The biggest mistakes companies make in the first year of their partner program journey

As part of my 0 to 1 series over the past month, I've covered the main steps in launching a SaaS partner program including:

1. When to start a partner program
2. Identifying your first partner
3. Developing your joint value proposition and partner pitch
4. Onboarding technology partners
5. Onboarding channel partners

I wanted to conclude the series with a list of the most common mistakes I've seen made in the first year of the partner journey in hopes that you can learn from them. The first year of partner program creation is exciting and intimidating with equal measure. It's also crucial to get right, for the work delivered in the first year lays the foundation for future success. With that said, here are some of the biggest mistakes companies make in rough order of importance:

1) Not spending enough time and resources helping your first partner win their first few deals. Momentum is a powerful thing in sales and a few early wins gives you those vital success stories which you can use internally to sell the value of the program and externally to highlight what a collaborative partner you are. Why are early wins so important? Several companies that have analyzed their own data on this topic found that if a partner doesn't have a win in the first few quarters of the partnership, they are much less likely to ever have a win and will ultimately churn as a result. Those first few co-selling opportunities are therefore crucial to your partner's long term success and so invest your time generously and enlist your best salespeople to support.

2) Not spending enough time on internal education and success promotion. Partnerships are as much about internal selling as they are about external selling, as you have to bring your entire organization (sales, success, marketing and product) with you on the journey. Remember, partnerships isn't a department but rather an organizational capability and mindset, requiring alignment and support across the business. For organizations that have rallied their whole business around this concept, ecosystem led growth has become their most successful go-to-market motion and I believe will be the differentiator in the years ahead.?

3) Trying to onboard too many partners too early in your partnering journey.? You need to view your first partner as a crucial opportunity to learn how to partner effectively and what partnerships means in the context of your business. "Go slow to go fast" is a perfect quote for partnerships where success tends to have a compounding effect over time. My experience suggests that companies who favor partner quality over quantity see more sustained success with their partnering efforts and are able to do so far more efficiently. There is no set rule for the right number of partners, which in my mind should be guided by customer value and driven by their requests. I've often heard mention of the 80/20 rule in partnering which states that 20% of the partners do about 80% of the business. I'd love to see more data on this, but if it’s true, it's most likely due to vendors either onboarding too many partners they don't have the capacity to enable or not being thoughtful enough about the joint value proposition of the partnership and signing the wrong partners. Either way, time has been wasted that could have been dedicated to a smaller group of more impactful partners.

4) Spending too much time chasing 'whale' partners. Just as chasing too many partners can be an issue, so too is chasing the wrong ones. In particular, many companies waste vital time and energy chasing big names (typically the large SIs) as opposed to partners who are more appropriate for their size and stage of growth and who have better alignment to their value prop and ideal customer. Nothing against Accenture, Deloitte or any of the other consulting and SI behemoths, but they are a real challenge for scale-ups to work with in any meaningful way and consume a lot of time. Keep in mind that mature software companies often have dozens of people looking after these relationships which took them a decade or more to develop. The temptation to go big will always be there, and at some point it will make sense, just be thoughtful about what it entails.

5) Spending too much time thinking about your partner classification system. This tends to sort itself out over time as you understand more about what you and your customers need from partners. The old metallurgic approach to partner classification (gold, silver, bronze, etc.) made sense in an era of prepackaged software where the reseller discount or rebate was tied to their certification level and sales performance. This approach doesn't align particularly well with the world of SaaS, which requires more bespoke programs geared to the type of product you have and the industry you are operating. My advice is to consider organising your partners by how they help your customer as opposed to the type of business they identify as. A big pet peeve of mine has always been the use of labels such as agency, reseller or solution provider, which doesn't tell me anything about what these partners can do for me as a customer. Instead, put your customer's hat on and start with the sentence, "I need help with..." and start making a list of their most common needs and how your current partners support those. The result is a classification system that's customer driven as opposed to partner driven.

There you have it, some of the most common mistakes made by companies in their first year. If you can avoid some of these traps you’ll be in a great place as you move into year two of the journey and start to scale your program. Good luck and get in touch if I can be of help.