A Partner Program is a strategic way to grow your business by leveraging the network, expertise, and resources of other organizations and professionals that share your vision and values. It can help you reach new customers, expand into new markets, increase your brand awareness, improve your product, and create long-term value.
However, developing a partner program is not a simple task. It requires careful planning, analysis, and execution. Before you start, you need to consider some key factors that will determine the success of your partner program. In this blog post, I will discuss these factors and provide some examples to illustrate them.
Market demand: Understanding the Landscape
The first factor to analyze is the market demand for your service. You need to understand the size, growth, and potential of your target market, as well as the pain points, needs, and preferences of your ideal partners. You also need to identify the gaps and opportunities in the market that your product or service can fill or create for the partners.
One way to analyze the market demand is to conduct market research, such as surveys, interviews, focus groups, online research or leverage your network. You can also use tools like Google Trends, Google Keyword Planner, or Bing Webmaster Tools to find out the search volume, trends, and keywords related to your product or service.
Analyze your target demographics, assess competitors’ partnerships, and identify gaps where alliances can be fruitful. For instance, Airbnb’s partnership with airlines tapped into the travel industry’s demand, offering customers a seamless booking experience.
Ideal Partner Profile (IPP): Aligning Values and Objectives
You need to find and select the right partners who can complement your product or service, add value to your customers, and align with your vision and values. You also need to evaluate the compatibility, trust, and commitment of your potential partners, as well as their goals, expectations, and capabilities.
One way to analyze the partner fit is to create an Ideal Partner Profile (IPP), which is a document that describes the ideal characteristics, criteria, and requirements of your potential partners.
An IPP defines the ideal partners for your product or service, based on attributes such as:
- Industry: for example IT, consulting, software, or business services.
- Size: Small to medium-sized businesses (SMBs) or enterprises.
- Location: Global and/or regional.
- Products/Services: Complementary or supplementary to your product or service, such as CRM, ERP, or accounting software.
- Scope: Refer, resell, consulting, implementation, integration, training, or support for your product or service.
- Customers: Similar or adjacent to your target market, such as SMBs or enterprises in various industries or verticals.
- Partners: Existing or potential partners who can refer, resell, or co-sell your product or service, such as software vendors, distributors, or agencies.
- Reviews: Positive or neutral reviews, ratings, or testimonials from their customers or partners.
- Awards: Recognized or awarded by reputable organizations or publications.
Having an IPP can help you:
- Identify and target the partners who can complement your product or service, add value to your customers, and align with your vision and values.
- Tailor your pitches, partner portal, and joint go-to-market plans to the specific needs and preferences of your ideal partners.
- Motivate and enable your partners to perform and succeed by providing them with clear benefits, incentives, requirements, and expectations.
- Measure and improve the effectiveness and efficiency of your partner program by tracking the key metrics and indicators of your partner performance and satisfaction.
- Avoid wasting time, money, and resources on partners who are not a good fit for your product or service, or who are not reliable, trustworthy, or committed.
Seek partners whose values align with your brand’s ethos. Consider their reach, expertise, and customer base. A classic example is the Apple-IBM partnership where Apple leveraged IBM’s enterprise prowess, enhancing its presence in the corporate sector while IBM gained a foothold in the consumer market
Program Design: Structuring for Success
The third factor to analyze is the Program Design. You need to design and structure your partner program in a way that is attractive, rewarding, and easy for your partners to join and participate. You also need to define and communicate the benefits, incentives, requirements, and expectations of your partner program, as well as the roles, responsibilities, and resources of your partners and yourself.
By analyzing the program design, you can create a partner program that is clear, consistent, and compelling for your partners, and that can motivate and enable them to perform and succeed. You can also avoid confusion, frustration, or conflict with your partners, and ensure that your partner program is aligned with your objectives and goals.
One way to analyze the program design is to create a partner program framework, which is a document that outlines the key elements and components of your partner program, such as:
- Benefits: The value proposition and advantages of your partner program, such as increased revenue, market share, customer satisfaction, or brand awareness.
- Incentives: The rewards and recognition of your partner program, such as commissions, discounts, bonuses, referrals, or co-marketing opportunities.
- Requirements: The qualifications and criteria of your partner program, such as industry, size, location, products, services, customers, partners, reviews, awards, or funding.
- Expectations: The goals and targets of your partner program, such as sales volume, revenue, customer retention, or customer satisfaction.
- Activities: The activities of your partners and yourself, such as referral, reseller, or co-seller, co-marketing, etc.
- Responsibilities: The obligations and duties of your partners and yourself, such as lead generation, lead qualification, lead nurturing, sales closing, or customer support.
- Resources: The tools and support of your partner program, such as training, certification, documentation, marketing materials, or technical assistance.
By doing this, you can design and structure your partner program in a way that is appealing, rewarding, and easy for your partners to join and participate.
Airbnb’s ‘Superhost’ program incentivizes hosts to provide exceptional service, thereby fostering a robust community and driving customer satisfaction.
Objectives and Goals: Setting Clear Milestones
You need to set and measure the desired outcomes and results of your partner program, both for your partners and yourself. You also need to align and track the progress and performance of your partner program, as well as the feedback and satisfaction of your partners and customers.
By analyzing the objectives and goals, you can ensure that your partner program is effective and efficient, and that it can deliver the value and benefits that you and your partners expect. You can also identify and address the challenges and issues that may arise in your partner program, and improve and optimize your partner program over time.
One way to analyze the objectives and goals is to create a dashboard that displays and monitors the key metrics and indicators of your partner program.
Monitoring partnership is crucial for assessing effectiveness and ensuring alignment with organizational objectives. The indicators to be monitored depend on the type of partnership (strategic, technology, resale, etc.) and must be aligned with the respective strategies.
The four key metrics I always monitor are:
- Partner Contribution Percentage: Revenue share generated from partnership program compared to total, to assess their overall impact.
- ARPU: The Average Revenue per User from partnership program compared with the other revenue channels.
- Customer Lifetime Value (CLTV): I assess the CLTV of clients acquired through partnerships to understand the long-term value they bring to the business.
- Partner Performance Scorecards: I developed partner performance scorecards to track the effectiveness of each partner, the activities (such as the number of leads generated, marketing activities, and the frequency of collaboration) and identify areas for improvement.
By doing this, you can set and measure the desired outcomes and results of your partner program, and align and track the progress and performance of your partner program.
Google’s Partner Program sets attainable milestones for agencies, encouraging them to achieve certifications, thereby enhancing service quality.
Budget and Resources: Allocating Wisely
By analyzing the budget and resources, you can ensure that your partner program is affordable and sustainable, and that it can generate a positive return on investment (ROI). You can also avoid overspending or underspending on your partner program, and balance the quality and quantity of your partner.
Allocate resources judiciously. Consider investments in training, technology, co-marketing, events, and support systems.
Salesforce’s Trailblazer Partner Program invests heavily in partner enablement, providing resources and tools for skill development and customer success.
One way to analyze the budget and resources is to create a partner program budget and forecast, which is a document that projects the income and expenses of your partner program, as well as the expected growth and profitability (you can also use Excel or Google Sheets).
It includes the following items:
- Income: The revenue generated by your partner program, such as commissions, fees, or subscriptions from your partners and customers
- Expenses: The costs incurred by your partner program, such as incentives, training, support, marketing, or administration for your partners and customers
- Growth: The increase or decrease in your partner program performance, such as number of partners, number of customers, revenue, or profit
- ROI: The ratio of net profit to total investment, or the percentage of return on your partner program
By doing this, you can estimate and allocate the amount of money and time that you need to invest and spend on your partner program, and optimize and manage the return and efficiency of your partner program.
Measurable Success: Tracking and Adjusting
Implement metrics to measure success and periodically assess the program’s efficacy.
You and your partner should agree on the specific, measurable, achievable, relevant, and time-bound (SMART) goals and indicators that will guide your partnership’s activities and outcomes. These goals and indicators should align with your respective missions, values, and strategies, and reflect the added value of your partnership. You should also establish a baseline and a target for each indicator, and decide how often and by whom they will be collected, analyzed, and reported.
HubSpot’s partner program analyzes partner performance based on customer satisfaction, revenue generation, and adherence to best practices.
Setting measurable program OKR’s and KPI’s, and making sure they are accessible and attainable are also important to maintaining transparency and accountability.
Conclusion
By analyzing these factors, you can create a successful partner program that can help you grow your business and achieve your goals.
I hope you found this blog post helpful and informative. If you have any questions or comments, please feel free to contact me.
Remember that although these factors provide a roadmap, each partnership is unique. For optimal results, you must tailor your approach and focus on building trust to meet the specific needs of your company, your Partner, and the market context.