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4 big SaaS partnership mistakes – and how to avoid them

Partnerships can be a great way to grow your business but if not nurtured correctly (or picked well in the first place) they can cause major headaches.

These difficulties can occur with any of the three main B2B SaaS partnership types:

  • Resellers or distributors
  • Technology and product partners
  • Solution and implementation partners

While 82% of B2B leaders plan to add to their roster of partners this year, there’s been a trend to move away from resellers/distributors. So for this blog, we’re going to focus on both technology/product partners, and solution/implementation partners.

To help you avoid the pitfalls we’ve identified four big mistakes that businesses can make when it comes to partnerships. And outlined some top tips on how to avoid them.

Let’s dive in.

Mistake 1: Expecting them to do all the work

Some businesses believe that signing a partnership contract is the end of the journey. In reality, it’s only the midway point.

Finding and striking the right partnership takes a lot of work (in fact, we wrote a whole eBook about it which you can check out here). But with the deal in place, a whole new type of work begins. 

That’s because you still need your partner to actually sell your solution. Businesses often fail at this point because they underestimate the extent of this work and because they don’t consider what’s in it for their partner. It’s therefore no surprise that 73% of marketers consider managing partners a major challenge

Say you’re expanding into a new geography and you’re working with an implementation partner that builds consultation services around your product. What does the partner gain? There are undoubtedly other solutions they can use and choosing yours requires them to work harder as it’s unknown in the new market. 

If you want your new product to be successful, you’re going to have to do a lot of legwork up front to help surface the value of the partnership – it will pay off in the long run. 

“I was working for a company that had a product that was performing really well in Europe. When we struck a US partnership, we assumed we could just continue that success. Big mistake. A new market needs to be treated like a new start. Why should our partner suddenly be excited about our product? In the end, we did the majority of the work, and brought them a customer deal that was practically finished. It took a year but it was a really worthwhile investment.”

 Gustav Lagercrantz

Mistake 2: Undercooking your code

If your business has a software product, you need to prepare that product for partnership before you strike a deal. 

A surprising amount of businesses fall at this hurdle because they do not do the vital groundwork needed to make their product robust. Have you ironed out the glitches? Is your product ready for integration? If you haven’t covered these bases, you’re setting yourself up for failure. 

Whether you’re working with an implementation or a product partner, they will want to integrate your product into their portfolio or build consultation services around it. 

If they are overloaded with technical problems or errors as soon as they try to do that, it will strain the relationship, cause a drop in their customer experience, and likely lead to that partner looking at alternative software products.  

Take time to ensure your product is as ready for the partnership as your business team are.

Mistake 3: Overcooking the contract

The first 90 days of a partnership are critical to its success. If managed correctly, this can be the most interesting and exciting stage. 

The issue is, some business partners spend this period locking in a lengthy contract agreement process. The mistake the businesses make here is having a contract that’s overly punitive or only beneficial to their side. 

Partnerships are all about relationships. If the 90 day period is spent fighting over how the relationship will be managed, it will drain momentum and damage the connection between the two parties. 

Due diligence is a must and it’s vital to square away how you’ll handle incoming leads and what happens to customers should you decide to end the partnership. But the watchword here needs to be ‘balance’. 

Ask yourself how the contract benefits both partners and if you would sign the deal if you were on the other side of the table. 

Mistake 4: Thinking a kickback is a dealmaker

As we’ve mentioned at length in this blog, you need to ask what’s in it for your partner. The mistake that some business partners make is answering that question with ‘we will give them a kickback’. 

Kickbacks are essential as they create a vital reward structure for working together. But this can’t be the main reason for the partnership. A good partnership improves both company’s core business. In fact, 84% of companies say partner ecosystems are important to their strategy, but getting the balance right between both organisations is important. 

That means you need to put yourself in the shoes of the other business. How will partnering with you help them? Will the combination of customer bases and products make you both more successful? 

If the answers to these questions are unclear, this might not be the right partnership for you or it might be time to reevaluate your approach. 

Remember, partnerships need to be founded on mutual benefit, not just a kickback.

Key takeaways

  • THE PARTNER DEAL IS NOT THE DESTINATION – There’s a lot of legwork to be done after the deal to ensure your partner actually sells your product. 
  • BAD CODE MAKES BAD PARTNERSHIPS – If you have a software product, make sure it won’t cause headaches when your partners try to use it.  
  • CONTRACTS CAN KILL MOMENTUM –  Get a robust and balanced contract together that isn’t overly punitive. 
  • LOOK BEYOND THE KICKBACK – A good partnership improves both company’s core business. A kickback can’t do that.

We’re Monterro, an investment firm (of the get-your-hands-dirty with strategy and operational support variety) that helps Nordic software companies hit their biggest partnership goals. 

If you want to dig into the nitty gritty of how to find the right partnership and how to maintain it once you found it, check our B2B SaaS guide to growing your business through partnerships. It’s a 12 minute read you really don’t want to miss.