Or, why a little karma can go a long way.
Life is all about making choices. And often the choices we make will decide if we succeed or fail.
One choice that clients often ask about is how to staff and scale their partner organizations. This is often after we have decided it is time to start dedicating resources to partnerships. I encourage them to think of the partner organization structure as an evolving matrix.
The typical SaaS company often decides to build a dedicated partner team once they have enough traction (or distraction!) from inbound partner inquiries, and once partners have shown potential to help the company accelerate achieving their goals.
When it comes to channel partnerships (referral, reseller, VAR, MSP, etc.), in many cases the first hire is a transfer from the Sales department charged with achieving revenue goals. A good choice, since they can mentor the partners in how to position the solution, qualify, and close prospects. These initial resources will typically be responsible for the full lifecycle of their partners (from recruiting to ramping and then managing them). This can be a challenge, and we'll talk about that below.
This model works when the initial resource has capacity. But two things need to be taken into consideration as momentum builds:
What happens when we start to work with more partners? This is the capacity problem. If you have the right profile of person in place already, then one choice is to hire another resource to play a similar role.
What happens when you start working with different types of partners? This can lead to a potential competency problem. Managing a strategic relationship (often with a much larger and perhaps global partner) requires a very different set of skills than your typical channel partnership. Here's where it makes sense to start splitting roles according to partnership type and hiring for experience.
Given the high-touch nature of partnerships, how you scale out your team as the partnerships grow can mean the difference between success and failure.
When do we add resources?
To address the Capacity issue, when a partner manager (and I use this term generically) has too many partners on his or her plate, you need to think about their optimal capacity (how many partners can they realistically recruit, ramp, and manage per year?) and the expected revenues from those partners (this will help you fund the role). Once you know the right profile for your partner manager candidates, then hire a second one and segment. Repeat.
When it comes to managing different types of partnerships, this is where you will want to assess the revenue potential of those other partners and make a similar decision. But here you want to start to specialize by bringing on partner managers with experience (competencies) working with these types of partners (navigating strategic relationships, for example, can be very different from managing MSPs).
As the different partner segments grow, you will reach a point where this model of using end-to-end partner managers will become inefficient. This is where the evolving matrix comes into play.
The rise of the partner success manager
I often work with clients when they are at a point where the number of partners is growing but they don't know how to scale effectively. This is where we take a look at the different types of partners and the partner lifecycle(s).
Let's face it. Not everyone is good at everything (although we like to think we are). Great closers often hate to prospect, for example. As managers and coaches, we need to identify team members' strengths and weaknesses and focus them on their highest impact. In fast-growth organizations, this gives you the opportunity to specialize.
If we go back to the simple partner lifecycle above, as most SaaS companies scale and become more familiar with working with partners, the bulk of the co-selling activity starts to take place directly with the Sales team (who are often incented to work with ramped partners). This reduces the tactical burden on the partner managers. When it comes to specialization, the first place that companies typically focus on is hiring dedicated resources to recruit and close partners. When relieved of this task, partner managers can then focus on making their partners successful by ramping them properly and managing the relationships.
This focus on partner success is critical. It takes into account the unique and potentially symbiotic nature of the relationship between a SaaS company and its partners. A lot of care has to be taken to create a value proposition for those partners, and this must be backed up with assigned resources dedicated to their success. In a survey* of approximately 100 Microsoft andGoogle partners, over 85% ranked the availability of dedicated partner resources as either "Extremely" or "Very Important" when it came to evaluating potential partnerships.
Putting in place Partner Success Managers sends the signal to your partners that you are investing in their success.
By having Partner Success Managers who are focused on ramping new partners and then managing those relationships, you move towards a more efficient organization, letting closers, or "hunters" (both Partner Managers who focus on recruiting new partners and the Sales team who is working with partners on joint opportunities) close while "farmers" focus on nurturing and managing the relationships.
Use the matrix to plan out how your partner organization will scale. It helps you visualize where you can achieve efficiency through specialization, and when you need to add more resources.
Wait, what about the karma? Well, investments in your partners' success will reward you handsomely. An early example of this in the U.S. software industry was Great Plains. They over-invested in providing educational and support resources to their network of over 10,000 accounting partners, and grew channel revenues (and loyalty) exponentially, resulting in their sale to Microsoft for over $1B in 2000.
* "Partnering in the Cloud" - The Cloud Technology Alliance, 2015