Why won’t they partner with us?!
We have all been there. You’ve been around for some time. You have a great product. Say it’s Automated Accounting Software that handles every aspect of accounting for any type of business. You want to scale your business, and you know that your BD or sales team alone won’t cut it, especially since you’re looking at a new market in a different region. So what do you do? You search for “Top Business Solutions Resellers in New York.” It is a big market there, and who doesn’t need accounting help in New York? Even though there are well-known providers already in the market, your product is better, fresher, and maybe cheaper. You know it, and they for sure will know it.
You start sending the emails and submitting the “Let’s Go To Market Together” forms. Maybe you have some cash to spare and decide to attend “New York Tech Week” to meet potential partners where they usually go.
Then reality hits. You receive little to no response to your emails or form submissions. Maybe you managed to give a few demos, but the interest clearly wasn’t there. You ended up receiving a partnership form in the shape of a dreadful Excel sheet that needs you to fill in every little detail about your revenue, and it was clear to you that they wouldn’t partner at your current size. Those who shook hands with you at the event and said, “Yeah, I wanna connect you to our head of accounting solutions,” probably never connected you to anyone.
And you start to wonder: Why? Can’t these people see how good our product is?!
The answer is that they probably do see how good it is, but that is not all there is to it.
What do these partners actually want?
What does anyone who starts a business want? Success, change and all that aside. Yes, money. And channel partners (resellers, distributors, MSPs, etc.) are no different. They ultimately want to make money out of the products they sell. And before you start shouting that your product is so good that anyone can make money out of it, remember that they can make money out of other products too. And sometimes it is easier to sell those products than yours.
A partnership must have balanced benefits and effort between both partners.
That is the essence of any partnership, whatever kind of partnership it is. I would even dare say it is the same in personal relationships: we are expected to give as much as we get. And no party should be putting in more efforts than they receive in benefits.
Take a moment and think about why you thought you needed partners in the first place.
Entering a new market and establishing recurring revenue streams (Benefit) without having to do most of the work yourself: Hiring salespeople in the market, marketing, outbound reach, etc. (Effort)
The hard challenge of competing against other local competitors in the target region that have better access (and relations) to regional customers (Effort).
Access to the partner’s already established customer base and use of the partner’s expertise in enhancing your product (Benefit)
And a whole list of other reasons I’m sure.
Now let’s put ourselves in the partner’s shoes and imagine that they are thinking about partnering with the new (at least new to their market) accounting-automation product:
The product has no established customer base that can be utilized as a reference, so our sales team has to put effort into convincing customers of its use case (Effort).
Some customers may be interested in this new technology (Benefit, but not a big one).
The provider’s small revenue could mean that they are unable to make a profit and won’t be around for long, so investing time and effort in them can be risky.
Since the brand is still unknown to our customers, we probably have to invest in marketing and presales (Effort).
No local partner personnel means we are required to handle customer meetings and support alone (Major Effort).
Now, when you look at it like that, you start to understand why it seems so hard to partner with channel partners. You can see that, just like you, they weigh their pros and cons. And most of these companies have gotten pretty good at weighing. They are also not easily impressed by good products.
This is the reason most big distribution companies put such an emphasis on revenue threshold. A certain level of revenue means that the company has already found their product-market fit, established sales processes, and customers know of their brand (basically one of the big fish).
Also, customers know big providers by name, and often request their products. Bigger companies are more equipped to handle the high demand that a big distributor can generate, and they have enough personnel to support them. And it is not just that the brand is well known, but big vendors also tend to spend a lot of money on co-marketing and what’s called partner activation. They have partner portals ready. They sponsor events, or hold events and invite all their partners. That is a whole lot of benefits for whatever effort the channel partner will put in.
But does this mean we don’t get to partner with anyone?
The right partner for you
We often spend most of our partner search figuring out which is the right partner for us. But it is as important to figure out which type of partner you are the right vendor for.
Everything we mentioned above almost always applies to big channel companies. But there is another tier of smaller channel companies that actually struggle when working with big providers/vendors. They are usually regional. They also don’t get the same attention the channel companies get (because they don’t generate the same level of revenue for the provider). They find that dealing with big vendors offers them little to no flexibility in designing their portfolio, due to these products’ high costs.
And other than the possibility of being sidelined by big providers, these partners will look for products like yours for many reasons.
They could be really interested in the technology you offer, and want to try and capture the market (or at least a few deals) with you.
They see that your product is something that they could build their portfolio around.
They are in the market to close just one deal and your product covers the requested features perfectly.
Sometimes this type of partner would partner with you just because they liked you as a person and trusted your vision. And that tells you why these partnerships are usually better for companies trying to reach a market or aiming for growth. The professional relationships and the genuine feedback carry immense value.
Where do I find these partners?!
Not going to lie to you, but finding these kinds of small channel companies is not an easy job. If you search, you will most likely stumble on the big names that have gathered enough attention for them to appear in your search results. Most of the smaller companies don’t spend that much (or, to be frank, any) money on marketing. So they have very little visibility.
But you can have them find you instead.
That example earlier about spending some cash (only if you have it!) to exhibit at an event can be a great way to expose your company to them. They might not exhibit (again, they don’t spend on marketing), but they will be walking around visiting most booths trying to find the next partner, or looking for interesting technologies.
If you can’t afford events, just doing a good job with marketing will help these companies discover you. If your brand is consistent and your positioning is clear, these partners will be able to know that you’re the right fit for them when they come across anything you share. Make it easy for them to quickly capture who you are and why you’re the right partner for them.
It helps if you make it known that you’re looking for partners and have a page dedicated to partnership requests. Remember these companies are looking for a good business relationship more than anything else.
Also, if you happen to get interest from a potential customer in another market and it seems like the deal will go through, it doesn’t hurt to ask whether they prefer to work through a channel partner.
I know it sounds strange to need a partner for a deal you have already brought in, but remember, it is not about that one deal. It is about finding a partner who has already seen that customers in their market need your product and may be more willing to promote it to other customers.
Oh, partner, my partner
That being said, you don’t have to focus only on small channel partners or refuse the chance of working with big channel partners. You can still manage to partner with big channel companies, especially if your technology is part of a trend that everyone wants to capture.
Understanding your selling power and your product positioning will help you communicate clearly with partners what benefit they will gain from working with you.
But partnerships don’t end at the contract or the first deal together. A good partnership is like an ongoing process. And you can definitely offer value to a partner, but it is important to know which type of partner that is.
