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The Partner Channel Podcast | Season 2, Episode 27

How to Win During an Economic Downturn

Show Synopsis

Our Wednesday episode this week is a whirlwind of good advice. Sit down with our host, Tori Barlow, and her guest Tai Rattigan, Global Head of Partnerships at Deel and Co-Founder of Partnership Leaders. The two talk about what they’re seeing take shape in partnerships with the current economic climate and what to be mindful of as a partnerships professional right now.

Highlights:

  • What the primary focus for partnership orgs should be during an economic downturn

  • How important communication with executives is when managing a partner program

  • What role data plays in the overall success of a partner program

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The Script

Tori Barlow: Welcome to the Partner Channel podcast, the voice of the Channel. I’m Tori Barlow, VP of Marketing at Allbound. Excited to be here with Tai Rattigan, Global Head of Partnerships at Deal and co founder of Partnership Leaders. Welcome, Tai. I’m super excited for our chat today.

Tai Rattigan: Thank you, Tori. Happy to be here.

Tori Barlow: Yeah. You were the first partnerships person at Optimizely and Amplitude and helped build out both of those teams, and now you’re at deal. So you’ve had a pretty impressive path you’ve paved for the partnerships industry and curious what are you up to right now at Deel.

Tai Rattigan: Yeah so Deel is super exciting because I’ve spent the last decade of my life in the kind of analytics space doing partnerships, and so working in Deel where we’re really focused on global employment is a completely different industry for me. But something I got fairly passionate about while working remote during the pandemic. Seeing the acceleration in that space and also seeing kind of the the impact it had on people’s personal lives to be able to work remote and be more flexible about where they work. I had a kid during the pandemic and being able to spend more time with my family working at home, it’s like really a game changer. And so I got quite excited about what Deel we’re doing. I think selfishly as a partner professional, we have the opportunity to build a kind of once in a lifetime partner program and marketplace. And so that I go t really excited about We have a good amount of customers. We have a very large number of people that are employed through deal and the opportunity to provide all of the benefits and perks and tools and products through our partners that help those remote employees get set up for success. So you can imagine if you’re employed via deal a company and you know you’re going to need a laptop and a we work membership and you know, maybe you’re going to stay in an Airbnb when you’re traveling and you know you’re going to rent a car. And like all of these other things, you know, like 401K health insurance. Like you name it, these workers need those to be set up for success in this environment and on the partnerships team at Deel, we kind of have an opportunity to build that. And interface with all of those companies in the market. And so it feels like a really unique opportunity to build something really special, and that’s what I’m working on at the moment.

Tori Barlow: That’s so exciting. You did so much, it sounds like, during the pandemic and had a kid. And also with everything you guys are doing at Partnership Leaders, I think we’re seeing this industry really take wind, which is a lot of what you and and the folks over there are doing. And today bouncing off of the pandemic, we’re talking a little bit about what channel leaders should do during an economic downturn. And I think there’s a lot of buzz right now. Lately, earlier this year, there’s a ton of reports. But, you know, it’s an interesting time to be a leader or a contributor to a SaaS company and even more interesting for partnerships. So what are you seeing take shape right now?

Tai Rattigan: Yeah, yeah. And I was fortunate enough in between working at Deel and working at Amplitude. I worked at an awesome VC firm called GGV Capital for a little while and kind of got to see the how how the machine works on the inside, working with some amazing investors. And so I have like a little bit of a unique perspective on this. I guess I’m not unique, but like nuanced. I’m reminded of this great book by Ben Horowitz called The Hard Thing About Hard Things, and he talks about peace time and war time CEOs as a concept. And, you know, this is a where we’re transitioning into a kind of a war time environment for like especially in the private markets. But like we’ve already been there in the public markets for six months or so. I think it’s a phase of operating that most companies are familiar with working in, except tech workers of our generation pretty much. Like, I don’t want to age you, but I’ll age myself by saying that I started my career in like 2008, so right around the Great Recession. And, you know, I started my career in finance and so I saw the impacts of that firsthand as my teams were getting laid off left, right and center. And I was kind of rotating around a bunch of different teams and just about surviving. And I think we’re seeing not something quite as dramatic right now, but, you know, like seeing some similar echoes of that in the tech market where there are awesome people. I could name a whole list of them who have been laid off recently from their companies. Great companies, great people. And just like having to kind of tighten the belts and be a bit more sharp about how they’re operating in this more tough environment for tech companies.

Tori Barlow: Yeah, no, that is really true. And yeah, the 2008 recession was definitely a whirlwind time. When you talk about tightening their belts a bit. Where do partnerships fall in place there? Can you speak to that?

Tai Rattigan: Yeah, so I think. You know, the reality is to partnerships is in a tough spot in general. And a big reason why we even started partnership leaders in the first place is the job is so hot. If you’re a VP of partnerships or a head of partnerships or maybe you’re the first partner manager at a company like you’re effectively having to justify your existence all the time. Like you’re the only go to market team that isn’t a no brainer. You know, like if you’re sales, marketing, customer success, a CEO of a company isn’t like, do we need a sales team? You know, it’s like it’s a no brainer. And with partnerships, like you’re always in a position, even in really good times, where people are questioning the impact that you have on the business and whether your team should even exist. Like all of those other teams basically are just company, customer, you know, it’s just a company customer, customer, company customer. And that’s like really simple. You use the least amount of brain calories, thinking about that relationship and dynamic. And if you work in partnerships, what you know is its customer and then ten other technologies, consultants, advisors like a bunch of thought leaders in the market and all of these other components that then have them decide which company they’re going to work with and enable them to be successful working with that company.

Tai Rattigan: But that is like extremely complex or is more complex and more abstract. People can’t be bothered to figure that out if they think that it’s easier to just be like a company customer, company customer. And so I think that that component of it makes partnerships hard.  And then I think the other part of it, is quite often people have ‘fluffy metrics’ in partnerships. And so like people aren’t 100% sure like what the thing is and how it works because it’s complicated. And then also you pair that with metrics that no one’s ever heard of before or like don’t necessarily roll up to the OKRs of the marketing leader or the product leader or the sales leader or whoever that team is reporting into. And you start to get into a tricky position where, if you’re the CFO of a company or on the executive team and you’re going through the list of all the different people in the company, and you’re trying to figure out how you can reduce costs. And you see a department where it’s not necessarily clear what the revenue contribution is, and it’s not necessarily clear like what the team’s even doing,

Tai Rattigan: that’s right for cuts.  And so I think partnerships teams are in a precarious position because of that. So this is a challenge and like we can think about surviving in this environment.  We want to be prepared for the CFO, CEO layoffs conversation, right? And get ahead of that and that would be surviving. Or we can think about, okay, well, this conversation is having happening at the board level first and like, how can we get ahead of that and how can we actually thrive in this environment? Because partnerships, teams at large for every team I’ve ever encountered generally has the highest conversion rates for the opportunities that they generate. They have the lowest KAC costs, you know, they have short deal cycles, much larger deals like any efficiency metrics you look at and like any measurement of the channel performance, it’s always the best, like by a mile, you know. And so like it’s a board and CFOs dream. So to see those kind of metrics, but they’re too busy talking about partner influence and you know, like fluffier stuff that no one wants to hear in this kind of environment.

Tori Barlow: Yeah, that was one of my questions is I’m sure folks listening now are thinking, well, are my metrics squishy? So it sounds like some fluffy metrics that you can probably rethink or influence or what are some other ones that are not so hard hitting?

Tai Rattigan: Yeah, yeah, I think so. One of the things that another thing that’s really hard about partnerships and the list could be very long. But another thing that’s really hard is like you have the ability to be able to help every team be better. You know, like on the partnerships team, the partnerships team could work with the marketing team and it’s like, okay, well if we do a joint webinar with Accenture or if we get this thought leader on this panel or all of these things like marketing is going to. Better. That’s like that would be amazing. And same thing on the product side. It’s like if we promote these integrations, it’s going to improve engagement and retention of our product. Net retention is a really important metric and you could just have those kind of shared KPIs with every team and that’s like really important to get that in place. But it’s so easy for people to then end up like servicing all of these other teams and like at the end of the day, sometimes you’ll run into a product team that’s like, yeah, like we have a partner focus strategy because these partners really impact our retention numbers and that’s what we care about. But most of the time, I mean, you’re a marketing leader I don’t want to speak for you, but most of the time it’s like, okay, 90% of our strategy is this. And maybe like 5 to 10% is like working with the partner team on that thing. And so if you’re like 5 to 10% of everyone else’s plans, it’s not like that impactful. So that’s like one thing where people get really caught up is like they end up with like a bunch of shared metrics and all of those metrics impacts like the okay odds that the company care about, but only like to a small extent.

Tori Barlow:  It’s almost like the trend and partnerships, you know, a couple of years ago was we have a partnerships team, whether they roll up under sales or marketing, whatever. Great. But now we’re kind of transitioning into the mindset of like, look, if you manage partnerships, you really have to have a dotted line to every department and really be full in on what every department’s plans are. Because to your point, if you have these sloppy metrics, you’re probably just swimming on your own island to talk about partner influence when the reality is we should be collaborating or a part of marketing, go to market plans from the entire company vision.

Tai Rattigan: Yeah, no, I completely agree with you because like partnerships on an island doesn’t work. But my strongly held opinion like is that like the partnerships team should always be focused on source revenue and like everything else the team does can be in service of that source revenue. Like yes, we should be sending referrals to our partners,  that’s really important. And either we’re going to capture a revenue share when we send referrals to our partners or like we’re going to expect those partners to send more revenue back to us, or we’re going to send referrals to the partners that send us the most revenue, you know. And so it’s all in service of net new source revenue. Likewise, you know, when we’re like any, any of the, any of the partner influence metrics that you can think about like effectively like they should be in service of sourced net new revenue for the business and like any but all of the other things can be health metrics, but they can’t be the focus. And so like partner attach rate, you know, partner influence like these kind of metrics that are like secondary to source revenue, which is really what everyone cares about. I’m not saying that I’m right, but that’s my strongly held belief.  Because the reality is that if someone looks at your numbers and they say, okay, this team is bringing in 15, 20, 30% of our new revenue every month and it’s 20 people.

Tai Rattigan: And, you know, like the sales and marketing and STR organizations, 100 people, they’re like, okay, great. Like math works out like let’s keep moving. You know, like it makes a bunch of sense where, where, if they’re like, oh, like. When we have a partner in a deal like the close rate goes from 20% to 30%. You know, it’s like that’s not the conversation that’s happening at the CEO level or the board level. Like those are those are nice metrics in peacetime, but not in wartime. So like I have a strong opinion on that and I really think that that is the opportunity to thrive in this market. I think most partner teams have a massive untapped opportunity to drive more revenue if they really orientate towards it and like companies need it, basically, like at the moment, every tech company needs to grow with less. And like I say, we have the most efficient channels, you know, like it’s just so much more performant on basically any, any metric that you could look at. And so this is this is the moment in time for partnerships teams if they really orient towards revenue and like really get comfortable with that, like get comfortable with being uncomfortable. I had a CFO at Amplitude called Hwang Hong Kong and I really distinctly remember this conversation because it was like the light bulb for me around this stuff because we had a like a partner influence number and we had a partner referred number and the partner influence number was really big.

Tai Rattigan: It was like 50% of deals or 60% of deals closed with a partner. And then it was like, what’s the partner referred number? And I and I had it as well, like because I was still passionate about that number and it was like 20%, 25% of new revenue, but it was like 25% of closed one revenue each quarter, but like 50% of all new revenue each quarter. , But of that new business, we were like 50% of it. And he and, you know, and he was like, that number is smaller than the influence number, but I care a lot more about it. You know, he was like, I would I would I would be happy with a small number that I really care about that we can increase over time. Then like a really big number that no one cares about, you know? I never talked about partner influence again after that conversation I was like, “Oh my God, you’re totally right.” Like, that number doesn’t matter to Yeah, it’s a health metric, but it’s not a business metric, right?

Tori Barlow: It’s a leading indicator and not totally controllable at the end of the day. But what are you close and to his point like what’s closing of that 50% and how do you analyze that to go do more of that versus the influence or we can just pull that all day. That’s exactly what marketers deal with, too. And the partnerships folks, 100%. So to wrap just really quickly, it sounds like in order to thrive during this quote unquote war time that we might be in from a partnerships perspective, it’s really looking at what are you reporting on, what are your metrics? And also are you aligning with the broader go to market teams and really assess what are your KPIs? Are they fluffy to your point, Ty, what is the definition of fluffy and maybe sit down with execs and other heads of departments to understand do these partner metrics align to the actual and revenue generating numbers of the organization?

Tai Rattigan: Yeah, what’s the number that’s in the board meeting? Like what’s the number that the CEO is reporting to the board?  is it IAR? Is it free cash flow? Is it net revenue retention? Like what’s that number? And then what’s the impact that your team’s going to have on that number directly, and really drive towards increasing that number? Because I can tell you right now, every team in partnerships that isn’t like laser focused on those numbers, if they get focused on those numbers, they’re going to drive an increase them. And it’s a lot easier for them to do that than pretty much any other team, you know, I mean, you work in marketing, so, you know, there’s like there’s there’s diminishing returns to almost every channel.  You can’t just like continue to spend dollars on Google ads forever, right? It’s the same for most channels, but like the, for any part of the team I’ve met pretty much, except like really big mature companies. No one’s anywhere near those diminishing returns right now. , Like they’re not even close. And so there’s just this massive amount of room for people to really orient towards revenue driving partners and getting more of them and doing all of the activities that do that.

Tai Rattigan: And like 90% of what people are working on right now, which is like all of the fluff and it’s like, oh, we need to enable the sales team so that they can work more with partners and do all that. And it’s like, yeah, that’s, that is really nice stuff. I tell you what, like if you get an opportunity from a partner and you give it to a sales person, they’re going to work with that partner on it. I guarantee you that like that sales is going to close that deal, you know, like because that’s their job and all they want to do is close deals. If you get ten opportunities to that salesperson, they’re going to be really good at closing with partners. And like you didn’t have to think about, oh, let’s like get some training with the sales team first and like all of that kind of stuff. And so there’s just so much of that fluff that happens where if you’re just oriented towards the activities that are driving revenue, it kind of takes care of all of the other stuff.

Tori Barlow: Yeah, this is this is great. And maybe even think about incentivizing your partner team or if it’s just you as the I see what is your comp plan look like? Readjust your plan to align with those goals because everyone’s going to work towards what they’re incentivized to work towards. So maybe take a look at that as well. If you’re readjusting your metrics, Tai, where can people go to find more information about partnership leaders?

Tai Rattigan: Yeah. So PartnershipLeaders.com is the best place to go. Check it out. If you’re not in the community already, I’d suggest joining. We do a lot of good panels and events and a lot of information sharing in there. If you are a company in the employment space or you’re providing tech, that helps remote employees have a better time. I would love to speak to you. We have hundreds of great marketplace partners at the moment, and we’re looking for more 3000 registered partners in our deal partner program and growing every day. So we’d love to talk to you and you can reach out to me, Tai Rattigan at Deel and we’ll get you set up.

Tori Barlow: Thank you. To our guest, Tai Global head of partnerships at Deal and co founder of Partnership Leaders. And thank you to you, the listeners for joining us here at the Partner Channel podcast. If you like what you heard, subscribe to our podcast episodes wherever you like to listen to podcasts.