I think channel distribution is one of the most promising and untapped acquisition channels for SaaS — especially for SMB SaaS startups.
Tom Tunguz, Venture Capitalist at Redpoint
Today, small and medium SaaS businesses are discovering the power of using partners to help sell their products. With a $60 billion market in which to grow, these companies recognize that smart use of partnership channels can help them scale up while creating a win-win-win ecosystem for the company, the partner, and the customer.
If the promise of partnerships appeals to you, then I’ve got good news. This guide is all about answering the burning questions you might have about launching a partner program (or optimizing an existing one) for your SaaS business.
Based on our experiences launching the Unbounce Partner Program, I’ll walk you through the SaaS partner program journey. (I’ll even talk a little about how landing pages can help you launch and support your program quickly.)
Here are the questions we’ll need to tackle before you begin:
- What is a partner program?
- Why should I build a partner program for my SaaS business?
- How do I know if a partner program is right for my SaaS business?
- How do I create the right foundation for my partner program?
- What are the next steps once I’m ready?
Read on to learn more, or click one of the links above to skip ahead to a question.
So, what’s a SaaS partner program, anyway?
In its purest form, a partner program acts as a way to reward people for delivering new business opportunities or value.
In the short term, this usually includes generating new trial starts, MQLs, and SQLs. (Already pretty valuable, right?). Over the long term, it can also deliver increased revenue, higher customer lifetime value (LTV), and reduced customer acquisition costs (CAC).
Depending on your business model and stage of growth, a partner program will likely take on different forms. You’ll need to decide which one is right for you and expand accordingly. They typically include:
Referral Programs
Existing customers make lightweight referrals to people in their network. In exchange, both parties get a small reward when the new customer joins. Most of us have been invited to make this kind of referral to our friends and family. Just think about how companies like Airbnb, Uber, or Dropbox offer you a little something for shouting them out.
Affiliate Programs
Affiliate programs are often designed for content creators and influencers. Unique links are tracked with cookies and strategically placed in content that targets audiences in the consideration phase of the buying journey. Affiliates usually receive some kind of compensation (more on this below) for their work.
Bench, for instance, has a simple yet effective affiliate program that allows partners to receive a commission (and look good to their audience) by offering a unique discount.
Reseller Programs
These are often built with agencies, consultants, and managed-service-providers (MSPs) in mind. These partners resell your product and benefit from offering ongoing services, usually on a retainer basis. As a SaaS company, however, you’ll need to educate your reseller partners about how to create a new revenue stream that is supported by your app—the margin on reselling alone likely isn’t worth it for them.
For example, ActiveCampaign’s reseller program offers beefier discounts to partners as they grow, letting them set their own pricing and pocket the difference:
How do you decide which types of partner programs are right for you?
There’s clearly a lot to consider. To keep things simple, let’s distinguish these forms by four key points: complexity, the usual type of partner, annual contract value (ACV), and internal ownership. Keep in mind these are approximations, not absolutes. Your mileage may vary.
To make these distinctions more clear, ask yourself, “who owns the selling and customer success functions, you or your partner?” The heavier a partner’s responsibilities, the more complex your program will need to be to support and reward them.
Why build a partner program for my SaaS business?
According to Amplifinity, partner programs account for 23% of total SaaS revenues, see an average of 350% ROI, and retain customers 37% higher than non-partner channels. That’s huge! Many SaaS companies already know about this potential: Crossbeam reports that 69.8% of them have a channel partner program in place.
Aside from the tantalizing business-related outcomes I just mentioned, though, a well-built partner program offers seven significant benefits:
1. Expanded Reach
Partners let you connect with customers you alone could never access. They often have developed personal relationships with a degree of instant trust that’s hard to replicate from afar.
2. Effective Scaling
Once the program is established and your engagement “flywheel” is in place, you can scale your program effectively as you bring on more of the right partners. This generates recurring revenue.
3. Reduced Cost
Your partners act as an outsourced sales and marketing team. They’re also usually paid on a performance basis, which means they’re a variable cost for your company.
4. More Trials Ending in Conversion
Partners generally have a higher trial-to-paid conversion rate than direct channels. If you see a lot of trialers drop off, this can make a big difference on your bottom line.
5. New Market Entry
A partner program can offer a low-cost way to expand into new markets. Working with established partners in existing markets, you don’t need new offices, hires, or associated marketing and sales spends.
6. Increased Product Focus
Partners reduce the need to insource so much labor around marketing, sales, and customer success. They allow you to focus on the reason people come to SaaS in the first place: the product.
7. Performance Attribution
Many SaaS companies struggle to understand the ROI of their marketing channels. But the performance-based nature of a partner program means that measuring acquisition and revenue influence is relatively straightforward.
How do I know if a partner program is right for my SaaS business?
So far, so good, right?
But now that we have a rough idea of what a partner program is and what it might look like, you’ll need to ask a few crucial questions before going ahead. A partner program is a big commitment after all, and it’s not right for every SaaS on the block.
To greenlight, make sure you can answer all of the following questions with a resounding “yes!” (Exclamation point and all.)
Treat it like a checklist:
- First, have you achieved some level of product-market fit? Partners need to trust that you have a stable and reliable product if they’re going to invest in you.
- Is your sales process simple and streamlined? If your reps are having a hard time selling your product in the first place, it’s unlikely partners will do any better.
- Is your leadership team aligned and bought-in to using external partners to market and sell your product? Leadership must understand the risk and upside involved in having others represent your brand.
- Will your leadership team prioritize and scope the program across the organization? Not only do they need to buy in, partner programs demand a full commitment from above to be effective. They require a lot of cross-functional work, prioritization, and ongoing support in order to succeed.
- Are you okay with waiting 12 months+ to start seeing real results? It can take a while to recruit the right partners and onboard them effectively to start producing results. If you need a quick fix, look elsewhere.
So, let me be straight with you…
If the answer is “no” (or, possibly worse, a big fat “maybe”) to any of these questions, you run the risk of failure and frustration. It’s better to continue building your business case and table it for later. Don’t let a half-formed, unsupported partner program be the hill your career dies on.
How do I create the right foundation for my partner program?
If you’ve made it this far—and you’ve got all the “yeses” you need—it’s time to start thinking about how you’re going to set your program up for success.
It’s about to get real. Here are some key things to think about:
Segmentation
Which types of partners are best suited to market and sell your SaaS product?
At the top of the funnel, you might want content creators who have a large audience and speak directly to your target market (in the discovery phase). Or, you might want to partner with agencies that have existing clients and want to make your product part of their service offering.
Either way, you’ll need to define your segments and think deeply about how you will set them up to succeed.
For instance, Drift identified the partner segments that make the most sense for their conversational marketing tools: integration partners, certified partners, and influencers. Each one has a different value prop, recruiting and onboarding flows, and engagement efforts to remain relevant to each partner type. It’s brilliant.
We loved calling out these partner segments so much, we did something similar at Unbounce. We even added a Driftbot to add a conversational approach to recruiting our partners.
Program Benefits
What do your partners want to get out of your relationship? If you don’t know, you risk creating incentives that don’t work. For this reason, at Unbounce, we poll each partner during their onboarding.
Below are the goals they tell us matter most, in order of importance:
- Grow my business with a new managed service
- Co-marketing/lead generation opportunities
- Align my brand with a marketing leader
- Earn recurring revenue/passive income
- Solve client’s problems
Notice that earning revenue is actually near the bottom of this list. (We were surprised too!) While compensation can be important, you should consider (and do the legwork necessary to know) what other benefits might be more meaningful to your partners.
Typeform, for instance, understands their agency partners’ desire to receive quality leads. They’ve created a directory that allows customers to search for partners by location, industry served, language, and type of marketing service offered. (Having spoken with several hundred agencies, I’ve learned that having a shot at retaining a new client far outweighs any commission.)
Understanding key SaaS metrics like CAC, free trial-to-paid conversion rates, and LTV is also vital to shaping your comp structure. Some SaaS companies feel strongly enough about their swag to reward lightweight referrals, some pay per qualified lead, and others give partners a percentage of recurring revenue. It can depend on your partners, your customers, and your unit economics. (So do your homework!)
Editor’s note. If you’re interested in seeing a strong example of how you can make a case for agency partnerships, take a look at Ty’s post about adding landing page services to agency offering.
Go-To-Market Plan
What will you tell potential partners about your program? What channels will you use to connect with them? How will you convert them? Don’t underestimate the scope of a proper go-to-market plan for your partner program. There will be many stakeholders involved, and a ton of content and assets need to be created for each segment.
An essential part of the Unbounce GTM plan is our conversion path, which includes landing pages. In fact, landing pages are where the rubber hits the road in your partner recruitment and their marketing to the customer. We were able to quickly create three separate pages for our segments: one for marketers, one for agencies, and one for influencers.
Each page came at the idea of partnering with us a little differently, based on what we’d learned in our research. Influencers use the program as a way of engaging their community and showing their expertise, for instance, while agency partners create new revenue streams by recommending a conversion tool they already trust to their clients.
Landing pages, segmented emails, the right software platform (more on that below), and smart use of our existing marketing channels all helped us get our partner program up and running quickly. As a result, we added over 4,000 partners in 2019, who now contribute an average of 15-20% of all our new trial starts (that’s a lot).
Finding the Right Platform Partner
How will you communicate with partners, track their activity, and reward them? Investing in Partner Relationship Management (PRM) will streamline your program under one roof and take care of the more tedious functions like analytics, tracking, and payouts.
I’ve already talked about how smart it is to identify different partner types promoting you throughout the customer journey. To meet the needs of each of these segments, you’ll need a platform partner who can manage them with a single solution.
In trying to find a PRM solution for Unbounce, it was frankly hard to find a provider with a focus on SMB SaaS. Most PRMs either leaned too far in favor of enterprise software on one end (reseller) or B2C consumer products on the other (affiliate).
In the end, we found a fit with PartnerStack, which meets our needs and understands the subscription-based business model. Check them out.
Have we piqued your interest in becoming an Unbounce partner? Even if you’re not ready to launch your own SaaS partner program today, you can always become a part of ours. Get all the details about how you can join the Unbounce Partner Program.
Okay, I’ve got my foundation. What’s next?
Alright, your partner program is open for business. Congrats! Pop the cork on that champagne you’ve been saving, but don’t get too cozy. You’ve reached the end of the beginning—but there’s always more to do.
In terms of growing your program, there are two priorities I’d recommend you focus on:
Attracting and Recruiting the Right Partners
This is all about the inbound and outbound marketing tactics you’ll use to grow your program with more of your ideal partner segments.
Your baseline KPI here will be the number of partners by type that you bring on board. You can then look at the performance by type and evolve your program to deliver more value to each segment. Some activities might include:
- Customer recruitment. Existing customers can be a qualified source of referrals. Think of the touchpoints where you can bring them into your program: during the onboarding process, on login screens, in-app messaging, during customer success calls, on invoices, etc.
- Marketplace recruitment. Potential partners discover programs like yours through a variety of marketplaces. Unbounce has found the PartnerStack marketplace particularly useful. Start there.
- Forum recruitment. Content creators, bloggers, and traditional affiliates spend time learning from one another and staying in the know on various forums. We’ve just begun exploring STM Forum, and I’ll be happy to report our experience in the future.
- Prospect recruitment. Your database likely has people who might not necessarily be a fit for your product but would make excellent partners. (Think blog subscribers, previous trialers, etc.) The majority of Unbounce Partners are not our customers.
Activating and Engaging the Right Partners
You’ve got the partners. Now it’s time to onboard them properly into the program and make sure they’re set up to succeed.
You’ll want to start tracking activation rates (% of people who hit a minimum level of performance) and referral rates (the average number of referrals/leads/sales each one makes). The goal should be to focus on the activities that increase these two numbers.
Some activities might include:
- Automated onboarding. Most PRMs will help you create custom onboarding tracks to help each of your segments get the hang of your program in a way that makes sense for their business. Getting them started right is crucial.
- Partner success kit. Build a kit that equips your partners to take action as soon as possible, including partner logos, competitor comparisons, sales enablement material, content suggestions, etc.
- Regular newsletter. Create a pillar piece of content that keeps your partners in the loop about your product and program. You can also profile your top performers and share their methods of success so that others can emulate them.
- Periodic Challenges. Regular rewards are great, but providing additional performance-based incentives can help boost numbers. The right campaign can attract new, highly motivated partners to jump on board.
Using a Partner Coach
One thing I’ve been saying, again and again, is that monetary rewards often aren’t enough. Keeping your partners engaged with your program usually means connecting with them on a personable, human level—so make your team available when they have questions or want to chat about strategy. At Unbounce, we use dedicated partner “coaches” (like Anca Bujor, who wrote the newsletter above) to assist with recruitment and help all our partners find success.
Done right, a partner program can help grow your SaaS business…
Just because you built it, doesn’t mean they will come. There’s a lot of homework, buy-in, planning, and ongoing execution required to give you a shot at success. But when it works, a partner program can be a growth accelerant.
As we’ve discussed, make sure you’ve:
- Painted a picture of the “why” and the opportunity
- Gone through the “yes” checklist (and, you know, said “yes” to all of them)
- Laid a solid foundation before you launch
Then, don’t forget to keep working on recruitment, activation, and engagement.
Some final advice: “Good artists copy, great artists steal.” (Hey, sometimes the clichés are spot on.) Join some SaaS partner programs of companies you admire. Take note of the entire journey from the time you hit their recruitment landing page through onboarding.
What’s relevant to your business? What’s not? What could you do better? Finally, interview your peers on what’s working well for them, what’s tricky, and get advice on what they’d do differently. There’s gold in learning from those who have gone before you.
I wish you much partner success in 2020. Please feel free to post questions here or connect with me on LinkedIn and discuss anything partnerships.
from Unbounce https://ift.tt/3fxtb8D
No comments:
Post a Comment