489: How to Set up Successful Partner Programs?
Subscribe: Apple Podcasts | RSS
In today’s episode of The Startup Chat, Steli and Hiten talk about how to set up successful partner programs.
Creating a partner program for your company is a great way to grow your customer base without spending too much on marketing and customer acquisition. However, like most things in business, you have to do it the right way for it to be successful.
In today’s episode, Steli and Hiten what partner programs are, how to create one for your startup, mistakes to avoid when creating them and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:19 What partner programs are.
03:00 Why you should create an ideal partner profile before creating a partner program.
04:22 The importance of finding the right places to promote your partner program.
05:10 How to determine who could make a good partner for you.
05:46 How the team at Close created their own partner program.
07:10 Tools to manage partner programs with.
08:39 When to start a partner program.
09:31 Mistakes companies make when creating partner programs.
09:57 Why you need an application process.
3 Key Points:
- Partner programs are different from affiliate programs
- A lot of SaaS SMBs have started investing in partner programs
- Ask yourself who would be an ideal partner for you.
Steli Efti: Hey, everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah. And today on The Startup Chat, we’re going to talk about our thoughts on setting up a partner program for your business. So, there’s affiliate programs, and those are ones where you actually give somebody sort of a payment, whether it’s a fee for when they bring you a signup, or a fee on an ongoing basis when you get a customer from them, and then there’s partner programs. And partner programs are actually quite a bit different, and they usually involve actually partnering up and having something more official happen, doing joint PR and things like that. So, that’s the topic, and that’s kind of a high level of difference between an affiliate program or partner program. A partner program, in some ways, is a deeper sort of relationship or it tends to be.
Steli Efti: Yeah, deeper commitment relationship. And I don’t know if you agree with this, but just my observation has been that in the kind of past two years or so, two or three years, a lot of SAS SMB companies have started investing in partner programs that used to be a lot more of a play and a growth channel that… and took price, enterprise companies would go after. But now I see kind of more and more SMB companies go after that. Is that just my observation, or would you agree with that?
Hiten Shah: I would agree with that. I think it used to be something that larger companies would build out. Now it’s something that I think even if you’re targeting SMBs, or you’re an SMB, you might start working on this. I mean, the markets are bigger. There’s just more buyers out there, and there’s also more companies out there. So, in a way it feels like a natural evolution.
Steli Efti: Awesome. All right, so before we go any further, and we’ll talk about kind of a few best practices to set up a successful partner program. For those of you that are interested in the affiliate program and learning more about how to do that, check out episode 361, How to Use Affiliate Programs to Fuel Your Growth. That’s an episode that we recorded earlier. So, coming back to the partner program, and a little shout-out for the Close peeps out there, Close just is announcing the launch of our partner program, so this is part of why I wanted to talk to you about this. So for those of you that are interested in learning more about how we set that up, and even potentially for some of you that want to partner up with Close, you can go to close.com/partners and check out kind of how we have set up our partner program, how we think about partnering with people, and if it’s a good fit for you and what you’re doing. We’d love to talk to you, and you can always get in touch with me directly at Steli@close.com if you want to chat more about that. So, let’s go through this real quick and give people a couple of recommendations. We can like ping pong this. I’ll throw out my first tip for people, which I think goes back to a core principle that we’ve discussed many, many times before. My biggest recommendation is to always instead of just launch, instead of just putting these programs together in the hope that they will magically bring growth, ask yourself who would be an ideal partner for you, and who would be an ideal partner for you and the type of customers that you want to reach? And then I would actually advise people, and this is an exercise that we did, to write down an ideal partner profile. A lot of people know this about the ideal customer profile. Writing down and identifying who is the ideal customer that we’re going after, you can do the exact same thing for a partner and write down who is the partner that we want. What are the kind of identifying criteria for somebody that could be an ideal partner for us, and really help us grow, and help our customers grow? And then you can also do the non-ideal partner. Who are the type of people that might be interested in partnering with us that we don’t believe can bring value to us or our customers, or not sufficient value to what we’re trying to do? And so that, if you identify these two things in the beginning, it’s going to really help you craft your messaging, find the right places to promote your partner program. And when partners apply, for instance, to become part of your program, it’s going to be much easier for your team to decide, is this somebody we should partner with or not, and how should we go about it? So my first tip for people, if you want to put together a partner program to grow your company, to grow it as a growth channel, is first specify and identify who an ideal partner would be, and who would not be a good partner before you start setting up anything else and start promoting the partner program.
Hiten Shah: Well, it’s likely that you already have people who are such great advocates that some of them could be good partners. So there is the ideology of really thinking through who has actually reached out, who’s actually helping you get more customers, or who already wants to partner with you, which many companies, at some size, end up getting. So there’s that data point, as well, that you can use which is whoever’s already sort of tried to partner with you.
Steli Efti: Yeah, I love that. And that’s actually something that we did with Close is when we started considering putting that together. One of the reasons was that there was an increased demand of requests, and we started picking a few and saying, you know what? This company, this person seems like such a potentially good fit, let’s do this in a very casual way. Let’s work with them one-on-one and see if this works and how it works. And once we had a handful of success stories where partners would bring in great customers, and collaborate and work with us really, really well, and we started seeing real meaningful numbers, we’re like all right. Let’s now turn this into a more formal thing. Let’s start promoting it a bit more. But we had, I think about like 30, 40 or so companies already that we were partnering up with in one way or another. And we had kind of a constant stream week by week of companies and people reaching out, a lot of our customers reaching out and wanting to partner with us. So, I think if you have that inbound demand, you can analyze and see what kind of companies reach out to us, what kind of companies could be really good for us or not. The other thing is, in today’s world there used to be, just like almost anything else, it used to be that you had to do so much heavy lifting to organize all of this to track it, to do the payouts, to do all this kind of stuff. But today there’s software for a lot of this. So, one recommendation that I can give for people that want to invest in a partner program, there’s Rewardful, which is kind of a SAS product that allows you to manage, host, promote, payout and deal with anything that comes with managing partner and affiliate programs. And there is partnerstack.com, which is a platform that’s gaining some steam recently where a lot of companies and people out there that are strong affiliates who have big audiences are looking to find new products to promote to the audience and customer base. And so PartnerStack and Rewardful are two platforms that I can recommend for people that are wondering, how do I manage all this? How do I deal with all of this? All right. Maybe we’ll do one more tip per person, then we’ll wrap up this. Well, but before, let me ask you, Hiten, I would typically tell people that, I mean just like everything else that we say, usually it typically depends on your particular circumstances, but I wouldn’t advise, in general, startups before they get their first hundred customers to start investing in partner and affiliate programs when it’s super early, when they don’t know if they’ve got a product market fit, when they don’t have marketing channels that work for themselves, and they don’t know how to acquire customers, and have good funnels, and conversion metrics and all of that. I would usually advise startups to start investing in affiliate or partner programs a little bit further down the line when they have kind of acquisition machines already humming, and they know how long customers stay, how quickly they churn, who is an ideal customer, all of that. Would you agree with that, or do you think there’s exceptions to this rule where some startup should look into this much earlier?
Hiten Shah: I think you need some level of scale to really have a partner program itself. Otherwise, if you’re earlier and you think that partnerships can provide a channel to your customer and can really be a scalable channel, it’s not a bad idea to explore it earlier. But usually it’s sort of two way mutually beneficial partnerships tend to be ones where once the companies are at scale.
Steli Efti: Cool. Any other big mistake that you’ve seen with companies out there that try to launch or run or scale a partner program, or particularly good examples of massive success? Like if you want to do a partner program, go and check out this company, or do it this way. I’ve seen this work really, really well again and again and again.
Hiten Shah: I think this is one of those tactics, just like affiliates and things like that, where people quickly easily fail at doing it. And so I think the biggest difference is basically two things. One, having an application process, being deliberate about communicating with whoever fills out your application as to like what the next step is, if there is one, and if you don’t want to partner with them or you can’t, you actually communicate that as well. I see a lot of people just ignoring applications. I don’t think that’s a good idea. And then the second piece would be they don’t iterate it. They don’t actually learn and iterate the program as they get more and more people into it. That’s really about it.
Steli Efti: Awesome. All right. Well, check out the episode, as I mentioned earlier, about affiliate programs, episode 261. If you’re already rocking and rolling, and you get a lot of high quality inbound requests, and you’re thinking about a partner program, or if you’ve done this incredibly successfully in the last one or two years, reach out. I’d love to hear from you. We’re just launching this with Close. We’ve seen some early success, but we’d love to partner up with you or learn from you if you have something to teach, so you can always get in touch with us. Hnshah@gmail.com. Steli@close.com. This is it for us for this episode. We’ll hear you very soon.
Hiten Shah: Later.