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B2B Agility with Greg Kihlström™: MarTech, E-Commerce, & Customer Success
#74: Maximizing the value of your partnerships with Peter Fogelsanger
00:29:21
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- [00:00]
A
Are most of your channel partners producing very little value for your business? Agility requires more than just signing up partners. It demands a dynamic approach to activating and enabling the right ones. It's about ruthlessly prioritizing relationships that generate mutual value and being nimble enough to change or sunset those that don't. The Agile Brand.
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B
Welcome to the B2B Agility Podcast where we look at the factors that drive success in B2B marketing, with a focus on the people, processes, data and platforms that make B2B brands stand out and thrive in a competitive marketplace. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, marketing operations and CX, best selling author and speaker. Now let's get on to the show.
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A
Today we're going to talk about the often unspoken reality of partner programs, the vast gap between the impressive number of logos on a partner page and the handful that actually contribute to the bottom line. We're going to explore why so many partners become paper partners, partners in name only, and how to build a program that focuses on tangible value and repeatable revenue, not just vanity metrics. Tell me Discuss this topic I'd like to welcome Peter Fogelsanger, Fractional Partner Executive at Peter Fogg llc. Peter, welcome to the show.
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C
Thanks Greg. I'm really excited to be here and talk about this with you.
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A
Absolutely. Yeah, always. Always great to talk with you. I'm glad we get to record this one. So looking forward to sharing this. Before we dive in though, why don't you give a little background on yourself and your role at Peter Fogg llc.
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C
Okay. Started in tech long time ago as a developer in the mid-80s. Worked for the Air Force and then NASA as a software developer and transitioned that direct sales career. And a large portion of my direct sales I was on the partner side of 12 years in boutique agencies and then transitioned back to software and spent about eight years in enterprise software. And tail end of that part of my career is where you and I met when I was at a company called sitecore. For those of you who don't know enterprise cms and a lot of what I've learned about partnerships I learned there. Even though I was a direct sales director in 2010 when I started there, they were building what we now would call a partner led growth strategy before anybody was talking about that and I was really forced to learn how to make that work. I usually tell people the first couple of years I was at Sitecore it was 100% commission role and we were expected to drive at least half of our pipeline and revenue from partners. So you had to figure out how to do the things we're going to talk about today or you didn't feed your family. Yeah, so I took that, that experience and for the last, I guess about 10 years I've been working with early stage companies to leverage that experience into building partner programs and enablement programs. And now I'm doing it full time as a consultant.
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A
Great, great. Yeah, so let's dive in and yeah, definitely been, been a while since the, the, the days. Sitecore days when we met. So yeah, looking, looking forward to kind of, kind of take, taking people a little bit along the journey here. And I want to start at the beginning, which is, you know, often where things can go wrong. And you know, from your perspective in this partner, you know, partner strategy and partner approach, what are, what are the top maybe one or two strategic mistakes that companies can make when they first set up partner collaboration and the pre sales processes?
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C
Yeah, that's a really good place to start. And it's odd that I see the same two mistakes, at least in my opinion, their mistakes made all the time. First is that many founders or heads of GTM sales will treat partner program and the team as something separate. And often they'll even call it channel. And in today's market, channel would work fine. That kind of mindset will work fine for a commoditized product or service, but in complex ecosystems of software and services, having it be a separate thing and when you call it a channel, that implies that it's separate, that's a mistake. And I think it needs to be part of the holistic go to market strategy to be successful. And that mindset leads to the second mistake I see made a lot which is treated tactically, it's not treated strategically. And so to do partners, quote, unquote, they'll transfer someone in house, you know, maybe a salesperson, say hey, go figure this out. Or they may even hire somebody who's been a partner manager and say go, you know, go build us a partner program. And yeah, that's a, that's a low investment, but it's, it's a high probability for failure because you're asking somebody who maybe has never flown a plane before to design the plane and fly it at the same time. And they, they can't design the strategy, lead the strategy, design all the processes, do all the internal collaboration cross functionally while they're also full time executing. They don't have the experience or the bandwidth to do all those things. And you're just if that's the approach you're taking, you're setting yourself up to have a failed partner program.
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A
Yeah, yeah. And so you know, for, for some of those, those earlier stage companies or even just you know, business units trying to scale, I think that as you're, as you're saying the, the goal and kind of the expectation is this repeatable revenue engine like o okay, let's build a partner program. And you know if you build it they will come kind of, kind of mentality almost. But in reality I've been on the other side of that too of I bet I'm a partner of like 20 places that I forget right now. You know, again, the fact that I can't rattle all of them off right now means you know what, what's what it's probably not driving anybody any, any revenue either. So like what are the, what are the core principles that you would advise these you know, early stage companies or just any business units really trying to scale to really build the, the program from day one to ensure that it's, it's actually predictable growth, not just kind of ad hoc wins or you know, some of those paper partner type things.
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C
Yeah, I think it really starts with it being a strategic initiative and the more tightly you can integrate it into your entire business so that it's part of the processes and more importantly part of the culture. If you make an ecosystem or partner led strategy part of your overall go to market strategy aligned with not just sales but customer success, product roadmap and all of those processes, everything you do as an organization then starts feeding, fueling and benefiting from those relationships versus the tactical channel mindset is catcher smit. Where's my leads? You've not given them any incentive or full trip, round trip reason to be bringing their customers to you. But if you have it integrated into your whole GTM strategy now, things you're doing in marketing benefit them. Things you're doing with your product, you listen to them, you feed them the way you're doing customer success, especially in SaaS, customer success can be a gold mine of deal flow for your partners. And if you haven't thought about how do you integrate the partner program into your overall strategy, including customer success, that's just a huge lost opportunity. And I think at the end of the day, the way I talk about all of those difficult concepts or big concepts is to think about what partnerships really means. If you look it up in Wikipedia or whatever it's with a capital piece, it's a agreement between two parties to Cooperate to advance their interests together. And vast majority of partner programs that I've run into in tech are very one directional. It's ISV asking another ISV to send them leads or an ISV asking service providers to bring your customers to us and where's the cooperation? And you know, CFO or some head of sales might say, well, we're given a referral fee. Most organizations on the other side of a partnership really don't care about a referral fee that much. They care about growing their business and making their business more sustainable. And a 10 or 15 or 20% referral fee on a single license isn't going to move the needle for them.
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A
Yeah, yeah, I mean, I know that firsthand. I mean, you know, back in my, my agency days, you know, I will say for, for what I was saying about being inactive with some. We, a very significant amount of our revenue came from two really good partnerships that we had. And you know, I, I would almost probably say 80%, 75% really came through those channels. But to your point, I also know it takes two parties. I was actively involved and, and so were they. And, and that also kind of, you know, that shifts with having a great contact on the other side and, and so on and so forth.
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And I bet. Was it RO fee that was motivating that, that growth?
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A
No, no, it was literally driving, you know, hundreds of thousands of millions of dollars into, of revenue into my company. That was. And, and yeah, the, it was nice to have the icing on the cake, you know, a few thousand dollars here or there. But, but yeah, it was really, to your point, tangibly, you know, growing the business and building long term customer relationships on, you know, on, on my end as well. And then you know, from, but like I said as well, there were other partnerships where. Okay, sounds good. Let me, let's, let's check this out. And then I'm one of those, you know, on that end I'm one of those paper partners. And you know, so to flip it back to the, you know, to the platforms, I can't, you know, I imagine there's plenty of those paper partners out there that are inactive. You know, what, what's a, what do you do with that? You know, what's a, what's a first step to you know, first of all even figure out, okay, these, maybe they were active, now they're not. Or maybe they were always inactive. You know, how do you diagnose and, and start turning around kind of this inactivity?
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C
Yeah, it's a massively common problem. It's almost embarrassing that our tech industry that this is such a big problem because there's other industries that have figured out how to do partnerships and they're very rarely another outside of tech. Do you have paper partnerships that haven't performed? And I think in tech the diagnosis has to start with an internal inward look. And some of the things we talked about earlier, you know, does the organization have a clear strategy that produced paper partners or did you just have some loose goals that you're trying to execute on? Did you have clear definitions vetted with some early wins of what your ideal partner profile is when you're starting a partner program? You might have some hypotheses of what a partner, a good partner is, but you probably haven't written it down and you're probably guessing. So that's often very informal. And usually when you're building a program, the first KPI everybody pays attention to is recruiting. And so you have a couple of people that get happy feet and gets an interested party who's like, yeah, I'll sign a partner agreement. And then you have all these partner agreements. And then like, well now what? They do that recruiting and they do it through this invalid mindset of we got to onboard partners. Onboarding isn't a bad thing. But I think onboarding in most organization again is one directional. It's I've got them to sign an agreement, I need to get them trained on our product and then magic things will happen. And that just, it just doesn't work that way. And you know, some listeners might think, well, you're kind of splitting hairs and you're talking about onboarding versus activating a partner in it. But it really are two very different things. In my experience, to activate a partner is a mindset and a process and approach that it's hyper focused on that first outcome, which is a deal. If you're doing onboarding and partner enablement after signing an agreement and there isn't a deal, then it's a waste of time. The two parties are investing in some academic hope that if I tell you how cool my product is and you tell us how great your services are, then we're going to build pipeline together. And it just doesn't work that way because partnerships have to start with trust and trust doesn't come from an academic theoretical, I understand your product, you understand my service just doesn't work that way. But if you do it, if you activate and focus, we're going to invest our time when and through that first deal, then it becomes Real. That's when you can build relevant knowledge about each other. And the trust that's going to drive scale.
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A
Yeah, yeah, well. And that takes time and focus enough. I mean, you know, if you're a very large company, you can do that with several partners at a time, of course, but it's still, it's less about to what you're saying. It's less about the volume. The numbers game of let's just onboard a bunch of partners, make sure they have access to the knowledge base or whatever and maybe hope for the best is not actually said, but it seems like the, the guiding philosophy in that, in that case. Versus and again, I can, I can say this from firsthand experience because I've seen it both ways. When, when it's been done well, there was a deal, you know, whether I was bringing it to the table or, or the, the platform was bringing it, there was something real and tangible and we learned something about each other in the process. Versus Right. I've also been on those, those things where, you know, you swap the, the, the presentation decks or whatever of like, I'm great, you're great. Wouldn't it be great if we want a deal together? But it's, you know, to your point, all, all academic. So that's, yeah, it's, it's tough. And I also can, you know, I can appreciate that there must be pressure internally to get numbers up because, you know, sales, you know, the. It's a numbers game is a phrase that's, that's thrown around a lot. And, and yes, but you know, it's, it's, it's also about quality. Right.
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C
Well, and I, and I don't disagree that it is a numbers game and I also wouldn't disagree that you need to have an active recruiting cadence, but I think it's a lot like, there's a lot of parallels between partner recruiting and outbound marketing. You need a broad top of funnel and you need a qualification process. In my opinion and experience, the qualification process for partners is get them interested in, and look for the first deal. And if the first deal isn't there, that doesn't mean you disqualify them. It means you nurture them just like you would nurture a lead. But your partner team needs to have the maturity to say they fit our ideal partner profile. They're interested, but there's no deal on the horizon. So let's pause the active and let's nurture them along. In, in your case, I would have said, Greg, let's. We have a great Potential partnership here. You're interested in my product, I'm interested in your service. Let's not invest any more time until your portfolio surfaces. Prospective project. And that might be a month from now, it might be 12 months from now. But we're, we're protecting both parties from investing prematurely. And from your point of view, you're going to great. I've got a very limited BP budget and from my point of view, I'm not going to be spending my cycles trying to onboard your team without a project there. But we're going to maintain the relationship. We're going to build a relationship. We want to partner, but we're going to wait till we get that. So you're still building the top of that funnel. There'll be a lot of Greg's at the top of my funnel.
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Right.
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But the middle part of the funnel will be those that the timing is right. And I think a lot of people, when they think about partners don't realize the timing of when deals happen is a big part of the variable of what activates a partner. Like just because we want to partner, we exchanged everything, maybe even trained your team and everybody's really, really excited. I can't give you a deal because you've not done anything before and if you don't have something in your portfolio that's a fit, it's going to stall. It just, it has to.
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Yeah, yeah. So, and then I want to go back to something else that you said which is, you know, that distinction between onboarding and activation and you know, to totally, totally makes sense there. Let's talk a little bit more about activation and maybe a little bit beyond that, which is, you know, you know, you've got, you've got that first, second, maybe even third deal. But then sustained success requires something. I don't know if. Is it different? Is it just more of the, you know, what, what does that look like to really achieve a great partner in the, in the longer term?
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Yeah. I kind of have this mental model for activation and enablement as an onion and you're just peeling layers, continuously peeling layers. And when you're in that onboarding and initial activation phase, what I need to provide you is enough knowledge about our product and our go to market strategy that you get and you can evaluate how it fits with your business. Is it going to help me grow? Do I have something in my portfolio? But I don't need to teach you how to, how to use it. I don't need to teach you how to handle every single objection that a Prospect. I just recently get you excited that there's a potential here and then when that first deal happens, then you peel the young in a little bit further. I need to start doing, just in time, enablement for the staff that's going to bid and hopefully do that project.
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Yeah.
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And so the way I like to structure all of the formality around enablement is, is very much a gamified set of layers. And I usually talk to leaders and entrepreneurs to make sure that they are clear in their mind that there's no such thing as a fully enabled partner. Yeah, it's, it's impossible because especially when you're talking about an ISV and a service provider. But even between two ISVs, the people change. One side of the equation is always going to be changing. So there's always going to be enablement needed for the new people. So your enablement program has to factor that in. But projects change as well. So we might do the first deal together and it's really simple where it's in a specific industry, but then the next project might be a different set of integrations or a different industry. So we need to enable for that, whatever that is. And If I'm the ISV, especially in SaaS and with AI, our product is changing wicked fast. How do I help you and your staff keep up with that? And it can't be send 15 people to five days of training. Nobody does that anymore. It's too, hey, they don't have the attention span because that's the other problem with this. You know, humans have a really short attention span in tech. So you need to be bite sized bullet bullets, bulletized topics when they're needed. And you know, I talk about doing gamification around that and I don't mean sort of the juvenile kind of whack a mole or you know, candy crush kind of gamification.
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Right.
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But there's some things we can learn from those metaphors where you give the incentive to the individual individual to engage with these little modules by giving them something back that you give them a certification or a badge that they can put on the resume, promote it on LinkedIn. And then the leaders of their company, the incentive they have is you build that credentialing, badging and certifications, you build that into your tiering strategy eventually and you give them additional benefits in exchange for showing evidence that their staff knows your product. And that could be as simple as gates. You have to have a certain number of this to be able to get referrals from me. Or it could be a higher referral rate or it could be a more prominent position on my website. It could be co marketing. But there's so many things in partnerships that you can do together to incent one another, but you have to have some way of, if you have 500 partners, how do I, how do I articulate who gets what and how do I defend that? And how do I use the benefits I'm giving to you as a way to incent you to do what I need you to do, which is keep my product top of mind and keep your staff proficient with it?
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Yeah, yeah. And that, that kind of brings me to the last thing I want to kind of talk about is measurement of, of success. And so again we, we've talked about some of the wrong ways to, you know, it's, it's not purely volume of partners. It's, you know, it's, it's. But you know, there's, there's probably some more obvious KPIs, but maybe what are one or two non obvious KPIs that, that leaders should be looking at to measure true health and tangible value?
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C
Yeah, well, we kind of talked about the first one. The paper partner phenomenon is often created by an overemphasis on partner agreements signed. So the first thing that organizations I would recommend is de. Emphasize that it's still important, of course, but you need to think about when is the right time to have a partner agreement signed. It's not early on. You showed some interest. You don't ask a prospect to sign an MSA just because they're a qualified lead. That's ridiculous. So we're doing the same thing with partners signing partner agreements just because they look like they might possibly. So if you buy into that mindset that signing agreements early is a problem, then the next thing that you want to look at is partner sourced revenue. But that's also often overemphasized by the channel mindset. Like we need revenue. Where's our deals? Yeah, of course you're building a partner program to drive revenue. Of course you want to pay attention to that. But you can't overemphasize that. You need to also look at partner influenced. And this is a very controversial topic in a lot of organizations. And sometimes heads of sales or CFOs don't want to count influence because it's hard to measure. It's hard, it's qualitative. And so how do I argue? It doesn't matter. It's a indicative KPI, not a binary KPI. So have a conversation Internally about how you want to define when a partner influences an opportunity. And I always argue for, let's be generous, let's agree the partners involved, they've influenced it in some way, let's track it, and then let's look at the trends. And if you're doing that versus saying, well, they didn't recommend us, so that's not influence. Recommend is not the same as influence. Influence could be as simple as you calling me up and saying, hey, I heard you're in this deal. Do you know that your competitor is also in the deal? This deal? You might not be influencing the prospect, but you're influencing my pursuit of that deal and you're influencing my chance to win because you just told me somebody I'm competing with that I might not have known about. So if you're, in aggregate, you're tracking those little bits of intel that you're getting from this pack of people you're hunting with, that KPI absolutely should be growing over time. And if it's not, you're not building your program, you're not building your ecosystem, well, maybe you're keeping them at arm's length. And I argue, you know, if you've, if you agree that hunting as a pack is going to produce more results long term than a lone wolf, then this KPI is massively important. And you should, you should aspire to have partner, at least one partner, influencing every single deal. If you're treating your program and your ecosystem strategically, there shouldn't be a single deal in today's market and the complexity of what we have with all these products working together and all these buying decisions together. If you're doing a deal without some partner helping you figure out what's going on, you're just doing it the hard way.
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Yeah, yeah, got it. Yeah. Well, so as, as we wrap up here, let's look out to the future a little bit. You know, let's say we're having this conversation a year from now. What are we, you know, what's, what's evolved with B2B partnerships? What are, you know, what are we talking about?
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Yeah, I think from my point of view, because this is what I do all day long, is talking about these things and talking to people about the challenges. I think that what, what I see happening is the market begins to realize the kind of stuff that I've been talking about becomes a reality that more and more organizations adopt an ecosystem and partner led, not partner in addition to, but a partner led, go to market strategy. And I think, I think executives are going to start to realize that this isn't a nice to have, that they can do some point in the future. Especially with AI changing the market so fast, if you're not plugged into other people doing research on the tech and research on trends and research on buying decisions, you're going to get overtaken by somebody who is. So I think, I think that's going to, I think that's going to be critical. And of course, we can't have this conversation without saying AI is going to influence, of course, partnerships.
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Yeah, I know.
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In other ways as well.
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Well, Peter, thanks so much for joining today. One last question before we wrap up. What do you do to stay agile in your role and how do you find a way to do it consistently?
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I mean, I have to say AI. Right. And that's the answer to everything today. So I think the reality is partnerships as a discipline is so multifaceted, it's so cross functional. It's very complicated to execute and build this set of experiences and perspectives about all the different things it can touch. So I look at a lot of other people that have different experience than I do. I try to learn from them. And I'm, I'm also using AI a lot personally. I've, I've trained my own LLM to take everything that I've ever talked about to, to help me realize, you know, I did that before. How did, how did I attack that problem before? Yeah, and it's really interesting. I don't know if, if you ever seen Guy Kawasaki talk about his, his own Guy chatgpt.
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Yeah.
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And it was kind of funny that he talked to the interviewer about, you're going to get better answers from the GPT than you will for me because I've forgotten things I said. And that's absolutely true. Like when you start training a model with your own content, your own thought leadership, you get like, wow, I, I, I forgot I said that. That's, that's really interesting. Yeah. So I use that to help keep things fresh. Top of my mind, that I already know. And then of course, looking at other leaders. What are they doing?
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Nice. Well, again, I'd like to thank Peter Fogelsanger, fractional partner executive at Peter Fogg LLC for joining the show. You can learn more about Peter by following the links in the show notes.
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Thanks again for listening to the B2B Agility podcast. If you enjoyed the show, please take.
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A
A minute to subscribe.
- [28:46]
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Subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.b2bagility.com. That's B2B agility.com while you're there, check out my series of best selling agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. Until next time, stay focused and stay agile.
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The agile brand.