In foundation of every successful #partnerships is a scenario when your partners have 💎 skin in the game.
This boils down to alignment and commitment.
🙌 Alignment in channel partnerships may come from 3 sources:
✔️ Adding your product would help your partner to sell their own product
✔️ Re-selling your product would result in meaningful revenue for your partner
✔️ Selling your product will personally benefit the partner manager or/and a salesperson who will be selling your product.
🚀 One of the best drivers in partnerships is to show to your partner how adding your product to their roster will pull their own products through the #channel. This bundle should of course benefit your joint customers - and that’s a coveted 3X Win.
Given that typically partnerships take time to ramp up, and the revenue share is not sky high, relying on commission only as a driver requires a very strong business case.
Sometimes though, companies have a sales force on standby in addition to the access to customers that you’re trying to reach, but they haven’t had new products to offer these customers for ages. Finding these 😍 "hungry partners" is a holy grail of channel partnerships, and it absolutely worth exploring if such a niche exists in your space.
💰 Finally, to create alignment, adding your product should benefit your internal champion (a partner manager) as well as a person who will be actually selling your product.
Your partner’s sales people should have at least the same level of incentives to sell your products vs selling their own products. Otherwise their focus will be elsewhere.
An advice here is to structure a partner incentive agreement in a way that partner’s sales people in the front line would directly benefit from selling your product. For example, you’d pay 20% commission to your partner, but make sure that 5% (a big chunk of it) will go directly into the comp of the salesperson who is making sales.
We’ll talk about commitment in the next post.
💬 In the meantime, here is a great advice on the topic from one of our fireside chats at Partner Insight:
100% of the time, you need to find a champion on the other side of the table. You need to find someone who thinks:
1. this is really good for my company,
2. and it's going to make me look good.
9 times out of 10, the more senior the better. But senior and lazy or young and hungry again, the same thing applies.
The senior guy is doing pretty well, makes good money. There is a problem with seniority - the urge to not f*ck up #growth.
At the end of the day, these people aren't buying new things, new risky things. Why risk? The risk appetite decreases over time.
If you're doing something that's brand new, but somewhat risky, I would find a more junior person in the organization who's willing to take that risk. Again, high risk high return.