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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 Kelly Sarabyn Platform, ecosystem advocate at HubSpot and Asher Mathew, VP Go to market Data and Sales Intelligence Cloud at Demand Base and co founder at Partnership Leaders. I am out of breath from saying all of that. I’m pumped to chat with both of you. So welcome. Hey, thanks for having us. This is going to be great. We’re talking about a few major changes we’re noticing in the landscape. You guys have been such thought leaders from all different angle angles in the partnership sphere. So today what we’re going to dive into is the partnership landscape, especially since we’re heading into next year. But before we dive in, what are some major changes off the top of your head that you’re noticing specifically with partner programs?

Asher Matthew: Kelly, ladies first.

Kelly Sarabyn: Oh, thank you. You’re so polite. I think one of the things we just conducted this huge survey of over 650 partner professionals and executives, and that report is going to be available today so people can download it on HubSpot dot com. But one of the things we really saw is the evolution of partner programs, but also the struggle. So when people were asked, What’s your biggest challenge? What would you most like to see improvement on in your organization? They said implementing a scalable partner program with repeatable processes. So really 78% of organizations have partner programs. So even young startups are creating partner programs, but most of them are not allocating their resources programmatically. So it’s not a scalable partner program. It’s kind of loosey goosey. Maybe you have some tiers, but you’re still basically treating your partners in an ad hoc fashion. And we saw in this survey that one of the greatest indicators of driving more revenue from your partners is putting in place a programmatic partner program. And we see enterprise companies have done a better job of that. Almost half of enterprise companies are there already where they are programmatically putting their resources in place. But but everybody’s struggling, right? I think that everybody’s still trying to learn what is the best program design. And when we shifted away from the traditional channel, how do we change our programs to align with this new ecosystem business model?

Tori Barlow: I do want to take it a step back to Kelly. For those of us who are fairly new to partner programs or are looking to implement them like you’re talking about, can you describe what programmatic means in the sense.

Kelly Sarabyn: Yeah. So I think as you scale out, right, you can no longer have a super high touch with all your partners. If you have 1200 partners or 100,000 partners, it’s just not scalable. So you have to think through how do we allocate resources to all of our partners efficiently and effectively, but in a way that we don’t need an individual person to be making those decisions and making those calls? So what a common model that we’ll see is the program tiers, right? So if a partner gets to the premier tier or the gold tier or whatever the label around it is, they would automatically get certain benefits, right? And so you get XYZ co marketing resources, you get to co sell. And then if the program is actually executing on those parameters, then that means they are programmatically allocated instead of just saying we’ll just kind of play it by ear. Whichever partner is the squeaky wheel, you often see that happen, right? It’s not even necessarily the partner that’s going to drive the most value, but they’re the pushes, right? They went out on their own and made contacts with your eighties without even you being involved or your marketing team.

Kelly Sarabyn: Right. They’re just almost like cold out bounding the rest of your organization. And you see that a lot because the other, when it’s ad hoc, they’re just working with their partner manager and they’re saying, Hey, can I do more co marketing, Hey, can I do more co selling? And the partner manager doesn’t necessarily have that to offer. So it’s kind of chaotic and from like a scaled strategic perspective when you have that you aren’t getting the best allocation, right? You aren’t rewarding the best partners because there’s no framework or sense behind it where what you want to do is say, Hey, the partners who are filling these important key product gaps or these partners that are amazing at co selling with us, there’s a great alignment across our cultures, the way we work together. Let’s systematically reward those because they meet the criteria that we’ve defined at scale. But it’s challenging, right? There’s a lot of moving components. It requires internal alignment. It requires executive buy in. So I think that is a couple of components as to why organizations are really struggling with it.

Asher Matthew: Yeah. Let’s let’s look at it. This from the other side. Let’s look at it from the evolution of how this problem becomes a problem. Right. So basically what happens is somebody in the company says, let’s go to partnerships because they met with somebody else at a dinner party or an event or an analyst briefing, or they just went to CEO retreat. Right. And then they come back and say, let’s do this, because our boards and everybody else is saying, let’s do more with less and let’s go figure out how to increase go to market efficiency. Right. And then and then the CFO loves it and then a partner person gets hired, right? And then once a partner person gets hired, they because the company is testing if they actually can or cannot do partnerships, they go and invite everybody to come partner with them. Well, that happens when that happens, there are multiple types of partners that are brought into the system versus having a very like, let’s call it ideal partner profile way of going to market with partners. Right. And it’s interesting because all of us I mean, Tory, you’re a VP marketing, right? Like when you go target a market and actually for that matter is a marketer really by trade, right? folks that are in sales and marketing first figure out ICB before we do anything else. Right. But that doesn’t necessarily happen in partnerships all the time because partnerships as a function and as a discipline is so new for SAS folks, right? That the and so so all of a sudden you have five, six, seven different types of partners that are introduced into the company and and all the company’s trying to do is figure out can we partner or not? And actually if you look at the survey, I think the the survey basically said that on average a company has 3.6 different types of partners.

Asher Matthew: Right. And even before that question, when we ask the question, I think 70% of the executives that answered the survey said that partnerships was important to them. Right. Which means people are testing and then they get into this world where they have a bunch of partners, but they don’t have a way to serve them all. And so what Kelly is saying is the smart money basically says, let’s actually come up with a program so that we have some direction for these partners to go through a journey with us. And they are also hitting the same metrics that we’ve all internally agreed to. And the company can not only onboard them, enable them. And most importantly, this is where like a lot of partner programs mess up is pay them on time. Right? And I would say partner program fees that are paid out are probably even below in priority than collections, which is already below and priority than everything else that a company has to has to work on. So hopefully that gives some context of like why this problem becomes a problem and why smart founders or smart executives think about programmatically working with partners because that allows for scale and they’re looking for scale in every other part of the business anyways.

Tori Barlow: I think you both are making really good points. One thing that I keep hearing in the industry, I’m curious if the survey touches on this or your point of views is getting by. And so after the example you just gave, it sounds like you kind of hit all of the execs for, Hey, this partnership stuff sounds really good. Is how are people struggling with exec buy in? Is that even happening and how do they get over that?

Asher Matthew: Yeah, so the way at least I’ve seen or I’ve coached some other folks and a lot of our members and partners of leaders actually have this question to write is the it’s always super interesting to figure out where did the partnership’s idea come from? If the CEO brought it up, it’s probably because he either heard it from the board and analysts told him or he was at a CEO dinner or something like that, that this happened. Right. So then rather than going for buy in from everybody, all the other C-suite, right, the partner leaders job is to go and figure out why is the CEO saying this? Does he or she understand it? And that just requires some time that they spend with them right now, if the CFO says it right, it’s probably because sales strategy or somebody else basically brought this thing up. Rarely do you see like a customer success team bring this up. So most probably you’re going to come from CEO or the CFO. And my advice to folks says, before you go for widespread buy in, just first, make sure that the person who is actually championing this, if it’s not the partner leader, understands why they’re doing it and what are the ramifications of going down this path. And then once there’s buy in there, then go for consensus around the exact team and then they’ll have like a like velocity around getting this thing done.

Kelly Sarabyn: I think it’s a pretty significant problem in general. And the survey definitely flagged that they flagged internal alignment actually as higher than executive buy in, which I thought was interesting. But both were cited as very frequent problems. And as part of this report, we also got ten executives from leading ecosystems to give their point of view on best practices and the state of the field. And they very consistently said it is a core part of a partnership person’s job right now to be constantly advocating internally and both bottoms up and top down. So you need to be advocating to the executives, but you also need to be doing the work to get directors and managers, VP’s in the sales team, the marketing team buying into partnerships. And I think that’s just where we are as an industry right now. Everyone in the partnerships community is hoping that all these other functions start to become partnerships first. But the reality is most organizations aren’t. As Asher was describing, it’s usually the direct go to market function is built first and then partnerships is kind of an add on to something that’s already built out and they bring in someone and they often don’t even really fully understand partnerships and they’re deferring to the partnerships person to be the advocate for partnerships and to explain what it is that’s where most people find them themselves in now.

Kelly Sarabyn: So I do think it’s a huge struggle. And the interesting connection to partner ops, right, is that, you know, the number one problem that organizations said their deficiencies and partner ops was causing is that they’re unable to track the full impact of partner ROI. So therein lies the challenge, right? If you can’t get the budget and the head count to actually get a partner ops person in there and set up set up what you need to get in terms of systems and processes, you can struggle to show the ROI that you need to show to move it to the next level. So I think the the best motion around that is to start small, show the impact and then gradually scale it out and get more resources on the operations side as you go. Because ultimately, if you want to fully entrench yourself across the organization, you need the tracking in place to show that you’re driving partner influence impacts on retention, things that aren’t just transactional, right? Because those are easier to track. And that’s why, like pure reseller partners can have an easier time ramping up and getting established because it is it is easier to attribute and it doesn’t require as much cross-functional alignment and cross-functional data.

Asher Matthew: And if I can expand on that, right, like if you think about it from a cross perspective, because I was I’ve been in the role before, right? So you have sales led, marketing led, customer led partner led, product led, community led, right. Like there’s just a lot of things to layer in. What’s interesting is the minute a CRO gets planted, like the first hire they would make is rev ops and they would want somebody that is operational and helps with strategy and health reporting and all these things because they need somebody to take the strategy and implement it. And then what partner leaders do is they go in and they say, Well, let’s go figure out the first four partners that will get a deal. That’s kind of how we’ve been taught because of all of the background that we’ve all had in channel sales. Right. But given that partnerships has such a broad scope now, or definitely in SAS, because SAS Partners does almost always start with product, which is integrations, right? The the recommendation that I would make is people should think about actually asking for a partner ops headcount first so that you’re building things for scale. And like Kelly just mentioned, right, like the, the inability to track the full ROI part of partnership relationships was like the number one thing that that organizations aren’t realizing without this headcount. But the larger piece, at least in my opinion, is actually the most go to market opportunities. Right. And even at at bandwidth today. Right. Sometimes we partner with our competitors. And and, and, and we can partner with all of our competitors. Right? But we can partner with a few of them. But if we wanted to do this at scale, we would definitely need partner ops in place and they would be able to identify these gaps in our go to market and work with sales ops and marketing ops and make sure that we have an insurance policy to our direct plan. And this is how you can create this, like let’s call it macro cycle that allows you to cross your numbers every single quarter.

Tori Barlow: Yeah. Yeah. I think the measuring piece is is really important if, you know, there’s so much information out there right now. I think partner programs are really robust in larger organizations just getting started and others. So there’s a few different elements that folks need to take into consideration. Kelly I know in the survey results, folks that did have a partner ops headcount or a bigger partner ops team did see greater success in some of their numbers. Can you kind of talk a little bit to that?

Kelly Sarabyn: Yeah, it was far and away the factor that was most associated with driving more revenue for a partner. So when you looked at organizations that were driving 26% or more of their revenue from partners, of people who had at least five partner ops people, over 90% of them were in that bucket and that was over double from what like the average survey response was. So it was even more of an impact than people who had 250 partner professionals on their team. So that like had a lower impact on driving more revenue because I think you can continue to add partner headcount, right? But you keep it, but it’s not necessarily scalable if it doesn’t have good partner ops behind it because it just continues to be very managed on the individual level. So so your profit margins are just much lower. And so I think that’s why we saw that even these very large partner teams are less likely to be driving high revenue than the companies that say we’ve made this big investment in partner ops. We have more than five people working on this full time as their job. So I definitely think it’s it’s crucial because it puts that virtuous cycle in place as well as you’re you’re proving all the different ways out that partners can impact.

Kelly Sarabyn: Then you’re able to get more budget, you’re able to get more resources and you’re able to pursue more of those go to market opportunities, right? Because that all requires headcount and requires budget. And so I think operations can put that virtuous cycle in place. The other thing it can do is give you that feedback that you need to optimize the partner relationship, right? Because we don’t have established playbooks as much as marketing and sales does. So organizations need to experiment, they need to fail fast. They need to really continue to refine that ideal partner profile and say which of our partners are driving the most revenue and impact for us and how do we reinvest in them and re motivate them because there’s different ways you can try to motivate people, right? And you really have to tailor it to the particular partner type, the particular profile. And that’s where that data feedback helps you to keep refining. So you actually get to a point where you’re optimizing on that.

Tori Barlow: Look, let’s just also call it what it is. I think there’s a lot of conversation around of you have to measure partner performance. There’s so many different metrics you can measure. But the name of the game here is you have to show revenue. I think the partner program isn’t showing revenue that bottom line or whatever you look at, it’s going to fail. And it sounds like getting something in place from an office perspective. Looking at the right data and to your point by partner type is uber important. You have to start there versus bringing in all these partners first, showing like that’s a key success metric. Like, I think we need to be clear here. It’s like we need to show revenue for a partner program to be successful.

Asher Matthew: 100% agreed. And the I’ll make the the executive case for having this head count is you don’t want your functional like partner and customer facing resources doing this back office work because guess what all the time that you don’t have your program instrumented or your technologies working together or you know a partner ops person has access to both Salesforce and Marketo for marketing automation and maybe all the partner tech tools that can stitch all this thing together. Your partner leader is going to go do that because you’re going to effectively ask the partner leader, show us the ROI, and then they’re going to say, okay, I’m going to go find the ROI. So whether they do it themselves or they go and talk to your ops resources, they’re wasting all of that time. And if you look at, let’s call it the salary of a partner ops person and and divide it by the the total revenue that you expect the partner program to generate, it’s a it’s a fraction you know it’s probably more efficient to have a partner ops person focused on this even more efficient revenue that’s coming in versus having sales ops and marketing ops against a very costly like direct program.

Tori Barlow: Yeah. Look, I’ve read through this report. It’s pages and pages of just wealth of knowledge from all partner leaders, different partner types, different company sizes. Everyone in a partner program world needs to read this report. Kelly Where can people go to to find it?

Kelly Sarabyn: If you go to HubSpot and look for state of partner option programs 2022, you will find it on our site and it’s available for everyone to download for free. And as Tori said, it has a lot of actionable information in it, as well as insights into what people are doing now and what programs are struggling with and the costs that they’re seeing for failures around programs and ops.

Tori Barlow: Everyone listening? Hurry. Go read it. Your partner programs will be so much better next year and you’ll learn so much. Thank you to our guests, Kelly and Asher, 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.