Partnerships are one of the best (and underutilized) ways to scale your company for sustained growth. Once strong partnerships are forged, they’ll bring in ROI with minimal upkeep.
If you’re a SaaS company looking to scale, growing a partner ecosystem is an effective way to do so. But, you don’t have to be in scale mode to take advantage of strategic partnerships either. Companies of all sizes at all stages of growth can benefit from partner marketing.
What is a Strategic Partnership?
A strategic partnership involves two companies with similar buyers working together to increase sales and revenue. SaaS companies typically will engage in partner marketing with other SaaS companies or agencies who provide complimentary services to their product.
There are a few different levels of relationships partners can enter depending on their size and alignment:
Co-marketing partnerships require the lowest involvement from partners and are typically non-monetary. This type of relationship enables you to establish your credibility by associating your company with strong brands in the space through public social media interactions, co-branded, co-created content and content contributions.
While you typically wouldn’t offer a monetary incentive for co-marketing partners, you can encourage participation with non-monetary offers like lead sharing and backlinking. Co-marketing partnerships also provide a great foundation for further partnerships.
Affiliate marketing partnerships involve one business incentivizing another to independently drive traffic or conversions for them through a tracking URL. The incentive could be a flat fee, revenue share, or lead share depending on what the business is asking in return.
Companies that are already established as an authority in their industries have the ability to be highly successful with affiliate marketing due to the demand for association with their brand. Household names and companies known for their thought-leadership can capitalize on their base of brand evangelists with an effective affiliate program.
Conversely, smaller, lesser-known companies can build rapport with larger companies, form positive associations with respected brands and get rewarded for their efforts.
Similarly, an affiliate relationship can take place between a company and an industry influencer. In B2B industries, influencer marketing takes the form of a mutually beneficial marketing relationship, where two brands (or a brand and an individual/group) partner to promote awareness and generate leads. Instead of paying or asking consumers to promote a given brand, influencer marketing dictates reaching out to relevant figures within an industry to forge mutually beneficial, co-marketing relationships.
In a co-sell relationship, both companies involved still work together to refer each other leads or work deals. This requires effort from both sides. One company can refer a lead and register an opportunity, but the other has to work the opp to be involved in making the final sale.
This takes some of the work off of a company’s plate since they don’t have to source all of their opportunities alone, but they still maintain the ability to vet each sale before it’s made and keep control over which opportunities to invest time in.
A resell relationship is the holy grail of SaaS strategic partnerships. Unlike co-sell relationships, resell relationships offer the ability for a partner to sell your product independently, on your behalf, making a nearly frictionless process.
This type of partnership brings companies the most income for the least effort since other companies are doing all the work to drive revenue for them and they merely have to have a sales enablement plan in place for their partners.
Co-marketing and affiliate relationships with other SaaS companies open the door for integration work. Integrations can expand your target market and your product’s usability in addition to increasing your exposure to different markets. Additionally, integrations can lead to bundling your product with other SaaS products which leads to larger deal sizes.
Partnering with agencies enables you to have dedicated experts outside of your company working to service and upsell your product. Software only works if there’s someone to help work it, so partnerships with marketing agencies can provide additional product enablement for your customers in addition to increased sales and promotion for you.
For all types of partnerships, you need to make sure you are enabling your partners to sell or position your product properly.
From Startup to Enterprise, What Partnerships Look Like as Your Company Grows
As your company grows, the types of partnerships you can foster will change due to your change in brand equity and the ability to provide more value for your partners.
As you’re still establishing your authority in the space, it’s unlikely you’ll be able to convince other companies to resell or co-sell your product. Your product isn’t proven enough yet.
However, you can start nurturing partnerships that will hopefully grow into co-sell or resell relationships later on. Co-marketing can help you build rapport with companies while getting your name in front of new audiences, and engaging in affiliate programs can help you build goodwill that could be developed into a more formal monetary partnership down the line.
ConvertKit grew from $98k to $625k MRR by doing 150 webinars in one year, mostly with affiliates and partners. ConvertKit was early-stage and bootstrapped, so they had to stick to low-cost strategies, which made partner marketing a really viable option.
“Early on, you don’t need five marketing strategies. You won’t do any of them well. You need one growth strategy that works, and you need to do it over and over and over again until it stops working or until you’re big enough that you can hire a team to do multiple things.” — Darrell Vesterfelt
When you reach the scaleup stage, you’re trying to achieve massive growth and have become semi-established in your space.
One notable example of a SaaS company that leveraged a partner program to successfully scale their growth is HubSpot. By partnering with agencies whose solution or service complemented HubSpot and spoke to a similar customer base, HubSpot was able to create a sales channel worth well over 100 million.
Like HubSpot did, SaaS companies can take advantage of each other’s audience, credibility and social presence for mutual value and ultimately, driving sustained growth.
You can create an affiliate program for other companies to engage in in addition to continuing to be part of other affiliate programs and co-marketing relationships. Additionally, you can start to dabble in co-sell relationships with high-fit partners.
As you continue to grow and approach the enterprise stage, you can also start to roll out a resell program as well.
At this stage of growth, you’ll have a well-established brand and be an authority in your space. Other companies may even be coming to you asking to resell your product.
If you’re doing really well and have enough demand for your product that other companies are coming to you about forming a resell relationship, that’s a good indicator that you’re ready for one.
However, you shouldn’t neglect co-marketing efforts, especially with your resellers. Co-branding and co-marketing can help your partners better sell your product.
Regardless of what stage of growth you’re in, you should start with non-monetary relationships before proceeding to more legally binding ones. Partner relations can be tricky to navigate initially, so you want to start out more friendly and casual to see if both partners are good fits before progressing into something more formal or monetary.
If you enter into a lead share and it turns out to be a bad fit, you don’t lose that much. However, if you invest resources in forming a co-sell or resell relationship and then your partner doesn’t sell anything on your behalf, that’s not good.
How to Identify Good Partners For Your Company
When looking to form a strategic partnership, make sure both companies can benefit from the relationship. No one wants to enter into a partnership they can’t benefit from. If you aren’t benefiting from a partnership, then you lose out, and if your partner isn’t benefiting, it can damage your reputation and ability to develop new partnerships.
Your buyers should align with any company you partner with. The ultimate goal of a partnership is to gain more customers and revenue, but if sell to completely different people, that won’t happen.
Additionally, you should both have similar growth trajectories. If you’re both selling mid-market and looking to expand down-market, great. However, if you both currently sell mid-market, but your partner is planning to shift to only sell upmarket where your product isn’t viable, then that partnership will no longer benefit you.
You can check your alignment by doing account mapping. See how many of your customers overlap with your prospective partner’s customers. Additionally, check for similarities between your buyer personas and ideal customer profiles.
Finally, be open to working with a variety of partners. If someone wants to work with you, be polite, even if they’re not a perfect fit for reselling. If your buyers are aligned or overlap, you can benefit from a co-marketing relationship even if it’ll never develop into reselling.
Even seasoned SaaS companies that have been dominating the space for years can benefit from partnerships, and startups have even more to gain.
You can only do so much as one company. By creating a partner ecosystem, you’re enabling your company to generate revenue using the time and resources of others in a mutually beneficial way. Your reach can go way beyond your direct audience with the help of a strong partner ecosystem.
The more positive relationships you have in your industry the more enabled for success you’ll be. Strategic partnerships can help you generate demand for your product and drive revenue on your behalf with minimal effort from you.