Fitting Partnerships Into Your Business

There are vibrant dis­cus­sions about part­ner­ships. Excit­ing dis­cus­sions, in fact. Espe­cial­ly in the B2B SaaS com­mu­ni­ty, where the con­cept of col­lab­o­ra­tive work­ing has been iden­ti­fied as a new growth mod­el for companies.

As a com­mu­ni­ty, we try to fig­ure out ques­tions like:

• What actu­al­ly means partnerships?
• Where do they belong in the busi­ness model?
• Who is in charge, and where should it be placed in the org chart?
• How do we mea­sure its con­tri­bu­tion and outcomes?
• What type of part­ners are out there?

And prob­a­bly the most crit­i­cal ques­tion: How can you use Part­ner­ships suc­cess­ful­ly to grow your business?

While cre­at­ing a shared under­stand­ing, we often try to build new mod­els based on con­cepts we know and under­stand already. The most com­mon issue with that is that we try to press part­ner­ships into sales patterns.

This hap­pens on many lev­els like:

• Using sales KPI to mea­sure part­ner­ship success
• Stan­dard­iz­ing the acqui­si­tion process of part­ners like they were clients
• Using sales rep hir­ing pro­files for part­ner managers
• Mix­ing cus­tomer expe­ri­ence with part­ner experience

Let’s check two com­mon mis­un­der­stand­ings and quotes that are float­ing around and repeat­ed often. They sound right, but they are not.

Treat your part­ner like your customer! 🚫

That’s indeed not good advice and one rea­son why so many part­ner­ships fail (approx 80%). Treat­ing your part­ner like your cus­tomer makes you a sup­pli­er (not a part­ner). That cre­ates wrong expec­ta­tions on both sides, places your part­ner man­ag­er in a wrong posi­tion (set up for fail­ure), and ulti­mate­ly dam­ages the busi­ness relationship.

With­out a doubt, the expres­sion is made with good inten­tions and most like­ly means you should pro­vide an excel­lent expe­ri­ence for your part­ners; how­ev­er, with­out giv­ing con­crete advice on how to do that, it is misleading.

Impor­tant here:

• Great cus­tomer expe­ri­ence and part­ner expe­ri­ence are achieved with entire­ly dif­fer­ent methods.
• Part­ners, unlike cus­tomers, par­tic­i­pate in var­i­ous ways in your busi­ness mod­el, con­tribut­ing to func­tions like Chan­nel, Mar­ket­ing, Prod­uct, and Operations.
• ⚠️ A part­ner man­ag­er can expect and request more from a part­ner com­pared to what you can ask of a customer. *

* Book rec­om­men­da­tion: Mak­ing Chan­nel Sales Work, Author: Dave Davies, https://amzn.to/3tZlq8i, Chap­ter 2: Chan­nel Manager’s Rights “What lever­age are you giv­ing away because you don’t under­stand your rights.”

While the book focus­es on chan­nel part­ners, many of the rec­om­men­da­tions apply to most part­ner cat­e­gories and are use­ful for every part­ner manager

Treat your part­ner like a partner! ✅

When deal­ing with part­ners, remem­ber these principles:

• “The acqui­si­tion of new part­ners is not a sales process; it’s a recruit­ing process.”
• “You do not sell any­thing to a part­ner! You con­vince a part­ner to col­lab­o­rate and spend resources to achieve a joint goal.”
• “Spend the same time and effort to onboard a part­ner like you would do for an employee.”
• “Part­ner­ships = Col­lab­o­ra­tive Rela­tion­ships ≠ Trans­ac­tion­al Rela­tion­ships” (Guide: Under­stand­ing the dif­fer­ence between trans­ac­tion­al and col­lab­o­ra­tive rela­tion­ships.)
• “Dif­fer­ent part­ner types have dif­fer­ent part­ner journeys”

Rev­enue is the only rel­e­vant KPI to mea­sure Partnerships! 🚫

You will miss the par­ty if you engage in part­ner­ships and keep star­ring only on the rev­enue fig­ure. 🤷♂️

Not all part­ner­ships affect rev­enue. Chan­nel part­ners are the clos­est to influ­enc­ing rev­enue since they are your indi­rect sales chan­nel. How­ev­er, most part­ner­ships have a more direct impact on oth­er KPIs.

Part­ner Man­agers, com­pa­ra­ble to your devel­op­ers, con­tribute sig­nif­i­cant­ly to the busi­ness’s suc­cess. Both don’t sign con­tracts with direct clients, but their effec­tive work results in revenue.

Over­all rev­enue is not a reli­able nor a sus­tain­able indi­ca­tor of suc­cess if costs increase at an equal or faster rate. Today, investors look­ing much more at effi­cien­cy indi­ca­tors besides growth.

Part­ner­ships improve your cap­i­tal effi­cien­cy! ✅

Or like Charles Erwin Wil­son said: “More bang for the buck”

Part­ner­ships are a great tool to improve your cap­i­tal effi­cien­cy. With dif­fer­ent types of part­ners, you can direct­ly influ­ence your cus­tomer life­time val­ue (CLTV), cus­tomer acqui­si­tion costs (CAC), mar­ket speed, or risk mitigation.

If you want to learn more about how Part­ner­ships achieve cap­i­tal-effi­cient growth (CEG), check out the CEG play­book avail­able at https://partnerxperience.com/ceg/

Part­ner­ships in the B2B SaaS sec­tor are not just a trend but a piv­otal part of a suc­cess­ful busi­ness strat­e­gy. There are com­mon mis­con­cep­tions that need to be addressed. They require a dis­tinct approach and mind­set. A part­ner is not just anoth­er rev­enue source; they are col­lab­o­ra­tors in your busi­ness’s jour­ney. This involves a deep­er engage­ment and a dif­fer­ent set of expec­ta­tions and goals.

What are your thoughts and expe­ri­ences with part­ner­ships? How do you make part­ner­ships a part of your busi­ness model?