While there are hundreds (if not thousands) of blogs online talking about scaling SaaS businesses through digital marketing and growth hacking, there is a serious lack of 'how-to's' when it comes to learning how to scale a SaaS business through a channel partner model.
Channel sales are often viewed as an older and more corporate way of selling, and therefore are not often seen in conjunction with SaaS go-to-market strategies. However a channel sales go-to-market strategy can be a critical success factor for achieving large scale growth, take for example the success of Xero and Hubspot. To make it even better, in addition to channel sales offering higher potential growth rates than direct sales, channel almost always proves to be more cost effective - resulting in a lower CAC overall.
There are several key factors that need to be taken into account in order to truly win a channel:
1. Offer real value
Before determining value, ensuring you choose the right channel is critical. Often SaaS businesses focus on finding a channel that should be willing to 'on-sell their products' and offer the partners a cut of the cash in return. These reseller models can work, but they can never really unlock the true potential of the channel.
The key to winning over the channel is by offering true value. I'm not talking about what your value your product can offer your channel partners customers, I'm asking what value your product offers to the channel partner themselves.
Take Xero for example - Xero won over the accountant channel not by selling them a product for their customers, but by offering accountants the tools to run their businesses in the cloud (which enabled them to be more efficient and make more profit). The hook was that in order for the accountant to get the full benefit of these tools, they needed to put all of their clients on a version of Xero (no matter how small).
In order to leverage this channel Xero had to make a real commitment to their channel partners with development teams focused on building the specific tools that accountants needed, in addition to developing Xero's core product.
2. Provide partners with the tools to succeed
Unfortunately you can't simply get your channel partners to sign a partner agreement, give them a login (and few special features) and hope for the best. You need to commit the time and resources to build the tools that your channel needs to really succeed.
Most of the time your channel partners have no idea how to pitch your product to their customers, or to key stakeholders within their own business. Providing your partners with marketing collateral (such as fact sheets, presentations or videos) to help them articulate the value of your product removes this barrier and allows the partner to start making traction.
In the same way that the customer on-boarding experience is critical for direct sales, providing your partners with support for implementation and conversion is critical for your product to penetrate their customer base. This support can come in multiple forms; dedicated support (partner success) staff, conversion guides and how to's, implementation tools (such as specific spreadsheets or technical tools to help partners implement clients faster or in bulk).
3. Educate your partners
Your partners are always going to short on time as their core focus is on their own business, that fact will never change. In order to get your channel to understand the value that you offer to their business (and the steps they need to follow to obtain that value) you need to educate them.
Partner education is one of the key underlying strategies for delivering a successful channel partner model. Your education path needs to include;
- Introductions to your product (value proposition)
- Getting started (what they need to do to start getting value)
- Implementation/conversion (call to action)
- Change management (their long term business strategy using your product)
- Product training (deep product understanding)
When educating a channel, you also have to be highly efficient with your time. Make sure every interaction with your channel follows a one-to-many approach. Educating via group events and webinars can be highly effective ways to get to many of your partners in a single session.
Once you have established a strong partner education framework, implementing an eLearning tool like Velpic allows you to provide your channel with on-demand training and drive exponential growth.
To sum up you need to treat your channel partners like highly valued customers, not as a sales branch. Providing your channel partners with the right value, support and education allows you to win over their hearts and minds and this is the pivotal point that will truly unlock the potential of your channel.
Amy Walker - Specialist in SaaS Strategy & Business Execution
I work with SaaS companies to develop their key strategies, and assist them to get the right tools in place to be able to execute seamlessly in market. I believe that the only thing preventing a great idea from scaling globally is a clear strategy supported by strong execution.