The world has gone SaaSsy! Are you channel-ready?
The XaaS, PaaS, IaaS, SaaS, and all other SaaSsy permutations are growing at exponential rates. Nearly half of all SaaS companies reported that up to a quarter of their SaaS revenues flow from the channel. For some SaaS vendors, the channel is a sustainable and scalable revenue source. But if you’re like many SaaS vendors, you might be asking, “How do I ensure a successful SaaS channel?”
There are three foundational components to consider when building your channel playbook – Partner Types, Partner Business Proposition, and Executive Buy-in.
In the SaaS Channel Playbook blog, we will look at these 3 components and review common channel mistakes to avoid as you evolve your SaaS channel strategy.
1. Identify your Partner Type
Today, there are over ten types of partners for SaaS companies. The success of your strategy can hinge on the partner type that best aligns with your goals and has the collaboration culture needed to ensure SaaS customer adoption and success.
Profile your partner type: The reality is there are now multiple partner types transacting or selling software that B2B companies must consider. The standard partner types prevail – VAR, VAD, SI, MSP, ISV, etc. What is differentiating partners today is how they build practices and sub-specialties that complement vendor solutions. Profiling your partners gives you information that will support decisions around recruitment and enablement for your partner ecosystem.
If you are just starting to build your SaaS channel strategy, you may want to narrow your focus to the two or three partner types that best fit your market development needs and goals. How to profile your partners goes far beyond the vertical industry. You need to understand – how many SaaS vendors they are working with; are they delivering professional services; do they have specializations; and importantly, how do they manage the post-sale customer journey.
Build flexible programs: A SaaS company must architect a flexible and comprehensive program with engagement and enablement based on the specific partner type, the roles within partner companies, and engagement mapping into the direct salesforce. Field engagement will identify program elements that will benefit from flexing the program to partner type/specialty.
2. Partner Business Proposition
Your Partner Business Proposition is a foundational part of any partnering strategy. Many people mistakenly think that the Partner Business proposition is a “statement” or tagline. It is so much more than that.
Customer Value Proposition vs. Partner Business Proposition: The “Value Proposition” answers the question: “Why should I/my company purchase your offer/solution?” Whereas the Partner Business Proposition answers the question: “Why should I/my company invest time and resources taking your products/solutions to market?” These are fundamentally different questions. Your partner is not your customer. If you take your customer value proposition messaging and replace customer with Partner, it misses the mark. Keep in mind that without a solid Value Proposition, you cannot build a solid business proposition. The business proposition is manifest in all the ways you engage and enable your partners. All the systems and tools, requirements, and investments that you provide are part and parcel of your business proposition to partners. Your partner wants to know that you are investing in their success. Messaging and communications are also a big part of the business proposition so spend time creating customized partner-centric messaging.
Present case studies: When working with partners, consider sharing a few case studies on your high-value partners. Create clear and actionable playbooks that show the anatomy of a deal including top-line margin opportunity, implementation services, and education services. Partners lean into and care about these details. Show prospective partners it’s not just about a software transaction; it’s also about attaching services that will ensure customer success.
Services enablement: Services are key to driving expansion to end customers. Ask yourself, what am I doing to help my partner optimize and amplify their services business? The post-sale customer journey is potentially more important than the purchase journey in the SaaS world. Here is where we recommend enabling your partners on the customer success goals you want them to attain – think adoption, expansion, and renewal. Provide consulting, implementation, and educational services, teach your professional services methodology to ensure consistency in the customer experience.
3. Executive Buy-in
Finally, building and evolving a channel ecosystem is not simply a sales initiative; it’s an all-hands, company-wide, foundational go-to-market principle that requires full executive support. Having at least one executive sponsor is critical as you gain executive buy-in. Be prepared with the following:
Metrics that matter: Keep in mind that channel adoption can take up to 12-18 months to generate recurring TCV revenue. Many executives and channel teams are unaware of this and often become impatient, thinking their strategy failed and give up too early. A well-planned program infrastructure can shorten the channel ramp to revenue. Set reasonable expectations and goals. Model historical data to illustrate upside and present to your executive team early and regularly. Track both leading and lagging indicators – revenue is the lagging indicator while leading indicators such as deal registration, partner-led, services attached, etc. are the front-end indicators of early success. Align your metrics with corporate OKRs.
Executive-level partner advocacy: The technology channel has been in constant growth and transformation for the last few decades. The commercial channel today is very different from its older generations. Bringing together all the company channel executives as a sponsorship body will go a long way to keeping top executives current with channel trends and performance norms. Transparent and detailed communication with executives is critical to building executive buy-in and support. Including partner performance, dashboards in regular executive business reviews will provide the executive team with a concise view of the programs you’re activating with the partner ecosystem along with the results of those programs.
Why Do Partner Programs Fail?
Even if you successfully identify your partner types, support a strong Partner Business Proposition, and achieve full executive buy-in, your channel program may still falter. Watch out for these common mistakes when building your strategy:
Aligned and Underpinned Strategy: Just as the channel has changed over time, so has the channel management skillset evolved. Many companies may take the “just do the same things we’ve been doing” approach when implementing their channel strategy and its component programs. While this may keep the lights on, you will not realize true channel growth without a clear strategy and implementation plan in place. For a partner program to be successful, the channel strategy must be defined from the start and fully aligned to corporate goals.
Insufficient Training: Invest in keeping your channel acumen up to date through ongoing training. For all channel team members, prioritize proper channel training such as AchieveUnite’s Channel Acceleration Bootcamp, designed to help professionals build and deliver an effective channel strategy.
Indirect and Direct Conflict: “Channel conflict” is always present. Partners compete with each other, but they should not have friction with your teams. Include your direct sales team in conversations around strategy, messaging, and metrics. Clearly define and agree upon rules of engagement for all customer and partner-facing roles early on.
By avoiding these common mistakes and building a strong channel foundation through Partner Type, Partner Business Proposition, and Executive Buy-in, you can create a successful channel that expands your software reach and opens up new revenue streams for your company.
As we continue with this SaaS Channel Playbook series, we’ll dive deeper into channel ecosystems and explore how to successfully implement MDF and the ways to turn your team into channel superstars.
A huge thank you to industry experts, Angus Robertson, Chief Marketing Officer of Chief Outsiders; Steve Stewart, Head of Channel for SmartSheet; and Jason Bystrak, VP Cloud, D&H, who we sat down with to discuss industry-wide best practices for creating a successful channel strategy and three common mistakes to avoid as a SaaS company. Click here to view the full LinkedIn Live Video Recording.
