Have you ever used Amazon Alexa to play Spotify’s music or Grammarly to autocorrect your typos in Gmail?
If you've answered “yes” you are familiar with SaaS tech partnerships. Businesses in today's API economy are aggressively pursuing the 'two heads are better than one' strategy to expand their market presence.
Working as RevOps entails constantly looking for levers you can pull to drive top-line revenue growth for your company. With that being your north star, one of the high-impact avenues that’s worth exploring is technology partnerships.
What are Technology Partnerships?
A quick refresher: Technology partnerships help companies optimize their product offerings. Tech firms partner with potential peer companies where they can either sell their product collectively as bundles or through apps, integrated solutions and add-ons to provide their users with a more valuable product experience.
There are various kinds of technology partnerships. Since these partnerships are often long-term, they often change over time. For example, what starts as a technology partnership can also become a marketing, channel or strategic partnership in the future. So, even the shortest technology partnership has the capability to transition into something completely different, for the time and resources to lead to positive ROI.
Strong tech partnerships are built and nurtured with purpose by experienced professionals. They require thoughtful decision-making, time, money, trust, and a clear understanding of customer needs.
Below are a few examples of good tech partnerships,
- Google Cloud and Splunk’s strategic partnership to help customers gain deeper insights from data.
- Amazon and Microsoft partnership helps in bringing the Amazon Appstore to Windows customers.
- Atlassian and Slack partnership makes it easier for joint customers to use the tools together, allowing teams to move work forward faster.
Now that you have a fair idea on what defines technology partnerships. Let’s deep dive into the benefit of the synergy it creates.
How Does Technology Partnerships Impact Your Revenue Growth?
Consider this example, say your GTM goal is to achieve 60% YoY that is broken down into sub-goals as:
- Improving customer retention by 30%
- Improving conversion rates by 50%
- Growing top-of-the-funnel by 2x in a specific geography or vertical
- Reducing the sales cycle by 20%
If you’re thinking about a shortcut to fast track your company’s success towards these goals, one of the ways would be to establish meaningful technology partnerships.
How so? As such partnerships facilitate upscaling opportunities, they present your company to new customer bases. This enables you to generate demand for your product and accelerate revenue growth using the time and resources of partners in a mutually beneficial way.
Also, with the increasing adoption of well-integrated products, organizations have seen a huge dip in the shortening of the sales cycle, customer acquisition cost (CAC), and churn.
As you know, the power of tech partnerships lies within the multiple advantages it offers. But how do you get a hold of them to make the best out of tech partner programs?
Scroll down to read some of the rare insights that I’ve picked up during my conversation with Adith who used to head RevOps for partnerships at Freshworks for close to 4.5 years.
How to Steer Your Technology Partnership Engine Towards Growth?
Your tech partnerships end up being successful when everyone involved in it has clarity over their goals, contributions and leeway for expansions. However, it is tricky for siloed teams to reach this total awareness state.
And, many organizations struggle with identifying and taking the measures that enable partnerships to live up to their full potential. So, as RevOps, how do you stay on top of the game with tech partnerships?
We’ve found a way to solve it and so will you as we walk you through the thought process to follow while building your tech partnership engine.
Top Five Ingredients to Driving Successful Technology Partnerships
1. Having a Systematized Collaboration Method
Get your new ally (technology partner) walk you through their collaboration process, and ask them to provide you with real scenarios (case studies) of how they’ve successfully partnered with other businesses. You can have this as an engaging session during the partner onboarding process.
Discuss and establish a communication process that works well with both organizations. Learn each other’s working styles and where the skill and resource gaps are. Based on this information, you can determine the best allocation of project resources, and create repeatable processes that will apply across all projects and partnerships.
Avoid dwelling upon partner strategy before aligning with your partners’ working style—not just what they will do but how they engage, make decisions, allocate resources, share information etc.
Moreover, mediocre business strategy or vague contracts have rarely been a part of partnership deal breakers. As people involved in failed alliances point out—miscommunication, breakdowns in trust and the inability to resolve disagreements are the most common causes.
In order to avoid dealing with such situations, you’d have to align teams on both sides beforehand. So, it’s imperative to set up a method for collaboration before moving on to strategic projects and to shun friction during the course.
"If you're looking to establish a successful partnership, you have to make sure that you're setting it up for success. There are 2 key points there. Firstly, get the executive alignment on the partner strategy early on and the respective stakeholders on board. And then, make sure you involve as many departments as possible. Approaching partner strategy with a cross-departmental perspective is essential to remove potential future roadblocks.
Secondly, its all about establishing the right processes and initiatives. So, by being proactive on that, you could eliminate collaboration challenges and focus on your activation and GTM plan”
2. Having a Strong Privacy Program
In all aspects, it’s best that you refrain from exhibiting an open data sharing policy during the initial stages of your tech partnership. It could make it hard for you to see if the chosen partner would adhere to your privacy protocols in the first place.
You could let the trust within your partnership build over time. And, double-down on creating a sense of integrity before signing a legal agreement. In this way, you can make partner contracts feel more human.
As Operations, you’d have to ensure that the volume and type of data sharing with the partner is agreed upon by your top management and not by individual stakeholders. You can provide joint data access for third parties without exposing all aspects of it. Also, having a solid privacy program tailor-made for tech partnership can help you address security concerns.
3. Having a Solid Knowledge Base
Every partnership deal depends on product acumen to fulfill its promise of increasing revenue.Hence, setting up a process to equip your partners with the right information must be your utmost priority. This is where RevOps come into play.
You’d have to help them understand the ins and outs of your product by conducting training sessions, providing customized collaterals, scheduling demo calls with customer-facing teams etc. Only then will they be able to sell it in the way you are envisioning.
As RevOps, you’d also need to implement and maintain a common intelligence platform that provides real-time updates w.r.t product messaging and positioning, competitor data, etc. You’ll also have to ensure secure access to these resources by your internal and partner sales teams. You can also host regular check-in meetings with your teams to get feedback about their utilization of the knowledge base.
4. Having the Right Mindset
#1 Focus on Product before Revenue
When you’re launching an integration marketplace, give it 6-9 months where you are focusing on the number of apps and influencing revenue. Then, shift to driving hard revenue and selling solutions together.
Note that open marketplaces always win in the long run. If you’re going to charge a revenue share on the integrations and extensions on your marketplace, 80% for your partner and 20% for you would be a good place to start. You can also adjust the % as you get more traction.
On the other hand, integration marketplaces can also take a long time to pay off and if you start out too aggressive with fees and rev shares, you will get demotivated. So, take the product-first approach—set the foundation and the value will come through.
#2 Focus on Co-marketing before Selling
Co-marketing initiatives amplify brand awareness that in turn aids in organic lead generation.
Depending on the partner size and rapport you can choose to engage with them. In these cases, both entities co-create a piece of content or product, and mutually share the benefits out of its promotion. In doing so, you can also track your joint campaigns, whether they are events, co-sponsorships, using your customers to sell, webinars, or customer success selling.
Nevertheless, ensure to attribute deals that come through the marketing funnel to partnerships; otherwise, these deals will be misattributed to marketing efforts. You also need custom data entered in the CRM so that it is properly connected to your partner tech and attributed across the organization. This is primal to verify the lead source.
“I believe tech partnerships or ecosystem led growth is the next big frontier in SaaS. CAC in traditional GTM channels has been increasing steadily. With tech partnerships, once you align with right partners (a deeper solution for the customer), you can go after the right customers through co marketing and co selling initiatives to double your leads at half of the cost!
But keep in mind that tech partnerships is a two-way street. You need to invest in marketing initiatives, sales teams have to work with customer success teams to introduce partners between each other's customer bases and partner teams should onboard, enable and train partner GTM teams to ensure mutual success. It is also extremely important that you align the incentives of your sales, marketing, customer success and partner teams to drive growth through tech partnerships."
#3 Focus on Selling with the Right Set of Incentives
Your partners act as your extended sales team—they bundle and pitch your products. But how you engage your internal sales team in those deals is crucial. Aligning your entire sales team is paramount to preventing partner conflicts.
You could start off with designing compensation plans that incentivize your sales folks for recommending partner products. You can also try a dual-incentive strategy. In this case, your sales team earns extra bonuses on top of their commissions by bringing more sales opportunities to a partner.
When both sales teams have a stake in a deal, it becomes clear that they are chasing the same goal together. This will aid in building an inter-team camaraderie and encourage teams to work on closing deals together.
5. Having Effective Metrics to Track Success
For you to know the influence of your partner integrations, begin with analyzing your product usage dashboard. In this way, you'd be able to Identify which of your customers use your partner bundles and who hasn’t.
"Integrations ultimately help in strengthening customer retention and benefits the company by increasing productivity, depth and breadth of product usage, thereby improving distribution and visibility. So, account size, segment, speed of adoption and churn rates act as the key metrics to measure partnership success.
Setting up BI reporting could help in tracking these metrics for accounts that have an integration turned on versus accounts that do not. You can use this data to make decisions on prioritizing or deprioritizing certain integrations on your roadmap."
Now, track metrics such as churn, retention or expansion for customers using integrated products. And, use these results to measure the respective partner’s efficacy. In some cases, you can also conduct a root cause analysis to understand your tech ecosystem's impact on customer churn in detail.
Having derived insights from the customer data, try to map the values against your industry statistics. Usually, the product adoption and retention rates are higher if your customers are satisfied with the experience of integrated solutions.
If not, it's a clear sign that you’d have to revisit your partner bundles.
In a Nutshell
If done right, technology partnerships can help your company grow into your dream business. You can add products, tools, support, revenue, and get exposure to new prospects and markets.
But for it to work, you need to nurture those relationships in a way that feels right for you and your team. So do your research and talk to your people. Prepare your deck and hit the road.
Acknowledgements: Thanks to Samra Taban for editing the blog and Alfred Christopher for the designs.