How to find, build, and sustain a great partnership for accelerated growth.
Partnerships can be a great way to grow your business but if you think they’re an easy option, think again.
There’s a common misconception that partners will just sell your products and your business will boom. But a successful partnership is a relationship… and it needs to go both ways.
First, your offerings need to complement each other and improve each others’ core business. The combination of your partner’s customer base and your product should also make you more successful.
And partnerships bring value in the long-term so if you’re after a quick win, you should look elsewhere.
What makes a successful partnership? A solid relationship, crystal clear expectation setting, and an equitable approach.
In this eBook, we explore the major do’s and don’ts of partnerships.
But before we dive in, let’s talk about the three key types of partnership:
Resellers or distributors work to sell your product or service to an end customer.
Technology and product partners offer you an integration with your product that makes it more competitive. Typically, there are different levels of partnership based on the type of integration and responsibility they assume.
Solution and implementation partners use your product as a base layer and build a consultancy service offering on top of it (rather than support your product as with a technology partner).
As the prevalence of simple “resellers” is diminishing, we will focus on the two latter types of partnership for this eBook.
This is a valuable 12-minute read but if you only have two minutes, you can jump to the key takeaways.
Advice is only as valuable as the giver, so let’s meet the brains behind this ebook’s insights:
— Regional Sales Director Nordics, Outpost24
Louise has extensive business partnership experience. At Outpost24 (which offers software for cyber security risk management), Louise is building a global network of both technology and solutions partners. For Louise, great partnerships are about culture fit, empowerment and autonomy.
— Founder and CEO, TimeXtender
16 years ago, Heine founded TimeXtender, with the mission to help companies lower the cost of data management. His passion for equitable and active partnerships is infectious, so it’s unsurprising that TimeXtender is sold purely through partners – making the strength of its partnership program, critical.
— CIO and Global Data Protection Officer, Optimizely
Peter is an experienced Chief Information Officer and Data Protection Officer, with a significant software industry experience. His background as a practicing attorney and management consultant has enabled him to hold many executive leadership roles, including General Counsel and Chief People Officer, as well as other leadership roles in sales and eco-system partnerships. His mission with partnerships? To leverage his deep skills in international law, business development, data protection and privacy, M&A, technical architecture and business operations to support, fortify, and accelerate the partnership process.
— CEO, Monterro
Gustav has over 20 years experience working in the software sector. We’re talking, founder and CEO of Netstar, COO and VP Sales of Episerver, and co-founder of Wiraya. But one thing has been consistent over the wide range of partnerships, partnership programs and commission models he’s forged – his belief that an equitable approach is key.
Partnerships can bring a wide range of benefits. Here we zoom into the three key reasons your business might want to strike one:
Working with a partner can be a great way to help you expand into a new market and ensure you have the expertise to make it a success.
Louise Burman“We worked with a partner who had an extensive customer base in Brazil. We didn’t have a footprint there so the partnership allowed us to take our product and successfully introduce it to their local market.”
If you want to expand into a new vertical or industry that you don’t have a presence in, finding a partner with in-depth knowledge about that vertical/industry can help you avoid costly mistakes and pitfalls.
Peter Yeung“A good partnership is often the best way to understand the vital nuances of a new vertical and/or approach to a yet-untouched addressable market”.
partner? Acquisitions can accelerate your company’s growth (see our eBook on just how great they can be).
But ill-founded acquisitions can get in the way of your goals and take resources from your core business. Say a business had in-depth knowledge of how to deliver consultation services around your product for a specific vertical. If you acquire them, you’re running that business too which could mean you have less time and resources for your core business focus: ensuring your software product remains competitive.
If you want to remain competitive against the frontrunners in your industry, your product (or product portfolio) needs to keep evolving.
For smaller companies who deliver a specific feature, a partnership can strengthen their offering by integrating it into a wider solution (they also benefit from access to a wider customer base).
Partnerships allow large and medium-sized businesses to add specific features their customers want, thereby improving their solution. Acquiring enough key features can unlock a competitive advantage.
Gustav Lagercrantz“Customers ultimately want a solution to a problem. The more comprehensively you can solve that problem and the more customer-centric your offering becomes, the more competitive you are.”
When deciding on who to partner with, prioritise the strength of the connection you have with the individuals you will be working with.
Once you have this, there are a series of key things to consider:
This is the most important consideration. A good partnership improves the core business of each company. With a technology partnership, the combination of the two businesses should make each of their products stronger by integrating it into a more comprehensive solution. For an implementation partner, one party gets access to a new market and the other gets access to a product they can build a consultancy service around.
Gustav Lagercrantz“At Episerver we had a great product and were experts at building software platforms, but we couldn’t build great e-commerce websites the way our partner could. Our partnership allowed us to develop one, which was a crucial part of the customer experience.”
How equitable is the approach of both sides?
If having complementary offers is the most important consideration, an equitable approach is a very close second.
It’s vital you put yourself in the shoes of the other business. How will partnering with us help them? How will the combination of customer bases and products make you both more successful? How invested are you? And remember, there should never be a fee to be a partner.
Heine Krog Iversen“Many companies say, ‘I want a partner to sell my product in their region and that’ll make everyone a lot of money’. But they forget to ask ‘why would all these partners want to do that?’. Giving a business a kickback isn’t enough, a partnership should strengthen their core business.”
Do they have a strong foothold in their market?
If your goal is expansion into a new geography or vertical, a good partnership should help you ‘act local’ within it. But if the potential partner is still learning to navigate that market, there are too many knowledge gaps to make the expansion successful.
Good partnerships deliver value in the long term, not a series of quick wins. Without internal backing for this slower realisation of value, your partnership is likely to fail. That makes getting the buy-in of key decision makers in your organisation (such as your CEO) crucial.
Once you have identified a great partnership opportunity, how can you get the partnership off to the best start?
Some businesses forget that partnerships are relationships. Spend time getting to know the people you’re working with so you can lay the foundations for a strong relationship. Meet your partners in person as much as you can early on. It will make the rest of the process both quicker and easier.
Having connected with the individuals, it’s vital that you also get to know their business goals. What’s their journey? Why are they seeking partnership? What are their targets and ambitions and how does your business fit into that picture?
If a partner is going to sell your product or represent your business, they need to really know what makes your offering unique. This is particularly important when working with an implementation partner who builds consultancy services around your offering. If you don’t ensure they’re comfortable selling your product, the partnership will struggle.
You need to hash out a clear go-to-market plan which details what needs to be accomplished in the first 30, 60, and 90 days of the partnership.
You need to also lay out:
Use all kinds of tools for your onboarding including pre recorded video onboarding, and live virtual sessions.
BUT make sure you also have face-to-face time. Partnerships are all about relationships so get in the room with the people you’re working with as much as possible.
Louise Burman“Both sides need to understand that the partnership will be a loss maker at first and plan accordingly. Businesses that think partnerships will create quick wins get a nasty shock in the first year.”
Let’s look at how you can keep your partnership on a good trajectory after you’ve got it started right:
To keep your partnership on track, you need to keep an eye on the KPIs and metrics you laid out in your initial plans. Quarterly business meetings are a great way to talk through progress and address any issues that occur. Make sure you also use that data to improve and streamline your partnership.
Pro tip: Don’t forget to set targets for customer retention. Many businesses set targets for new customers and sales but neglect retention.
This is a particularly costly mistake when working with a SaaS model where both customer lifetime value and retention rate are vital.
Having a dedicated partnership manager means your partners know who they can reach out to with questions or concerns. And trust that that person knows their business really well. They also need to know who they can escalate problems to outside of the partnership manager. This helps create a vital feedback loop, and creates a channel you can use to proactively highlight any changes occurring in the market/ industry (such as regulation changes, hacks, or data-breaches) or with your product, that will impact your customers.
As we have already stressed in this eBook, partnerships are all about relationships. So when you’re tracking performance and setting goals, ensure you’re doing so in a way that treats a partner like a true partner, and not a service provider.
Heine Krog Iversen“You need to track performance, but who wants to work with someone who checks up on them every 48 hours? Instead, be good (dare I say ‘fun’) to work with. Partnerships are about people. Your approach is a big part of being a competitive and attractive business partner.”
There are many ways to forge a partnership correctly, but there are even more ways to get them wrong. Below, we look at some of the lessons our contributors have learned the hard way.
Don’t expect them to do all the work
Simply dropping your product at the door of your new partner and expecting them to sell it, will not work. In fact, if you’re working with an implementation partner that builds consultation services around your product, you’re going to have to do a lot of legwork at first.
If you have a software product, how robust is your code? Whether you’re working with an implementation or a product partner, you need to trust that your solution isn’t going to run into all kinds of technical problems as soon as your partner tries to integrate it into their portfolio or build consultation services around it.
Gustav Lagercrantz“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.”
Having a robust contract is vital. It needs to cover essentials like how you’ll handle incoming leads and what happens to customers should you decide to end the partnership. But overly pernickety contracts can cause big problems.
Peter Yeung“The most important and exciting time in a partnership is the first 90 days. If that’s taken up with lawyers from either side having to fight over a contract, the momentum will go. Keep the essentials in the contract and be detailed but be careful it’s not obstructive and overly punitive. You absolutely want to agree in writing how the partnership is going to work, setting goals, outcomes and anticipated dates of successful milestones, but those specific details do not need to be in the contract itself – a mere reference to an agreed upon operating model would suffice”.
Kickbacks are essential because you need to have a reward structure. But it’s crucial that you don’t see a kickback as the main reason why a business would want to partner with you (or you with another business). Remember, a good partnership improves the core business of both companies – a kickback can’t do that.
And that’s it. Here are our key takeaways…
The best partnerships improve both companies’ core business.
Partnerships are a two way street, there has to be benefit and value for both partners. And it has to be bigger than a kickback.
Partnerships are about people. Get to know each other and each other’s goals. Then build a strong relationship by ensuring everyone is clear about the path, and knows who to call for support.
Use metrics and regular check-ins to keep your partnership on track but don’t treat your partner like a service provider. Be fun to work with.
Partnerships create value over time. Be prepared to do a lot of work in the opening stages and get internal buy-in for a long journey.
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 growth goals.
