Why have a partner ecosystem to complement GTM efforts?
Published on June 25th, 2024, written by The Partner Guru Team
One of the most important principles, regardless of any organization’s size or footprint, is generating more revenue. There are many ways to achieve this, with partnerships being one of the roads that any software manufacturer can take. So why should you choose this over other paths, when budgets and the capacity to execute are always finite? Let’s dig in:
Expand your sales reach to untapped markets with reduced effort
Landing a new customer is hard. Really hard. Any marketing expert will always talk about the hardships of cost of acquisition, or what the Customer Lifetime Value represents to your organization. But the benefits of a partner program can make it so that you’re introduced to an existing customer base that’s much easier to reach. We’re sure the companies that your future partners work with, are more eager to talk to you than someone reaching out via a cold message on LinkedIn. These partners are companies that have worked with said customers, have established trust, and are composed of a portfolio of solutions that hopefully your software will complement. Think of what that represents versus an additional headcount, and what it takes to enable that person to bring in new customers. Let’s call partnerships what they are: one hell of a shortcut.
And with a partner, you now have an ally in what is an objective for both: bringing in new customers. So that represents more resources for marketing, an extended salesforce that can reach more prospects, and a company that cares about your product. The software providers that have built a great partner ecosystem reap the benefits of creating a dynamic playing field where many strive toward a common objective. How impactful can partnerships be? Just ask Microsoft, where a whopping 95% of their 212 billion dollars in revenue come from their partners.
Do not deal with fluctuating currencies and other factors
Latin America. Europe. Canada. APAC. It’s time for you to conquer the world. But the world is a vibrant marketplace, full of opportunities, currencies and traditions that can leave you in the dust if you’re not careful. When in rome as The Office taught us, is not just a saying. If you want to take your business abroad, remember that big companies aren’t going to pay with a credit card. They’re their own organizations, with procedures, vendor vetting processes and timelines for payments that may not be aligned with your practices.
Except your partners probably already covered all of that. They’re already selling to these customers. They can utilize financial incentives and differing payment terms that our customers’ prefer.
One factor that always comes up in international partnerships are currencies. Believe us, you don’t want to deal with a currency that one day is a dollar and the next is 0.8 of it’s value. You have to take into account the withholding taxes of each country, the way to move money from one place to another, and in general, if you’re thinking of setting up shop in each country, do you not quiver in fear thinking of all the administrative overhead? But with a good partner program, all of that goes away. They can deal with the nuance of each territory, the complexities of operating abroad, while you focus on the important stuff: your product.
Implementation (without the risk)
When you have a product that is the predominant market leader or has a huge demand, you can get away with a product that gives low margins to the partner network, hoping volume makes up for profit. And if your partner can make money off of your product through support, education, professional services or other revenue streams, maybe they’re willing to withstand this situation. But if your product is emerging, trying to gain market share and doesn’t represent much additional revenue to a partner, the only way to get the partners’ attention is to make sure you make it worth their while. If you’re starting, and are giving them 5%, you can bet (at most) you’ll get 5% of their attention.
With a good partner program, abundance and better business opportunities are afoot. One of the most important factors you should be thinking of is for your customers to have a good implementation of your product. The times of shelfware are coming to an end, as the world assumes a SaaS operating mode where things are very simple: if your software isn’t being used, you’ll lose a customer very soon. You want your customers to use your software right. You want them to engrain them to their business processes, making it a part of their critical operation. And you want it to be running smoothly, for them to be satisfied so they can be a reference for other prospective customers.
Partners are a great way to achieve these objectives. The majority of resellers include professional and support services, whose objective is very simple: getting the most out of your software for the customers’ behalf. With great implementation partners, not only will you reduce the overhead associated with support (because they’d be your first line of defense) but you’ll have customers using your software to the best of its ability, practically guaranteeing that you’ll be a part of their business for a long time. There isn’t a better recipe for recurring revenue than a satisfied customer.
Here at PartnerGuru, we have the know-how to help create and grow a partner program from scratch or resuscitate one that’s on the anemic side of things. Hit us up if you need help!