies, Value Added Resellers, Managed Service Providers and even consultants.

There are differences among these different types but all are recommended when your product is more sophisticated and your clients need to get trained on how to implement it, use it and make the best of it. Also, these reselling companies can offer a first line of support to your clients, based on your agreements, and therefore ease some of your customer support cases.

Many local businesses prefer to work with a reseller from their area as they feel more confident that they will advise them on their best interests when adopting a new technology and also because they know they can have instant support when things go south rather than engaging with the impersonal support of a multinational corporation. For small and mid-sized vendors this means that they can support companies across the globe without the barriers of different time zones and having to establish an expensive 24-hour tech support.

Some great examples of sales partnerships are obviously Microsoft which has the largest channel partner network in the world and also Cisco with about 98% of its revenue comes from indirect sales.

Establishing and growing a partner network can be challenging, so here’s is a post on how the channel partner recruitment process works. Also, having built a partner network is half of the job, you need to manage, train and enable your channel partners in order to increase your chances of having a productive partner network. A Partner Management software will help you to provide your partners with the right material, train them, track their performance and provide them with the tools to succeed on their mission.

Cisco partner program

The Xero case

Xero partner program

The explosion of Software-as-a-service model and the lower costs of developing a solution introduced many great niche SaaS vendors. These companies focused on specific industry needs or targeted a market segment that was underserved with specialized software tools. Many SaaS vendors brought to market software tools or cloud applications that were challenging to be sold by the traditional IT reselling companies, with some exceptions of course.

One of these examples is Xero that develops and markets accounting software. Although there are some IT companies that resell the Xero accounting software, their partner program targets mainly accountant and bookkeepers as these professionals not only can use the software for themselves but also can recommend it to their clients who in turn become Xero clients. Many other vendor have followed suit to offer their SaaS product via accountant and bookkeepers, like HR and document management vendors with the examples of Hubdoc and Gusto.

If your company is offering a niche product then think out of the box and consider a partner program for professionals who come into contact with your end-users. A PRM software is also need to enable your partner network with the tools and resources they require and also track their efforts.

Affiliate

Some software vendors operate in markets were their clients are well educated on the specific products or are simple applications and don’t require a lengthy sales process that includes call, demos and meetings. In these cases many vendors opt for the affiliate model which is a performance based activity.

In its simplest form an individual can sign up through a portal, get a unique link that she can promote to her followers, readers or visitors. The link is being tracked and for each successful sign up or new customer the individual gets a percentage of the revenue that is being generated. Some companies provide a financial incentive even for trials or sign ups, which depends on the unit economics and strategy of each vendor.

Due to its simplicity and zero upfront costs many companies opt in for an affiliate program although in many cases it doesn’t really generate much revenue. This is because many vendors create an affiliate program but don’t actively pursue to scale it and attract many affiliates or don’t provide them with the resources to generate new purchases. Many affiliates that have a big impact via their blog or social media accounts will prefer to work with a well-known brand that will make the sale easier rather than a small vendor that has limited reach and credibility in the market.

There are many affiliate marketing software tools to help you keep track of the purchases, mitigate potential fraud attempts and payments to your affiliates.

Referral

Many IT companies, vendors and channel partners alike, choose to establish a referral program for individuals, current customers and consultants to refer potential clients. Many companies create a referral program mainly for their active customers to refer other they might know so in order they can get a gift card or credit to their account.

On the other hand, there is a growing trend from software vendors that offer referral programs targeting consultants. These consultants can refer a new customers, get a financial reward but also gain from implementing the software or training the employees on how to make the best out of it.

While many companies try to manage referrals in-house with simple forms and spreadsheets this is not the optimal solution. It would take much time to track all the referrals, reward the proper people and also take into consideration possible mistakes from manually handing spreadsheets. Using a referral marketing software can make the whole process seamless and also with the right integrations can help you automate the process of scaling your efforts and incentivizing your partners.

Marketing synergies

In the SaaS space a lot of companies have discovered the power of synergies with other vendors that offer complementary products. These companies target the same group of users and therefore create joint marketing campaigns so one can provide their offering to the others customers or users.

A typical example is a SaaS vendor to offer a discount coupon from another vendor to their customer base or visitors while the other vendor does the same to their clients. Tracking and analytics tools make it easy to track the performance of such campaigns. While it doesn’t always stand true but for many cases we’ve seen that the average adoption of such initiatives is around 2%, meaning that this number of people will purchase the offer. If the products are truly complementary this number can go up and create even more successful campaigns.

Maybe this number doesn’t seem much to you but it’s a great and inexpensive way to attract new customers and in case of recurring purchases it can increase the value of the campaign.

Ambassadors

Ambassadors are similar to referral partners although in some cases they may have a different relationship with the vendor than traditional referral or affiliate partners. Brand ambassadors are usually hire by a company to increase the awareness, credibility and sales.

Therefore, ambassadors are individuals that either are well-known or have expertise on a specific industry and influence a lot of people. While referral partners and affiliates can be anyone that would like to join the partner program, ambassadors on the other hand are established professional figures or in some cases they hold a celebrity status.

Influencer Marketing

The explosion of social media and its endorsement by many celebrities has provided a new way of partnering, namely the influencer marketing. The influencer marketing has in some cases substitute the affiliate marketing, especially for B2C products. Companies try to discover influences with a large following to promote their products although the reward scheme can be different from the traditional affiliate model with some influencers.

Identifying, engaging and launching a campaign via influencers can be very daunting due to the vast amount of people that can have a positive effect on your target market. That is why a large number of influencer marketing platforms has sprout to help you identify the right influences, connect with them and track the performance of your campaign.

Partnering with other individuals or companies is a great way to get more exposure, awareness for your products and services and it can help you penetrate new markets. But having a partner program in place won’t do much unless you devote time, effort and resources to your partners. As you expect them to generate demand for your products the same way they expect you to have a sales process in place, a credible brand name and the resources to support them in their efforts.

So before you decide which partner programs are the right for your business to adopt, start creating a plan on how to create the right environment for your partners in order to thrive and grow.

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