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The Path to SaaS Channel Readiness: Scaling the Partnerships Pyramid (Part One)

As SaaS businesses increasingly realize the limits of trying to scale their business through direct sales alone, they’re learning important lessons: There are limits to how much you can grow your go-to-market teams because of the costs involved—and limits to how man.. Continue

The Path to SaaS Channel Readiness
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Growth & Best Practices

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Written by
Bryn Jones

As SaaS businesses increasingly realize the limits of trying to scale their business through direct sales alone, they’re learning important lessons: There are limits to how much you can grow your go-to-market teams because of the costs involved—and limits to how many potential customers those teams can actually reach, no matter how big they are.

Today, more business buyers are looking to indirect channels like review sites, marketplaces, agencies and resellers to decide what software to buy. That's why the fastest growing software companies are driving more revenue through indirect channels by working with third-party partners that market and sell their product to significantly more customers (and often larger customers) than they could reach alone.

While launching a partner program isn’t that difficult on its own (especially if you use the right tools), becoming fully channel ready—or ready to give channel partners the ability to sell and support your product entirely by themselves—requires some additional work.

That’s why we at PartnerStack have partnered with Ingram Micro Cloud to launch Pinnacle, a program designed to help SaaS companies at every stage of growth prepare to sell through the Ingram Micro Cloud Marketplace, home to 200,000+ resellers specialized in selling SaaS. And once you’re ready to sell through Ingram Micro Cloud Marketplace, you’ll also be ready to sell through any indirect channel.

Becoming channel ready requires readiness across five areas of your software business:

 

Business readiness

  • Are company executives committed and actively involved?
  • Has the company allocated headcount and budget to partnerships?

Product readiness

  • Does your pricing and licensing model align with partner expectations?
  • Can partners independently sell your product and access support?

Sales readiness

  • Have you identified and documented your target market and customer persona(s)?
  • Do you have resources like videos, scripts and competitive documentation?

Marketing readiness

  • Do you have success stories or case studies of existing partners to showcase?
  • Can you provide partners with co-brandable marketing content?

Operations readiness

  • Will partners have dedicated marketing, sales and success support from your team?
  • Do partners have access to their own sales and configuration tools?

If you’ve never worked with partners before or are just getting started, there’s a good chance your answer to most of these questions will be no, and that’s OK. The truth is it takes some time to become fully channel-ready — but that doesn’t mean you have to wait to start driving revenue with your partnerships.

We’ve worked with hundreds of SaaS companies to launch and scale their partner programs through our all-in-one partnerships platform. The approach showing the most consistent success in the companies we work with is to start with partner programs focused on driving traffic and leads before building reseller programs that allow channel partners to sell your product themselves. We call this method of scaling channel revenue up from one partner program to the next the partnerships pyramid.

 

Piramid

 

Within the partnerships pyramid, we classify partner programs into one of three categories based on how partners drive business for the software vendors they work with:

  • Affiliate partner programs – partners drive traffic to your properties through tracked links, earning a cut when that traffic converts
     
  • Referral partner programs – partners send qualified leads to the vendor to close and support the customer (may sometimes involve co-selling)
  • Reseller partner programs – partners sell on behalf of the vendor (e.g., registers the deal, creates the account and sets up the end customer on behalf of the vendor)

Why steer business from affiliate > referral > reseller

The best approach for most SaaS companies that want to sell through the channel is to start with affiliate partners, scale up into referral partners, and finally, launch their reseller partner program.

Affiliate programs tend to draw in the largest number of partners but require the least amount of investment to succeed (relatively speaking — they still require investment). As the complexity of the partner relationship increases from affiliate partners up to resellers, the average deal size increases together with the partners’ need for more detailed enablement material. Bigger deals, typically handled by resellers, require more enablement and support—which requires more time and resources to develop well.

 

Partner type

# of partners

Average deal size

Resources required

Marketing Partners

High

Low

Some

Referral Partners

Medium

Medium

More

Reseller Partners

Low

High

A lot more

 

Through the Pinnacle program, we work with SaaS companies to build their pathway to reseller partnerships by starting with launching affiliate and referral programs first, so that they can:

 

See partnerships achieve revenue faster

From inception to launch, you can build an effective affiliate program in less than two months—we’ve even helped some companies (like Maropost) do it in as little as three weeks. But launching on sophisticated reseller channels like Ingram Micro Cloud requires dedicating significant time and resources, with typical timelines sitting closer to 12 to 18 months. Simply put, affiliate and referral programs are the fastest way to start seeing revenue from partnerships while helping you build the foundation to scale up into the reseller channel.

 

Learn and iterate more

You can see success with affiliate partners as long as you have some quality resources from them to work with. By contrast, referral and especially reseller partners require far more enablement and resources, often requiring new features built into your product itself.

By starting your partnerships strategy with a focus on affiliate partners and their needs, you’re giving yourself the opportunity to launch a program without the perfect Ideal Partner Profile (IPP), Ideal Customer Profile (ICP), enablement and support while still being able to realize success through traffic, new partners and revenue.

 

Build the right foundation for resellers

Starting with the least complex program type, such as an affiliate program, forces you to focus on setting up the right infrastructure, integrations, and payout processes that will serve as the foundation of your overall channel strategy. This will also allow you to collect insights from the program and its initial partners that will be useful for refining the personas, enablement and support that will be needed when setting up more complex referral and reseller programs.

Framing the development of your channel strategy as concrete and iterative steps allows you to clearly map that progress. Once you can answer “Am I able to recruit, enable, support and realize recurring revenue from this type of partner?” with a confident “Yes!” you’re ready to scale up into your next, more complex program — provided you can dedicate the right resources to it.

 

Want to fast track your path to selling on Ingram Cloud Marketplace?

In the next part of this series, we’ll dig into how you can start driving revenue through affiliate partners and how your affiliate program can lay the foundation for your company’s partnerships future. At that point, you’ll have a complete roadmap to channel readiness that will prepare you to sell through large channel marketplaces including Ingram Micro Cloud.

 

If you’d like to get started sooner, register for Pinnacle, a program designed by Ingram Micro Cloud and PartnerStack to help you scale the partnerships pyramid while quickly driving revenue for your SaaS business.