As many of us are coming out of Annual Planning and finalizing our budgets for 2023, you may be perplexed with how to disseminate your company vision and goals into your partner programs.
How do you properly incentivize your partners to get the results your company needs?
And how do you measure progress consistently without dedicating resources to reporting and keeping track of critical metrics?
When it comes to Partner Business Plans, they can get complicated fast. No one ever disputes the necessity of having an effective plan in place. It’s the “how” that typically throws partner programs off.
I learned by sitting in enough QBRs, silently wondering, “what does this partnership requirement have anything to do with our partnership together?” to develop my own method of writing a simple and effective Partner Business Plan. So feel free to learn from my experiences and skip ahead to the good part without enduring hours of QBRs. Here is my system for creating an effective Partner Business Plan — and fast, because who has time these days?
1. Start with One – Partner Program
If this is the only thing you take away from this post, you’ll be in a much better position than before.
So your partnership strategy includes referral partners, ISVs, MSPs, resellers, VARs, AND alliance partners? Plus, you have multiple tiers, SPIFFs, and new products to consider.
Slow down, partner. Do yourself a favor and start with one partner program or partner type. You will find that once you have outlined your first Partner Plan, the others will fall into place.
But which one? Start with the partner program that your company has identified as the highest priority with the largest potential for business impact. Haven’t completed a full market analysis yet? No problem! Just choose your program with the largest reach.
And remember, we only have 30 minutes, so we’re moving on now!
2. Start with One – Product/Service
If your business is complex with an extensive portfolio of products and services, this can make things extremely challenging for your partners regarding product clarity and messaging. Consider the type of partner first, then narrow your partner plan down to one product line, service type, or business model.
For example, let’s say your company has developed a new hardware line exclusively compatible with all major network carriers through the end of next year. It is imperative to your company’s strategic growth to expand the hardware brand to more than 10% of the domestic market by the end of next year.
Because of the time limitations on the market exclusivity rights, the longer sales cycles that usually come with the referral model make it too risky. Therefore you will expand market penetration by focusing on the Reseller Partners with a customer base that matches your ICP (ideal customer profile).
Sometimes this focus can be on one product line, a new service, or maybe even a specific business model. For example, the addition of an OpEx model on specific bundled solutions. Just think about the investments your company is making, and that will usually uncover the areas where a more significant return is expected.
3. Leverage the Partnership Lifecycle Model
Use your Partnership Lifecycle Model to outline the key elements and metrics to drive your partnership forward. Now that you have identified the partner program you’ll be starting with, it’s time to lay out the 3-5 elements and metrics that are important to the development and growth of the partnership.
The easiest way to do this is to start with my Partnership Lifecycle Model and use each stage to outline a partner plan goal. This will ensure that you have a well-rounded plan that will motivate and align the partnership, regardless of your partner’s lifecycle stage.
Consider the standard Partnership Lifecycle Model:
- Onboard & Develop: What indicates that your partner has been properly onboarded, trained, enabled, and understands the rules of engagement? What would tell you that your partner has everything they need to meet and exceed your mutually agreed upon goals?
- Co-Market/Co-Sell: How will you know that your partner’s marketing efforts are successful? What would indicate that your partner is building a pipeline as expected? Do they need to close a certain amount of revenue or number of deals to qualify for a wholesale discount or commission tier?
- Review/Manage: How will the partner know if they have succeeded?
Consider key performance indicators at each lifecycle stage:
|Onboard & Develop||
4. Work Backwards
At the beginning of this post I referenced the business planning and budgeting season that is top of mind for many of us. Now it is time to apply those company goals to your partner programs and partner companies.
To work backward to set your KPIs, you’ll need to grab a few metrics, including your historical closed-won conversion rate, standard sales cycle length, total addressable market, and more.
I will stick with my new hardware company acquisition example and focus on my reseller partner program. Let’s say my company’s goal is to expand the new hardware line to 15% of the TAM (total addressable market) by the end of next year, and 10% will come from the reseller partner program.
If 10% equates to 240 new hardware sales and activations, and I know I have roughly sixteen reseller partners with a customer base matching the ICP, then each reseller partner would need to close at least fifteen new hardware deals by the end of next year.
The direct sales team has a historical closed-won conversion rate of 68% on new hardware deals, and we are estimating a 50% closed-won conversion rate with our reseller partners. This means each reseller partner will need to build a pipeline of at least thirty deals by the end of Q2 next year (considering the average sales cycle is six months.)
Broken down further, each partner will need to register ten or more qualified deals per quarter. We will set each reseller’s goal at five registered deals per month to accommodate any deals that are not qualified.
|Lifecycle Stage:||Partner Goals and Metrics:|
|Onboard & Develop||
Take Your New Plan to Next Level
After narrowing down your focus, leverage the Partnership Lifecycle Model to outline the elements of your plan, then work backward from company goals to establish your KPIs.
Now you’ve got your partner plan built and ready to launch! To make the most of your new strategy and help hold your partners accountable, we recommend putting your plan into your PRM with Allbound’s Partner Plan.
Got questions or need help? Click here to set up a product overview and learn how to implement your plan, track progress, and increase partner engagement.
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