Partner implementations

March 30, 2010

As with choosing a partner to sell for you, selecting a partner to implement (install licensed product or configure SaaS product) your product is very similar to hiring your own professional services team.  You need to determine:

  • Roles
  • Criteria for selection
  • Rules of engagement
  • Training
  • Rates.



As the company establishing a channel, your role is certainly to confirm your prospective partners’ capabilities and overall fit with your business.  More specifically, in the case of implementations, you’ll want to:

  • validate the technical skills of potential partners
  • judge implementation abilities and fit between you and your partner’s professional services organizations
  • align professional services rates and assess availability of suitable partner resources
  • determine when your partner is ready to perform implementations.

Once ready, your partner will be responsible for implementing, or sharing in the implementation of, designated customers.

Partner Implementation Skills Criteria

Typical criteria for partners interested in performing implementations include the following:

  • Domain expertise in your solution area
  • Hands-on experience performing integrations with complementary solutions
  • Extensive project management experience within a software or consulting environment
  • Familiarity and experience with software development and implementation methodologies
  • Successful management of numerous software implementation projects
  • If appropriate, familiarity with SaaS technology
  • Familiarity with specific technologies used to develop/support your solution.

Rules of Engagement

It’s best to set up rules of engagement to govern implementations just as there are rules to govern joint sales efforts.  Following are some suggested rules:

  • The partner who brings the customer “owns” the account for purposes of the product implementation
  • The partner responsible for implementation will provide project management oversight
  • Either partner may be called on to staff a project.  Earlier projects will include a certain number of your consultants in order to ensure the project’s success
  • Both partners will “share” the risk associated with delivery
  • Working with the partner, you will determine if and when and for what price you will provide any customizations.

Implementation Training

 Typically, smaller companies or those with new partner programs will provide training at their facilities for free or via webinars to partners.  Partners will pay for any travel and expenses associated with attending training.  Larger companies will offer training at a discounted price.

Implementation Ramp Up

Whether performing SaaS configurations or enterprise customizations, partners will need to ramp up over time. As soon as possible after training, you should arrange for your partner to shadow you at an implementation. Your partner will not bill for this implementation, but will be able to bill at 50%, for example, at a second implementation assuming the partner is able to perform 50% of the work.  As soon as they are ready, a partner will perform 100% of the implementation and receive 100% of the fee.  Once the partner has assumed responsibility for implementations, your company will provide remote support.


Partners usually agree to designate a fixed number of qualified and mutually agreed consultants to be trained on your products.  This insures sufficient resources for delivery and reduces your support load since you don’t have to keep training new consultants or answering questions from untrained ones.


To facilitate contracting of services, rates between you and your partner need to be similar so the customer is not biased in selecting one or the other.  Typically, partners can subcontract services from each other at an agreed discount (somewhere between 10% and 35% is common) off each party’s published prices for deployment services.


Creating demand with your partner

February 16, 2010

Nothing kills a partnership faster than lack of demand for your product.  As a result, one of the most important things you can do for and with a partner is to generate leads.

Not to get wrapped up in process, but you and your partner should have a marketing plan.  At the least, that plan should set a goal for expected number of leads, create a schedule, determine how leads will be generated, and decide who will do what to make it happen.  Of course, creating demand assumes collateral, people, tools, etc. are in place. To that end, below is an outline of points to be considered in enabling demand creation. Most of the actions suggested involve nothing more than a time commitment; any seminars you decide to hold or email lists you may rent will add expense.

The Basics

  1. Contacts
    1. You and your Partner will each assign an account manager who will work with both companies’ sales, marketing and professional services to maximize revenue
  2. Internal Announcement
    1. You and your Partner will draft announcement e-mails describing the Partnership to your respective sales forces and internal company audiences.  You both will be presenting the benefits of the partnership to your sales forces as part of training them to sell and work together.
  3. External Announcement
    1. You and your Partner will draft announcement e-mails describing the partnership to your respective customers.
  4. Corporate Website
    1. You and your Partner will add your logos to each others’ web sites
    2. Press releases about the partnership will be added to each others’ websites
  5. Partner Website
    1. You will create a Partner web site allowing each Partner password protected access to sales and marketing information (customer presentations, collateral, pricing, RFP responses, etc.).
  6. Press Releases
    1. You and your Partner will issue a joint press release announcing the Partnership 
    2. You and your Partner will coordinate joint press releases as needed on an on-going basis
  7. Collateral/Sales Toolkit
    1. You will provide product collateral, success stories/use cases, reference accounts, customer presentation slides (with scripts including what questions to ask a prospect).  You may also provide RFP responses, ROI tool, white papers.  You and Partner may decide to jointly brand or private label the materials but, at the very least, take advantage of joint customers to create success stories illustrating the benefits of the partnership.
  8. Training and Demos
    1. You will provide sales and pre-sales technical training and will make demos accessible to Partner.
    2. You will provide demo support to Partner.
  9. Pipeline review
    1. You and your Partner will hold regular pipeline meetings to review opportunities and determine sales strategy.
    2. You and your Partner will hold quarterly meetings concerning sales activities, working relationship, cross-sell opportunities, pricing, marketing needs, product updates, market trends, publicity, analyst reports, etc.
  10. Industry analyst coordination
    1. You and your Partner may decide to jointly coordinate briefings to industry analysts or conduct a joint analyst roadshow

Lead Generation

  1. Campaigns – targeted to specific audiences, lead generation campaigns will be crafted with each Partner with the intention of generating joint leads from both companies’ customer and prospect bases.  Options include:
    1. Webcast:  You can record a Webcast with your Partner.  This can be posted on each others’ websites, included in newsletters, blogged, tweeted. 
    2. E-mail blasts:  You can send joint e-mails with your Partner that are customized to specific audiences.  You and your Partner can send to your respective email lists. 
    3. Newsletter/Blog Highlight:  In addition to announcing Partners, you can provide coverage of Partner-related customer wins, whitepapers, speaking engagements, etc.
    4. Speaking engagements and seminars: You and your Partner can obtain speaking engagements at relevant venues or hold joint seminars.
    5. Joint content: You and your Partner may decide to generate joint content to kickstart customer discussions/engagements. 
  2. Targeted selling
    1. You and your Partner will create a list of targeted accounts to pursue together
    2. You and your Partner will introduce members of your respective sales forces to each other in order to facilitate joint sales calls.  Be sure to leverage joint customers to help break the ice and showcase the benefits of the partnership.

With the framework in place, you can now craft marketing plans with each of your partners that assign goals, timelines, events, and responsibilities. To the extent a budget is required, it is common to split costs 50/50.

Next: Partner Implementations.

Recruiting partners

February 4, 2010

Recruiting partners requires an old-fashioned sales campaign. 

Here are the key points:

  • Create a target partner list and prioritize it: see Identifying Prospective Partners and Prioritizing Prospective Partners.
  • Create a joint value proposition: understand the prospect’s goals/challenges so you can add value—what’s in it for them?  What falls off their plate?
  • Compare customer lists: joint customers can make great use cases and reasons to introduce the idea of partnering.
  • Leverage a contact: use LinkedIn, or leverage a recent press release touting your company or a new partnership with your prospect’s competitor.
  • Email/call high: deliver a tight (short) joint value prop as high in the prospect’s organization as possible. Send an email, then call.  You may need to deliver the message to multiple targets within the prospect.  Follow up.  Be polite and persistent–they may be out of the office.  If you’ve tried several times and received no response, chances are you’ve got the wrong message, they really aren’t interested, or the fishing is really good.
  • Sponsor a gathering: organize an event featuring an interesting speaker and invite a target list of prospects.

See the Partner Types post for information regarding agreements and terms.

Once you’ve signed a partner, congratulations, you’re 10% of the way there—now the real work begins to make the partnership successful (see Enabling a Successful Partnership).  If you’re sure of the potential, you can try accelerating the path to revenue by beginning training while concluding the agreement.

Next: Partner Demand Creation (creating leads for partners to close).

Prioritizing prospective partners

February 4, 2010

Once a target list of prospective partners is identified, what criteria can be used to prioritize it?

There are several major criteria as well as a number of checkboxes that can be considered.  While not all the boxes need to be checked to have a successful partnership, it will be tough to expect much from partners who don’t score well on the key criteria.  As always, guidelines can help you be strategic, but there are plenty of instances where partnerships are opportunistic–based on the old business development adage that the best deals are the ones that keep coming back to you.

Key criteria:

  • Alignment of goals/business models
    • Similar target buyers (industry, size, title, use cases)
    • Joint value proposition that appeals to prospects
    • Joint agreement on definition of a successful partnership (partnership objectives)
    • Incentives on both sides that encourage cooperation and sales
    • Ability to create working relationships between sales teams.


  • Attitude
    • How interested you both are in working with each other–in other words, buy-in acoss both organizations.
    • The influence and objectives of your champion within the partner. No matter how ideal the partnership, if the internal champion doesn’t have the juice to get it done, you will spin your wheels.
    • Ability/willingness to execute joint plans.


Now for the checkboxes:

  • Technical compatibility: your solution and theirs will need to integrate to lesser or greater degree and both company and partner will need skill sets that can handle the technologies.
  • Size of partner sales force: how many reps can you expect to be selling your product?
  • Partner sales skill set: if your product requires a solution sell, for example, does the partner’s sales force have that ability?  You’re hiring a sales force so they should look like the folks on your team.
  • Experience working with partners: look at the percentage of revenue your prospect derives from partners, the names and types of their other partners, their reputation working with partners.
  • Business reputation: not only do you want to work with those with a solid reputation but their brand may lend credibility to your efforts.
  • Financial strength: just like any investment, you want to make sure it’s a good one.  It’s tough to spend the effort closing a deal only to find out your partner is slow in paying you.
  • Cultural fit: values, decision-making–some companies work well together and others don’t.  You should get a sense for this in the course of partnership discussions.  It’s important to get as much face time with your counterparts as possible so each of you can get a true measure of the other.
  • Strategic advantage: Can the partner create strategic advantage by taking you where you want to go?
  • Number of implementations performed: if relevant to the form of partnership being discussed, this may give you a sense of how much experience your prospect has.
  • Compatible average selling prices and pricing models: it’s tough for your partner to resell a $200K license when theirs is only $20K.   Likewise, if they charge per user per month and you charge upfront, that won’t work either.  It just means you need to work out consistent pricing and set parameters if you’re concerned about the new pricing model bleeding into your market.
  • Ease of training sales, pre-sales technical support, implementation team: How well do the partner’s existing skill sets match your own? How ready is your product to be handled by others?
  • Partner uses your product: some may give preference to those partners who use your product in their business.

Finally, a couple tips:

  • You may want to prioritize geographically closer partners higher–it can make your life easier assuming you’re spending a lot of time with them.
  • Avoid wasting time on prospects who can’t say “no.” The best deals are the ones that keep coming back to you with enthusiasm.

Next: Recruiting Partners.

Enabling a successful partnership

February 3, 2010

Successful channel management has two golden rules:

1. Align thyself with thy partners.

2. Do unto thy partners as thou wouldst have them do unto thou.

Call it aptitude and attitude but, as they say, most of this we learned in kindergarten.

Expanding on the rules above, here are the key points:

  • Alignment: your success will be a function of how well your goals, incentives, sales forces, products are aligned with your partner’s. Executive buy-in and engagement from both parties is key. Any disconnects here should be a red flag.


  • Attitude: success is also a function of personal relationships built between you, your company and the partner.  Shared commitment is essential.  Otherwise, life is too short.


  • Upfront effort: internally consult with your sales, marketing, finance, legal, development, management teams to gain buy-in regarding your partner program. (A partner program would focus on many of the categories outlined in this Channel Management Best Practices blog.) Will your sales force and senior management proactively support partners?


  • Company culture: partnering is one of those things that can be in the company DNA or not.  Some sales people play well with others; some don’t.  Some companies’ direct sales heritage is so strong that channel conflict is a given. Many times, it seems it’s the more experienced sales folks who believe in the karma of putting good stuff out there and having good stuff come back. They know they can do more business by taking their army of one and creating lieutenants (partners) in the field. They get that “you scratch my back and I’ll scratch yours” makes the world spin round.


  • Sales: align your sales force and your partner’s so relationships can be built.  This is critical, and it starts at the top beginning with the sales management teams working together. People need to trust each other for business to be done and especially for control to be shared over accounts.  Line up territories, accounts, industries, whatever the metric and compare customer lists.  Take the initiative and have your sales folks reach out to their counterparts.  Organize a joint event.  Find a few joint customers and leverage them. Find a few joint prospects and work together to get a deal in the door (your team may need to do most of the work and then credit the partner’s team for the result).  Then promote that success.  


  • Incentives: without the proper incentives, all is lost. The partner has to have sufficient sales incentives in place to encourage sale of your product.  Even better would be quota credit. Likewise, your direct sales force must be compensated to reduce channel conflict. Typically, this is done by compensating them on the net revenue regardless of whether they sell or the partner sells the account. A completely neutral channel plan would compensate your sales force on the gross revenue. Your direct sales force may or may not get quota credit.  If you have a channel sales force, they would get quota credit and typically be compensated on net revenue.


  • Support: partners need lots of support. This does not mean becoming a nuisance but it does mean on-going training and sales, marketing and technical help.


  • Training: realize that you probably have room for three bullet points in the minds of your partner’s sales force: 1. the problem your product solves, 2. how your product solves the problem, and 3. who to contact if they find an interested prospect.  For reference, the appendix of your presentation should include a slide each on your company, qualifying questions, customer success stories, competitors, and, most importantly, how the partner’s sales force makes money (mention this upfront in the presentation so you’re sure to have their attention).  Show a demo, but keep it under 10 minutes. (See the post on Partner Marketing for info on collateral, etc. used to support sales.)  Save the nitty gritty product details and demo training for a presentation to the pre-sales technical folks.


  • Respect the partner’s business: do not overload them with metrics and certification requirements.  They have a business to run so don’t demand more of their time than they can give. Focus on generating demand–the more demand for your products they see, the more time they will devote to your products.


  • Create demand: prime the pump with leads/deals. Facilitate early wins to gain partner mindshare.  Direct sales will need to refer business to partners to help make this happen.  This could involve a major shift in thinking for the sales team and is part of the reason you’ll need to get internal buy-in upfront.  See also points on Company Culture, Sales, Incentives above.


  • Clear rules of engagement and escalation:  Everyone needs to know what’s allowed and who to go to when disagreements arise.  The easiest way to format rules is to address what happens in the case of simple scenarios: partner gets lead first, company gets lead first, both acquire the same lead independently, one acquires a prospect/customer and then the prospect/customer calls the other, how to handle each other’s existing accounts, one loses a customer that is an interesting prospect for the other, when to disengage from an account.  Leads must be registered and approved by sales management to be eligible for commission payments.  There’s no way to think of all the scenarios that might arise, but an effective process and solid relationships between sales teams will go a long way to addressing anything that comes up.


  • Effective communication: profile your partner’s information needs and the frequency of contact they desire so you can send only the info the partner wants when they want it.  Like as not, they represent products across multiple vendors and are inundated with “helpful” material.  Keep it simple, make their lives easier and they’ll love you for it.

 That’s it (and that’s plenty) for the major points.  Here are some minor ones:

  • Pricing: many companies offer greater discounts for upfront license purchases. That’s okay but sometimes larger discounts are also given to larger partners on the assumption they’ll drive volume.  A better tack may be to offer improved pricing only to those partners who sell more, regardless of size.
  • Planning: your go-to-market plan with your partner should be regularly updated.  Invariably, the agreement will call for periodic updates and just as invariably they don’t happen.  Partner planning should occur in parallel with your own sales force planning.
  • Incorporating partner feedback (product and otherwise): partners can be a good source of customer feedback as well as input to partner specific features.  Demonstrate commitment to the channel by making partner comments part of your company’s feedback system.
  • Pipeline and forecast: capture partners’ customer opportunities in your CRM system.  This may require modifying the system a bit in order to track opportunities by partner. Per the rules of engagement, leads must be approved by sales management to reduce misunderstandings and channel conflict.
  • Skin in the game: Once your partner program has gained traction and you find yourself receiving inbound partnering inquiries, many companies charge for participation to encourage partner “skin in the game” and as a mechanism to help weed out less committed partner prospects.

Next: Identifying Prospective Partners.

Definition of a successful partnership

February 3, 2010

What is a successful partnership?  At its most basic, it’s one that meets the objectives of the parties involved.  Those objectives could be:

  • generating revenue
  • expanding reach across a market or markets
  • filling a product gap
  • blocking the competition
  • improving brand image
  • gaining strategic advantage (for example, offering a one stop shop via an integrated suite of products)
  • facilitating a merger or acquisition.

At the end of the day, a successful partnership solves a business problem or problems.

Next: Enabling a Successful Partnership

Identifying prospective partners

February 2, 2010

Identifying prospective partners is a matter of triangulation.  Here are some ways to chart your course:

  • Identify your buyer and who is selling to that buyer
  • Call customers and prospects and find out who they recommend as partners
  • Create a list of your competitors’ partners to identify players and most popular players
  • Ask sales, management, existing partners, industry/financial analysts
  • Identify partners based on product gaps you want to fill.

These are fairly self-explanatory.  Using a combination of them should produce a comprehensive list to target.  

Next: Criteria to Select Partners.

Channel product requirements

February 2, 2010

From a business point of view, there are several requirements for software channel products:

  • referenceable direct sales customers

Customer references serve as proof points for the partner that there is demand for the product.  If you can’t demonstrate customer successes, it will be hard to convince a partner you’re worth the investment.  Partners will also need to leverage customer success stories in their own marketing (see upcoming post on partner marketing). 

  • a willingness and ability to relinquish control over sales cycles and implementations to partners

If a company is unable or unwilling to allow their partners to sell and implement their products, that essentially narrows the possible partner types to referrals.

  • in the case of many software-as-a-service (SaaS) products, the ability to reasonably easily train partners on the product

SaaS products, by their nature, are less complex than traditional enterprise software.  As such, there is typically less services revenue associated with them.  With less revenue, SaaS partners will want to increase the number of deals they can do.  Consequently, if training requires a large or constant investment, that reduces the return for the partner.  

Complex enterprise software products that require a partner to invest time and money to learn are usually in the sweet spot for large systems integrators because of the substantial services revenue streams they can create.    

  • an ability to incorporate partner product feedback

As an indication of its commitment to partners and their customers, the company will want an effective mechanism for incorporating product feedback.

On the technical front, software product requirements include:

  • well documented and current APIs for easy interoperability

Inaccessible APIs or incomplete or out of date API documentation just makes life hard for resellers who want to integrate your product with others.

  • partner tools to enable data migration, workflow and user interface configuration, and any customizations necessary

To help them with implementations, partners need access to the same tools the company’s professional services team uses to perform implementations.

Next: Definition of a Successful Partnership.

Partner types

February 1, 2010

There are typically three major types of software distribution partnerships:

  • OEMs
  • Resellers
  • Referral partners.

OEMs and resellers enable companies to reach customers their direct sales forces cannot.  Partners may be working on their own or in cooperation with the company’s sales teams.

Referral partners pass leads to the direct sales force in return for a fee.   Sometimes, referral partnerships are called “Barney agreements” after the purple dinosaur on children’s TV.  Their “I love you, you love me” nature can lead to meaningless results worth less than the effort that went into setting them up. 

Successful partnerships deliver based on the effort put into them–if they’re “easy come,” they’re likely to be “easy go.”   That being said, if companies find themselves naturally passing leads, referral agreements have a place.  Affiliate programs are a good example or systems integrators/implementers may choose to refer leads as opposed to resell.

The success of any type of partnership agreement is a function of alignment. How well aligned are the partners’ goals, incentives,  sales forces, products?  Instead of hiring an additional sales person, you’re hiring someone else’s.  Yet, the partner’s sales reps usually have other companies’ products to represent as well.  The trick is to capture mind share.  There is more on that in Enabling a Successful Partnership.

Following are typical terms for the different types of distribution partnerships:

  • OEM: 50%+ discount in return for revenue commitments, partner sells your product every time they sell their own, partner supports (except bug fixes) and implements, your license terms integrated in partner license, may be private label or not, upfront license purchases offered at volume discount, X year term with auto renewal
  • Reseller: 30-40% discount, may or may not not be revenue commitments, your product is an option partner can sell, partner provides at least first level support, partner usually implements, customer signs your license, upfront license purchases offered at volume discount, X year term with auto renewal
  • Referral: 10-15% fee paid on leads that turn into sales within a set time period, leads must qualify as such per whatever terms have been agreed, X year term with auto renewal.

Affiliate programs (where one company offers a product or service on another’s web site which may lead to a purchase) typically provide a 30% split of any revenue to the partner.

To the extent there are upfront payments or revenue guarantees by the partner, they can be used, for example, to improve discounts, term, exclusivity, or product capabilities or scope.  

While revenue sharing agreements are largely variable cost, upfront payments in fixed cost agreements (for example, a partner agrees to a long term contract to provide an input used to create a product in return for fixed fees) can be used to reduce on-going payments.  The larger the upfront payment, the lower the on-going payments.  

There has been some discussion that software-as-a-service (SaaS) partnerships are different from traditional enterprise software agreements.  While there is typically less complexity and less implementation associated with SaaS installs, it is still necessary to configure workflows and user interfaces, migrate data, integrate with other applications, and support customers.  These differences are likely to impact which partners you choose but not the need to support the customer.

Next up: Channel Product Requirements.

What is business development?

January 31, 2010

The purpose of this blog is to discuss best practices for software business development.

So what is business development anyway? 

To many, it seems somewhat unclear or at least capable of wearing many hats.  To cynics, it can be an excuse for investing a lot of time and money for questionable results.  When done well, however, it produces game changing results. 

Business development is responsible for creating new revenue streams that the sales force can then stamp out in volume.  For purposes of this discussion, it is not another name for sales rep or inside sales rep.

In effect, business development helps scale direct sales.  Often, partners are used to leverage sales.  Partners may be used to increase distribution or reach customers direct sales cannot (for example, in new geographies or within certain market segments like small businesses or specific industries).  Partners can offer expertise, plug product gaps in your offering, or offer complementary solutions.

In addition to partners, business development can also develop new sources of revenue by creating new products or opening new markets.  Or, business development may seek to expand the business via mergers and acquisitions.  Folks focused entirely on M&A tend to be called corporate development and have a financial background.

Business development involves both selling and marketing, hunting and farming.  Successful practitioners have to be able to build channels from scratch and extend already existing alliances.  That means cold calling to recruit partners and then, once recruited, doing the real work of nourishing partners by aligning sales forces, forging relationships, establishing mind share, generating leads, priming the pump, closing deals, managing the partners.

If a new business is being created, the skill set becomes that of a general manager.  In addition to selling and marketing, a business plan defining the opportunity and resources required needs to be written, market research performed, a product developed and piloted, and customer support established.

This blog will focus initially on software channel management.  Future posts will address:

  • partner types
  • channel product requirements
  • definition of a successful partnership
  • enabling a successful partnership (partner management)
  • partner identification
  • partner selection criteria
  • partner recruiting
  • partner marketing
  • international expansion via channels
  • international product requirements
  • SaaS (software-as-a-service) channel considerations.

Look for the next post soon.