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The Partner Channel Podcast | Season 2, Episode 12

How to Recruit Partners and Take Them to Market
with PXP Consult

Show Synopsis

For our Monday episode this week, Tori Barlow, VP of Marketing at Allbound, had the opportunity to chat with Martin Scholz, the Co-Founder of PXP Consult. Together they talk recruiting partners, and how to take them to market once they’re on board.

Highlights:

  • How to set clear goals for partners
  • The impact of expectations 
  • How to ensure partnerships are mutually beneficial

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The Script

Tori Barlow :  Welcome to the Partner Channel podcast, the voice of the Channel. I am Tori Barlow, VP of Marketing at Allbound. Excited to be here with Martin Scholz, co-founder of PXP Consult. Welcome, Martin. We’re very excited to have you.

Martin Scholz: Thank you so much. Glad to be here.

Tori Barlow : You have a wealth of knowledge that I would just like to call out. In the last 12 years, Martin built and scaled global partnership teams for three successful scale ups, developed the partner strategies and executed with the teams a broad set of programs across various partner types. You’ve been up to a lot lately, and this flows well into our really exciting topic today, which is writing the coattails of our most recent episodes, How to Build a Partner Program from Scratch. We’re taking it another step further and talking about how to go to market with your partner program strategy. And you have a really interesting concept of there’s really no blueprint for partnerships. When we ask, when channel folks ask, Hey, I’m building a partner program from scratch or I’m trying to recruit partners, how do you do it? There’s really no roadmap to it, which is what we’re going to talk about today. But before we dive in, and since you’ve had this broad experience helping companies build programs, what’s the most fascinating thing you’ve learned about partnerships?

Martin Scholz: Actually, in my opinion, the best thing about partnerships is they are diverse, so it never really gets boring. And you have to be interested in your partner’s success and growth to make it a long term success. So and since we do business with people in the end of the day, which are working for a company, it gives you also the opportunity to build relationships with amazing people and sometimes even across the whole globe.

Tori Barlow : Yeah. And I think it’s also what I’ve learned with partnerships is it’s not transactional, like it is a community. It’s a very small community when you think about it, if folks are on CSA or partnership leaders, you know it’s a small channel leader community and it’s an opportunity to build relationships with one another, but also with partners. So I’m sure that goes, miles for you, too.

Martin Scholz: Absolutely. And I totally hear you on that. People in the partnership business like to build relations. So I have hardly come across anybody who’s longer in partnerships, who’s not an amazing person and really enjoys working with them. That is really the fun about it. And as you said, I couldn’t say that more. It’s not transactional. Like in direct sales. It’s really finding a long term win win win situation. Typically the win win win because the partnership typically prospers when the end customer benefits as well.

Tori Barlow : Yeah, when partner leaders think about creating a partner program and then going to market with partners, that can sound really exciting. It could also be daunting, especially if you have an amount of looming KPIs over your head from your execs. So before our audience embarks on going to market with a partner program, where do you believe they should start?

Martin Scholz: This is a great question. Too often we witness that companies go like, Yeah, I think we should do something in partnerships. You know, my investor told me or my buddy who wants other company, but somehow people don’t really grasp it because they are diverse, right? So they have a little bit of a vague idea about what the partnership should actually do for the company. So there’s not a clear goal or a clear expectation connected to this. Hey, let’s do partnerships. I had one former member who was recently interviewed by a smaller startup, just around 40 people. So he had a chance to be hired as the first time guy in partnerships. He had three interviews; He spoke with the CEO, the CRO and the CPO. The good news, everybody was totally in there enthusiastic about launching partnerships. The not so good news was everybody told him a different story. And that is, real life, right? The very first step for us, when we talk to companies, is really to say, “Do we really have a clear understanding of the goal of the partnership initiatives? And how does this actually align to our company goals?” And when you sometimes see, oh, revenue, that’s not a specific, specific enough goal to be honest. So number one, make really sure that you have a clear goal which is fully aligned across the whole leadership because you just don’t need the zero you may need or you most likely need the marketing team you most likely will need sooner or later the product team. But don’t forget about the accounting team because if you have partner business, there will be accounting questions.

Martin Scholz: There will be questions. If that’s not the full buy in from the whole leadership team, you very often end up halfway through it and you can’t be efficient and achieve your goals. So make sure that you have a clear goal. Make sure that everybody has the same understanding. Because just because we both talk about partnerships, you may have a completely different idea of what we actually mean. So the affiliate is a reseller, so referral or MSPs, you know, there are so many names which are not absolutely clearly defined and are used differently by different companies. And if you have a clear goal, the second step is then to really set clear, measurable expectations about realistic targets. It should be some of the KPIs you mentioned. There are KPIs looming, but the usual sets, KPI, we just don’t work in most cases because you even as a channel, you can influence people, but you can’t control the sales cycle. So make sure that you have some other things. Also to measure the development of the partnership team and make sure that they know about timelines and make sure that they are aware of the resources you will require. Again, maybe marketing resources, most likely marketing resources, maybe success resources. So this is really where you make sure that you have a clear understanding of the goal, make sure that you have clear expectations and really not try to just run. Because I’ve seen too many times that partnerships teams were stopped when they just gained momentum because the revenue wasn’t there again, because it’s a lagging indicator.

Tori Barlow : Yeah, I think it’s really important you call out getting buy in from everyone, everyone telling different stories. And that one example you provided, if our audience, for example, is applying for a new role as a channel leader or they’re being recruited to come start a channel program at a new company, should these questions be talked about during the interview process? How do you kind of get ahead of some of this before you’re actually in and you kind of say, “Whoa, there’s not really alignment here.”

Martin Scholz: I guess if you are hired as a channel leader, it’s probably because there is no program yet. So it would be surprising and a positive surprise if they could answer all your questions already in the interview process. What I would try to get an idea about is, hey, just the sea level. A line on the topic. Do you have as a channel leader the chance to get face time with these folks? Because my best guess would be that sooner or later you should have a brainstorming meeting with all the decision makers in a room or on a virtual room, but really make sure that that they all talk about the same. My indicator would be do you talk only to the CRO, let’s say to the revenue officer or do we have a chance to also chat to the marketing and the CPO and and test? Are they ready for this? Are they aware of this? Or is that, let’s say, a silent initiative from the revenue organization who want to open up a new revenue stream for for their business?

Tori Barlow : I think a lot of people think about when they go to market, you know, let’s go to market, let’s bring in influenced revenue from partners. We’re going to track all these KPIs. But one of the foundational blocks, you know, channel leaders and execs need to be aligned on is partner types. So what is the correct partner type for my business? If someone asks me to build a partner program, what types of partners should I even start by looking at? How do you even know where to begin for thinking about partner types for your organization?

Martin Scholz: Another very solid question. I think it shows that you have been in Austria quite long as well. For me, the first point is that, you know, we talk about channel partnerships, but actually sometimes I’m talking to founders or C levels and say, “wait, wait, are you sure that channel partnership is actually what you want? Is it actually the right partner type for you?” What I mean by that is that you can apply partnerships depending on your company and probably any part of your customer journey from brand building over generation to really channel in a closer sense of referral or reselling. Sometimes it’s better to look at implementation partners first, which help you to in the post process process, which not necessarily in the first step generating more revenue, but secure that you don’t have to build up a big service department which as a SaaS company, you probably don’t want to run the service team, right? You want to make sure that you have SaaS revenue standard service revenues. There could be product partnerships which help your product development by not building a feature, which is maybe better to partner some other vendor. So what we like to do is before we jump directly into the revenue generating channel partnerships to really make sure that they have a deep thought about it. And if they didn’t decide, yeah, that’s fine, but we have that under control. We really want to go into channel. That’s fine. If you look at channel partners again, the approach will be significantly different depending on your own business. Which market are you in? What? What is your product look like? What is your ICP look like? How complex is the product? Is a premium primarily sales? Is it primarily sales that grows or product grows? Completely different approach, something which works amazing for people like, you know, a typical sales led growth product will not work for a product that growth approach.

Martin Scholz: A good idea is of course, always look at, okay, what is my go to market strategy in the direct sales? It should give you a good indication what you should do in your channel. So we had the classic example is that we say, okay, on bigger deals like mid-market enterprise targeted customers, we go direct. But on the S&P, on the small business size, our product. Well it does definitely deliver value is not expensive enough to justify a direct sales. It’s just not enough. So we absolutely look for channel partners to bring that product along with a bunch of other products to the end client. So we had a the different approach by customer segment. And it’s really like, okay, do we want to support your current go to market? Maybe there’s a chance to open up and expand your sales reach with partners into a segment, a geography, a vertical, where your direct sales has not been successful yet. We’re not even tried. Also going into national is so much less risky when you do it with partners instead of trying to build an own operations, especially if you jump from from Europe to America or vice versa.

Tori Barlow : PXP consult has a really interesting framework. It’s the four C’s you call it when creating a partner, go to market strategy. I think this is a big takeaway for our listeners. What are the four C’s?

Martin Scholz: Yeah. We thought about it when we in the different companies I work, we always try to find okay how, how’s our IP look like? And sometimes they are not easy scalable IP. But what always worked were the forces of general partner qualification and they are customer, credibility, capability and maybe most important, commitment. And this is probably a topic of its own. We learned that if you apply this methodology, you can easily qualify or better disqualify channel partner. We haven’t found any industry where it didn’t work.

Tori Barlow : Yeah, that’s great. And just out of curiosity, where can folks go to learn more about the framework?

Martin Scholz: For these, probably follow our posts on LinkedIn. We are currently literally posting about that and we also will try to make that more permanent because we really are very convinced that this is a very tangible method to become better and more successful, especially in the channel partner qualification.

Tori Barlow :  We definitely believe that it’s kind of similar when you’re doing direct marketing or direct selling, having an ICP or an ideal customer profile. Same similarities with an ideal partner profile. I think there’s a lot of preparation where folks think, Oh, I have to garner a lot of partners, and then that’s how I’m going to create indirect revenue and pipeline. And the reality is you should start out being a little more stingy or strict with who you want to partner with, specifically around partner types and really understand their business, their capacity and how it could help your business and vice versa. I know you have a lot of experience around that as well. A huge believer in that.

Martin Scholz: Yeah. I mean, you mentioned that. Allbound had provided amazing content about how to get started and you mentioned the IPP. I definitely have a strong believer of the ideal partner profile. I guess that everybody is kind of aware today when they are in this field. What we realize is that one crucial questions people still miss, even if they do follow these guidelines. And this is, we mentioned it earlier, partnerships is not transactional, right? It’s not transactional like indirect sales, money against product or service. It’s a long term mutual relationship. So we always ask our people like, how does or what does your partner experience look like? We all know the customer experience. That’s a big thing, right? That’s trained everybody in the last five, ten years. But we haven’t seen that people are actively think about their partner experience. And this is not just understanding your IPP, it’s also goes beyond this added value. You think your partnership hopefully creates and provides to the end client. This is really about the whole experience. You could also say, what do we as a company do to become an IPP for our IPP? Again, it’s mutual. So. It’s great that we want to partner with that particular type of companies, but are they interested in partnering with us? Just because it’s important for us doesn’t mean it’s important for them. And to give you a life example; in one of the companies I worked for when I joined, I looked at their standard reseller contract for digital marketing agencies. It was around 50 pages for a product, which was the side product for them.

Martin Scholz: It was not mission critical for them. I said, like, guys, how do we believe that somebody sits down and read through 50 pages for a partnership contract, which is not a totally game changer for the whole business. It’s not at the core of their own business. And I said I wouldn’t have read it. And when I went back to the legal team, they went I was prepared to fight for it. But think about it. You are you are generally interested in partnering with that software vendor, and then you get like a 50 pages contract. This is a this is a bummer, right? You don’t want to do that. So think about partner recruiting, partner onboarding, partner enablement and partner success. Too many people think, Oh, that’s a partner I would like to partner with. They talk to them. They bring them a partner contract which has typically no obligations in there. So it’s easy to get that signed, but easier than probably direct sales. But then papers, patients, even if you do an easy thing, it just sits somewhere and people never activate the partnership itself. And this is really where you say, put yourself in your partner’s shoes and make sure that the experience they have is amazing. And this will also dramatically impact the commitment of the partner, which again is for me the most important component of a successful partnership. Do they want to become and be and stay your partner?

Tori Barlow : I think that’s really important. It’s really interesting you say that a lot of folks care about customer experience, giving a good customer handoff. But what’s really important for partnerships is partner experience. And it goes back to you saying the transactional idea, it’s not transactional, it’s partners are experiencing a poor relationship with you. It’s time to look inwards and and really understand how you can help them to help you. One of the last pieces of your blueprint strategy is talking about setting expectations. I think this is a big one and can be intimidating when you’re building a partner program or you’re coming in as a new channel leader to an existing program, kind of having to rehaul things. How do folks and how should they think about expected outcomes of a partner program? And then how should they set expectations with executives?

Martin Scholz: Yeah. That’s, I would say, the Holy Grail. Again, depending where you join this company, in which stage, if there’s a problem, it’s probably harder if you have the chance of it to be the one who creates it. Oddly, you had a chance to get the goals cleared and the expectations aligned when before actually creating the program with the leadership team. That’s what we discussed earlier. Sit down and make sure that there is alignment. It’s getting really hard. If you join the company and you’re handed over a program program and you realize, well, the expectations are not clear. And every month I have to argue with my leaders or my peers about certain stuff which wasn’t clarified. I had this situation where the VP sales asked me, Hey, Martin, we need more leads, we need more partner leads. I was like, What do you actually mean? Do you mean leads or do you mean opportunities? Partner influence opportunities. But I don’t know. I need more. I said, okay, how many more do you need? I don’t know. Ten. It’s like, how do we get to ten? Well, that was the CEO said, look, he made up a random number. And this is when it gets hard because you need to kind of work against some, I don’t know, tradition or missing stuff. So, again, if you have a chance. Build it right from the start. If you didn’t have a chance to come into a program if you like, there is not a clear alignment within the company. I would try as quickly as possible to get this alignment and make that really urgent priority for my leadership team

Martin Scholz: with the argument guys, if you don’t align on the goals, how can you measure if I’m successful? And for myself, I’d say, look, if I can’t agree on the goals, I’ll be probably fired in six months because they feel like I didn’t do my job just because their expectations are totally off or not aligned. And as my mom says, not like disappointing us is our expectations. So really make sure that these expectations are solid. And then you also have a conversation on this development and you’re not getting called up after six months and asked where the revenue is. But you can say, look, I told you, we need three months to build a program. Within three months we will have won the first two partners who will then need maybe one or one and a half months to be onboarded. Then they have their own set cycles, so don’t expect the first income from the channel, you know, before six months are on. And this expectation setting is this internal expectation setting is something I believe is an absolute critical factor. There’s one more thing. One thing I found out was my team members who were and that repeated in all three companies. Funnily enough, they were hesitant to ask the partner for their expectation. Because we are only a partnership people. We are a great relationship builder. We don’t want to come across like this cheesy sales guy, this hot selling guy who’s asking what’s a quarter? Right. You try to be nice and whatsoever.

Martin Scholz: And then I said, you need to do that. And then I went ahead and asked and asked them. And my team members were sometimes shocked, like, because nobody ever was shocked about my question. The partner always had a good answer because they are a business as well. Guess what? They have their own business plan. They have their own budget. They have to have their own forecasts. What they will do with this partnership to make it sure that they get the buy in from their leadership team. If you have a QBR with a partner and he can’t answer this question and it’s not just because you just start, then you probably should help him to develop an expectation together with him. But if it’s like a partner moves with you a bit longer and they don’t have a plan or they don’t have expectations, for me, that’s a red flag. That means that the partner didn’t think about this partnership, which means he doesn’t probably as committed to that partnership as we are. And I would really consider if that’s if I can change that. No, maybe I didn’t do a good job in onboarding him and enabling him. And if that’s and that’s the other dangerous thing, if you did your job well, but he’s still not thinking about it, then he’s probably not the best partner to spend your time on because they probably have other priorities, which is fine because they run their business, you own your business, and in their business there are other priorities. There’s only so much you can do.

Tori Barlow : This piece of going to market with partners is huge and probably the first thing channel leaders should do. Thank you to our guest, Martin Co, founder of PSP Console. And thank you to you, the listeners for joining us here at the Partner Channel Podcast. If you like what we heard, subscribe to our podcast episodes wherever you like to listen to podcasts.