Partner programs have proven to help businesses grow and reach new users. Vendors want to increase their sales as much as possible, and through collaborating with channel partners that share similar values, they can expect an increase in revenue, diverse users, and brand recognition. However, this is an easy task without proper knowledge. The following steps will guide you towards building a successful partner program.

1) Study your competitors 

Conducting research on your competitors is a good way to start. The following are some of the key factors you need to look at:

  1. Target Partner Profile:
    Who is your competitor’s target market? What demographics, roles, and operational processes do they target? Knowing who your competitor selects as their target partner is key. You will be given two options: either go after your competitor’s target market or approach partners who are not your competitor’s target market. The key is to focus on one group. For example, Oracle’s partner program tends to be partners who have access to enterprise customers; whereas, HubSpot’s partner program focuses on digital marketing agencies (who have SMB and mid-market customers).
  2. Technology used to support:
    There are a variety of ways that you can support your partner channel. Some companies rely on using a “Partner Directory or Partner Marketplace” wherein partners have products (typically software) that is already pre-packed and integrated. Some use custom or off-the-shelf B2B portals like (Magento B2B, Shopify Plus, etc.) that allows Partners to easily order products for their customers. 
  3. Compensation and Incentives;
    Some companies have aggressive compensation plans for partners. For example, one company might offer a 10% commission that is perpetual, whereas another company might offer 25% commission, but it depletes year over year to a minimum of 3%. If you compensate your partners too much, your company’s ability to generate profits and invest in R&D will be hindered, whereas if you offer partners a more aggressive compensation (with all things being considered equal) you might be able to capture partners from your competitor.
  4. Go-to-market plan in acquiring partners:
    What did your competitors do to acquire partners? Did they allocate the bulk of their marketing budget to paid-advertising? Do they focus on inbound marketing? Do they focus on cold-calling and trade shows? 
  5. Training and support provided:
    What kind of training, certifications, and support of provided by your competitors? How do they brand their training? Do they offer sales support? 


2) The End Goal

Every company has a set of business objectives which lay the foundation for business planning. This is what they wish to achieve in a specific period of time. By initiating a partner program, what does your company want the business outcome to be? These could be any of the following:

  • To create an end-to-end solution for your customer. Apart from providing your customers with the application program or system, you can also provide them with all hardware and/or software components and resources without the involvement of any other supplier.   
  • To add another source of revenue along with the full solution. The more partners you have through partner programs, the more likely you are to expand your business to more markets and customers, therefore, generating new sources of revenue. 
  • To further expand your market. Partner programs can give you an opportunity to tap into unexplored competitive markets and test your ability to reach a newer set of potential customers. The partners can give you the assistance required to understand the likes/dislikes and the demands of this new market. 
  • To acquire new logos. Acquiring new logos will only add to the goodwill you will gain in the market. The more partners you build mutual success with, the more likely you are to attract more customer loyalty in the long run. 
  • To retain and grow existing customers. Exploring new markets and gaining new customers does not mean that your hard work ends there. You have to make sure that you retain your old customers. Through partner programs, you get an opportunity to collaborate with some of the biggest companies which not only helps to gain the trust of their customers but of your already acquired customers too.
  • To fulfill unmet market needs. If the feedback suggests that there are still some needs of your customers that are unfulfilled, you can collaborate with partners that could help you in meeting those demands which could otherwise not be dealt with by your business.  
  • To create a new distribution channel. Channel partners boost sales and decrease time to market. Through partner programs, you are adding a new distribution channel, that would ensure that the finished product reaches the end consumer on time and also provide them with more benefits. For example, GILT Groupe partners with brand such as Calvin Klein and Quicksilver, providing distribution by promoting products at discounts. 


3) Define Your Type of Partners 

It is important that the partners you choose are relevant to your business. A successful partnership depends greatly on what value the partners bring to their customers. Following are a few partner types that may be relevant to your business:

  • Value-added Resellers (VAR): These are companies that resell hardware, software and/or networking products. The value is what they provide beyond order fulfillment, such as warranty on repairs, etc. 
  • Managed service providers (MSP): These companies offer products specially to service providers. They manage a customer’s IT infrastructure or end-user systems under a subscription model. In a lot of cases, a vendor may sell to MSPs as well as through them.
  • Consultants: With a lot of experience under their belt, they work independently and offer advice and the best solutions to their clients. However, consultants may recommend products and not resell them. In this case, the vendor can offer a liaison program wherein they can offer value such as product training and dedicated support.
  • Original Equipment Manufacturers (OEMs): Though initially a much broader term, today OEMs refer to companies that rebrand a manufacturer’s product and then sell them to the end consumer.  
  • Independent Software Vendors (ISV): These vendors create and sell software products that run on one or more computer hardware or OS platforms. 
  • System Integrators (SI): An individual or business that builds computing systems for clients. They do this by combining hardware and software products from multiple vendors.
  • Distributors: They act as a link between the producers and another key player in the supply chain which may be the retailer or the VAR.


4) Conduct a Thorough Research on Your Potential Partners

Oftentimes, it may seem that businesses can work well together. But there has to be a common thread that links them. The following are some key aspects of a potential partner you could research on:

  • Business Objectives: What is their vision, mission and core values? Do they align with yours? What is their expected business outcome? What are their go-to-market capabilities (sales, marketing, customer success)? What is their relationship like with your competitors? These will give you a much better idea about how compatible you can be with other businesses.
  • Customer Profile: Who is their target audience? How successful have they been in forming a connection with them? Do they plan to expand their market in the future? Does their ideal customer profile overlap with yours? It is equally important to partner with businesses who are involved as much as you to your customer’s success.
  • Key Statistics: These may include some numbers. What is their ROI (return on investment)? What have their sales been over the past 5 years and what is their growth trajectory like? Most importantly, the customer satisfaction. Every business’ ultimate goal is to generate profits and retain customers. You have to make sure that the businesses tick one or more of these boxes for a successful collaboration.
  • Benefits to Your Business: Do you share mutual customers? Will they be interested or in the need for your services? A partner can help in focusing on your customers and delivering excellent solutions that would be of true value to them. Are they using technology that is unique and not obsolete? Do their growth plans include targeting new markets, which may be where you see your business heading towards too? Can these prospects help in solving client problems which your business cannot? If these boxes are ticked, partnering with them could be a great opportunity. The right partners would ideally help your business to grow through sales and marketing activities. 


5) Strategize a Plan to Approach these Prospects

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Now that you know the type of partners and who you see an opportunity with, the next step is to strategize how you would reach out to them. You can create a full-fledged marketing plan to approach these potential partners with the help of the SOSTAC model, created by PR Smith in the 1990s. This is a combination of six factors of your business that should be considered before forming an effective marketing strategy:

Situation Analysis: The first step in this model is to identify where your business is placed currently. Before approaching a prospect with a marketing strategy, you need to analyze your own strengths, weaknesses, opportunities, threats, resources and services offered. This helps you to improve in areas that you think need to be altered.

Objectives: These go back to your end goals. What is your incentive? What do you wish to achieve? Is it to expand your customer base/reach a wider market? How much will this cost to do and in how much time?

Strategy: This is to help you emphasize on how you plan to achieve your objectives. How do you plan to get yourself to where you want to be? How will you deliver results from the goals that you wish to achieve? What is your intention or what message do you want to put across to your prospect? How will this make you stand against your competitors?  

Tactics: This is primarily the marketing mix that you would require to reach your audience (i.e., Your potential partner). Which, from your experience, would be the most effective among the 4Ps? What form of promotion strategy would you use? What data do we have on the target audience to use that particular strategy? What techniques or tools can we use to improve our tactics? 

Actions: This is based on what action you will take to execute your tactics effectively. What are the goals that you plan to achieve each day that would help you get closer to your target? On what basis will you assign a team to ensure excellent execution of the plan?  Would you require extra support from external sources? If so, what would be the best way to acquire it?

Control: This is to measure whether the executed plan is achieving the target or not. How do you plan to monitor this? What key metrics will you use to ensure the plan’s success? Do you have a Plan B in place, in case the first one is a failure? What is the response you have achieved since the launch? Have the potential partners managed to get back to you to discuss the deal further? What would you do differently that would help your next strategy to be more effective? 

Regarding the ‘tactics’ that could be used to reach out to a prospect, one would definitely ask, “What’s in it for me?”. You should be able to offer them benefits or a value that will propel them to partner with you. These could be:

  • Delivering timely professional and knowledgeable support at any point of the sales process
  • Offering training programs that would help the partner to be in tune with the market and its possibilities
  • Delivering pre-qualified leads. Pre-qualifying is a method to test whether a customer who has expressed interest in your products and services meets the general buying criteria. Although it is often discouraged due to the process being time-consuming, it helps you to focus your energy on those potential clients that will most likely make the purchase. 
  • Regular meetings to help partners connect with your team, to stay connected and work towards building better solutions for your customers.
  • Offering them a referral bonus for bringing more business to you. For example, WP Engine’s ‘Agency Partner Program’ offers a special referral bonus for partner referrals.
  • Offering a range of financial benefits and sales tools. For example, Dell offers its partners profitable financial incentives, marketing funds and rebates along with access to world-class solutions and demand generation programs. 


6) Foster a Healthy, Transparent Relationship 

This is the key to any successful partnership. The following could be exercised between businesses to maintain a successful partner program.

  • Clear Roles and Expectations: This ensures that everyone is on the same page. The partners should discuss what role they shall play in the sales process beforehand, to avoid any misunderstanding in the future. Also, what are each partner’s expectations from the other should be made crystal clear. Equally dividing roles and responsibilities always helps in building a successful partnership. 
  • Transparency: For the purpose of mutual benefit and sound business practices, there has to be a level of transparency to help businesses work in tandem. Every partner should know what needs to be done to get the maximum support from your team. Partners should have access to support manuals, instructions, videos forums and other basic information that could help them in providing excellent support to your customers in both the pre and after-sales phase.
  • Feedbacks: Partner feedbacks should also be encouraged to help understand if you are at tandem with them. If not, it gives you an opportunity to adopt new steps to improve the partnership. You can do this in the form of surveys done internally within every team of the businesses that could be conducted quarterly or annually, as per the convenience of you and your partners. 


7) Measuring Impact 

After the execution of a plan comes measuring the impact. In relation to the goals you had set up for your business to achieve with a partner program, key metrics could be chosen to help gauge the success of the partnership. These could be one or more of the following: 


  • The number of prospects a partner refers to you. Referral partners recommend companies and services in exchange for a value, therefore, bringing more business to your company. For example, Zoho offers incentives to its referral partners for signing up customers to any five of their 30+ cloud business apps. More referrals ensure greater success for the partner program. 


    • The number of clients you refer to your partner/s. Likewise, your business brining more clients to your partners based on their defined target market means that the partner program is a definite success. 
    • Revenue from partner-sourced opportunities. This would be the additional revenue generated with the help of your partners. For example, in supplier partnership, many key activities would be taken care of by the supplier while also ensuring reduced costs and increased efficiency, along with constant improvement of operations. Thus, ensuring revenue from customers. 


  • Revenue from services in relation to partner technologies. Partners can offer you benefits such as up-to-date technology, that can in turn help you in offering more services to your customers. Thus, generating more revenue. 


  • Marketing Qualified Leads (MQL) from joint programs. It is basically a lead that is more likely to become a customer in comparison to other leads. A high number of MQL ensures that the sales team is providing quality leads to improve productivity. 


The Don’ts- What You Should Avoid in a Partner Program



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Now that we have discussed in full detail about the key factors in building a successful partner program, it is also beneficial to know what factors could lead to its failure. These pointers would help you to have an alternate plan in case any of the above steps do not go as planned.

  • Stop looking to improve the program once it has kickstarted. Once you have formed an alliance with your channel partner, it does not end there for you. You have to ensure that you build a long-lasting relationship with them. Make sure you provide them with the best of technical support and industry knowledge. Get their feedback as much as possible. The last thing you would want is your partners to mistrust you and start reconsidering the alliance altogether.


  • Lack of clarity. It is advisable to be clear about goals and objectives throughout the partner program. Any important business decision that may involve them directly or indirectly should be notified to the respected partners as soon as possible. Your partners finding out about these decisions from other parties is never a good look and can hamper the partnership in future.


  • Geographic Diversity. Apart from differences in the mature and emerging markets, there are other things to consider. These could be governmental, financial and cultural differences. Geographical barriers may hamper communication and businesses coming from completely different cultural backgrounds may also create misunderstandings. With the advancement in technology, it is always imperative to conduct adequate amount of research to find ways to overcome these barriers.


  • Investing in Inefficient Systems and Resources. Without appropriate allocation of resources, even the best programs can’t come to life. While you can outsource some areas to deliver various pieces, internal sources are still required. Partners want to make sure that you use updated technology and resources to provide efficient technical support when needed. Using inadequate and obsolete resources can affect your relationship not only with your partners, but also with your loyal customers.


  • Not Signing up the Right Partners. Jumping into a partnership without thorough research can create a lot of obstacles in the future. Some businesses may be completely incompatible but may agree for a partner program solely based on the benefits offered to them. They may later come to terms with this when they find a mismatch between the business model and expectations of theirs and their partner’s.