View AMA
Question
What are the first things you would recommend a partner manager do when building out a new program from zero to one?
Answer
Position your company where your customers are. If the majority of your customers are cloud adopters, get yourself in the marketplace for AWS, Azure, & GCP (I recommend tackle.io for getting listed quickly).
Focus on smaller boutique partners who provide a service that complements your technology offering. They will be more agile and will help you get critical feedback early on as to how your product plays with partners and how the structure of your partner program is received.
Wait to go after the bigger partners until you have enough revenue/logos to make them notice you.
Question
What are some common pitfalls to avoid for tech partnership programs?
Answer
FOCUS. Casting a wide net to see what sticks is a recipe for disaster. Go after a limited set of strategic tech partners whose tech is (1) complementary to yours (2) shares a similar buyer persona (3) technical integration is an option (4) creates a better together story that resellers would be compelled by to create a bundle / service offering to sell to their clients
Question
Do you track revenue coming from tech partners? How?
Answer
Yes, we track via deal reg for when their sellers have an opp that they want to work with us directly on and get paid a referral fee and we also have landing pages on our website that are branded per tech partner they can direct their customers to.
Question
What partner types do you recommend a partner program consist of? How do I segment my partners in my program?
Answer
Depends on your business. Any route to market that is indirect (so not the sales or marketing team reaching out directly to prospects) should be considered part of the partner program. At Drata we segment into three categories:
1. Channel - MSSP, VAR, GSI, referral
2. Technology Alliances - ISVs, CSPs
3. Audit Alliances - we are a compliance focused business
Question
What metrics should we be tying partner manager commissions to and why?
Answer
Depends on the category of partner they are managing. For resellers, MSSPs, and other solely revenue sourcing partnerships, the partner manager should have a new ACV quota no different that a sales rep as their success is determined based on revenue driven by a partner.
For technology alliances, it should be more MBO based as the majority of technology partnerships will be revenue impacting via co-marketing as opposed to true co-selling and revenue generating.
Question
I would like to understand how much (%) of your company revenue is generated by resellers. My definition of resellers is a third party company that contracts with the end-client, implements, and supports.
Answer
Every company has different metrics and growth objectives for their partner program. Our goal in year 1 of our partner program is for 10% of the net new ACV target for the company to be driven/sourced by partners. Any deal that only involves a partner for use as a transaction vehicle is not counted towards that goal. Moving forward, our growth goal is for BD's % contribution to the business to be 1.5x YoY. So this year 10%, next year 15%, and so on.
Question
What team leaders should be stakeholders in your partner program's strategy in order for the program to be successful?
Answer
BD is typically one of the most cross functional teams in the org. At a minimum, it requires alignment with marketing, sales, product, and customer success.
Question
Should we be comping our sales team on involvement in partner deals and if so how should we set this up?
Answer
The best way to get sales reps more involved with partners is to make it comp neutral for them.
Example - List price is $100. Partner gets 40% discount off list so $60 is what the company nets. Comp neutral would be the sales rep at your company getting quota attainment and commission on the $100, not $60.
I prefer an in the middle approach of splitting the difference as the customer is unlikely to pay list price if they had gone direct so the sales rep in this scenario gets comped on $80.
Question
I am trying to figure out how to structure payouts/commissions for partners that are doing some type of resell or participating in the contracting process.. what would you recommend as a general way to set this up?
Answer
If the partners sourced the deal and/or is running it, they should get a preferred / deal reg approved discount off of list pricing to enable them to sell to the customer themselves.
Example: List price is $100. Your average deal size today is $80 after discount. Give your partners 40% discount off list on deals they source / have deal reg approval on. Split the difference with your partners so they are making enough margin to (1) build a meaningful revenue stream for their overall business in partnering with you (2) partner reps have incentive to stay focused on you instead of wandering to a partner that nets them a much better margin.
For fulfillment deals where your company has run the deal without any partner involvement and the partner is only being added to the deal as a transaction vehicle, it is common place for your company to negotiate pricing with the customer and then send a quote for the agreed upon price with a 5% discount to the partner. Note that you can NOT dictate to the partner what they have to charge (price fixing) but you are realistically giving them far less discount to work off of to make any substantial margin.
If the partner is simply referring, common practice is to spiff the partner 10% commission on the backend.