An Interview with Daniel Graff-Radford for Website Planet. When talking about PRMs, Allbound is one of the first names that come up and with reason. We talked with Daniel Graff-Radford, CEO of Allbound, to know more about the platform, understand the company’s...
A Channel Partner Program Can Transform Your Company
Channel partner programs can exponentially aid growth within a SaaS business. For proof of this, look no further than some powerhouses like Microsoft and Hubspot. When Hubspot first launched its partner program in 2014, it generated 33% of its revenue and made up 42% of its customers, all within the first quarter. Microsoft has always been a partner-led operation, with 95% of its business generated through its partners. But that doesn’t mean that it’s a perfect fit for your company; some companies aren’t ready for a PRM, while a few simply don’t need PRM at this point in their partner program maturity.
There are several factors to consider when deciding whether a channel program is right for your business. Some of the criteria are:
- Stage of your product. If your product is in the early stages of development, feedback from customers is vital. Having partners as middle-man blocks critical feedback. Make sure you are past the stage of needing a majority of feedback directly from customers before recruiting partners.
- Revenue needs. Although channel programs yield long term results, they require time and money upfront. Determine where your money is most needed at this moment to decide if it’s the right time to build your channel.
- Knowledge of sales process. Keep in mind that there will be a training period for your partners. To adequately equip them with the skills to sell your product, you must be an expert in your sales process. You’ll have to educate them on the length of the sales cycle, buying triggers, and buyer personas.
- Target market. Channel partners are especially useful when it comes to large target markets. It’s more cost-effective to leverage partners with a large number of potential customers versus a smaller account-based strategy.
- Expansion strategy. If you plan to expand across the country or internationally, channel partners are essential. You’ll save time and money by not needing to build out remote offices to penetrate new markets.
The following are ways in which channel partner programs can benefit your business:
Lowering costs while increasing revenue.
The cost of customer acquisition is one of the most critical metrics for a viable SaaS company. If your company’s revenue model is built on monthly recurring revenue (MRR), success is measured by keeping the lifetime value (LTV) of your customer higher than the cost of customer acquisition (CAC). Keeping CAC low is critical to scaling your business. Selling through channels is the number one way to reduce CAC.
Building a channel program enables you to leverage the skills and resources of partners. Channel partners are established companies that market to your target audience. Their sales reps have pre-existing relationships with customers. Leveraging relationships significantly reduces marketing and sales costs.
Your channel leaders manage several partners at once, which allows for scalability. By having the right processes and tools in place, you can onboard, train, and support your partners efficiently. This process is significantly less involved than hiring and managing a team of your own sales reps.
Expanding into new markets, whether by vertical or geography, can be challenging. By onboarding channel partners that already have the lay of the land in those markets, you gain instant access. A channel can save you from building satellite offices and investing in local marketing.
When sales cycles are complex, involving several stakeholders, cost efficiency becomes vital. By having long, complicated sales cycles occur outside of your organization, you save resources. You’ll be able to dedicate the time and effort saved toward more significant opportunities.
Ensure client success.
Your channel partners can also serve as a client success channel. Software has an inevitable learning curve, which is why support is critical. You want your product to have “staying power” within your customer base. That’s why many entrepreneurs try to crack the code of how to make their product a “habit.” The key to making sure your software is used to its fullest potential lies in upkeep and support. This required support led to the explosion of the Customer Success role in the SaaS industry.
Software companies realize that customer retention is the lifeblood of revenue generation. In most cases, it’s cheaper to keep a customer than gain a new one. Onboarding, training, renewing, and upselling ensure continued business. Each one of these functions is so important that they’ve become separate job functions.
Relying on channel partners to provide client success increases efficiency. You can motivate partners to provide elevated customer support with your incentive program. Measure partner performance by client success metrics to ensure these goals are met.
Building brand awareness.
Hiring more sales reps is not always a solution for increasing revenue. Growing your sales and marketing teams is challenging to scale and cuts into margins. That’s where channel partners can help you grow.
Partnering with known brands, also known as “co-marketing,” is a great way to expand reach. Slack does a great job of this with its partner ecosystem. They use their partner program as an asset to customers by providing integrations with over 1,000 SaaS products as tools and resources. Partnering with Google and Salesforce helps Slack build trust with their customers.
Developing a channel program can transform your business in many ways. Channel partners can lower costs, keep customers, and build brand awareness. Once you’ve determined that a channel partner program is right for your business, grow it intentionally. Proper support and management of your channel program will determine your results.