Strategy & Best Practices

Executive Q&A with ProsperWorks: Best Practices for Building a Channel Program

By Ideas @ AppDirect / Jul 17, 2018

Prosperworks Qa Blog Post

For many SaaS companies, the channel is becoming an increasingly important part of their go-to-market strategies. In fact, almost 70 percent of SaaS vendors drive revenue through resellers. There’s a lot of indirect revenue on the table, but even if the business case is clear and you’re chomping at the bit to start selling via the channel, it can still be hard to know where to start.

Building a channel program is a journey that Michael Benayoun knows well. As the Director of Channel Sales at ProsperWorks, Benayoun has grown the company’s channel efforts from zero resellers to more than 60 worldwide in less than two years. He recently sat down with Swetha Salunke, Senior Product Marketing Manager at AppDirect, to share some best practices for building a channel program from scratch.

Q (Swetha Salunke, AppDirect): ProsperWorks has experienced a lot of success. You you’re the only CRM vendor recommended by Google for G Suite and you have 12,000 paying customers. Why did you feel the need to launch a reseller program?

A (Michael Benayoun, ProsperWorks): I was hired to build the channel program, and when I joined, it was really opportunistic. What I mean by that is that ProsperWorks was starting to get inquiries from partners left and right, globally, to work with us. There was a need, it was undeniable.

The problem was that nobody was really in charge of it. We are a very fast‑growing company, and like any fast‑growing startup, a lot of times we didn’t take a step back and reflect on what we could be doing for the longer term. But, ProsperWorks said let's dedicate someone to the channel and test the model.

Q: Did you consider trying to build a solution in house to power your program?

A: No. We didn’t even consider the build approach because we don't have the resources. We don't have the time to do it, it's not our core. We'd rather buy a solution that's coming from a vendor where this is their core business. They know what they’re doing.

"We didn’t even consider the build approach because we don't have the resources."

Q: You ended up choosing AppDirect’s AppReseller product, but in general, what should SaaS companies look for in a reseller solution?

A: It’s really the quick time-to-value approach. I don’t have the luxury of spending six months to evaluate every single feature and function. For me, it was, "Okay, I know the product can address our requirements. I know we can get up and running in less than a month. Let's do it."

Beyond that, I would look for a solution that gives you the ability to scale. We started with focusing on the Google resellers. That's pretty much who our current partners are. Over time, we're probably going to open up the solution to more ecosystems. We have another program that we've had since the beginning called the referral program that complements our reseller program. We have about 1,000 referral partners right now, but probably less than 100 or 200 are really active. Eventually, we'll probably bring them onto the platform too.

Q: What other factors should SaaS vendors consider when selecting a reseller platform?

A solution that provides one portal is also important. Our vision is for partners to go to one place, one portal, and do everything from there. From the reseller perspective, consolidating a lot of different tasks makes it easier to collaborate on deals and so on.

At the end of the day, it's really about providing a solution that partners like to use, and that is easy. When you are an ISV partner and you work with resellers, you know that you're not the only ISV that they work with. We want to reduce the friction as much as possible so that it's easy for our partners to interact with us and do business with us.

"At the end of the day, it's really about providing a solution that partners like to use, and that is easy."

Best Practices for Recruiting Resellers

Q: After the technology decision has been made, how do you attract and recruit new resellers?

A: That's obviously a very important aspect of starting a program. This may seem obvious but the first thing is to put yourself in your partners’ shoes. What drives them? What is going to be relevant to them?

The big one, obviously, is the financial incentive. What kind of recurring margins are you offering to your partners? What kind of incentives or promotions do you offer? For example, as partners increase the volumes of revenue in a deal, what kind of incentive can they have as they get to higher tiers?

The other part is the services piece. However, because we work with partners that were typically born in the cloud within the past 10 years, for them the services piece is expected but it goes hand in hand with the margins.

Q: Let’s dig deeper into that. How do professional services differ for companies like ProsperWorks, which offer solutions that are very easy to deploy?

We compete against other CRMs, so let's mention Salesforce, for example. Salesforce doesn't really have a reseller program, so the way that their partners are making money is exclusively on services. It's a great opportunity for partners and they can bill quite a lot of money with that.

With us, it's a little different. We are a turn-key solution. It's such an easy solution to deploy that, yes, for partners there's probably a little less in services, but as we move upmarket, it's definitely going to be a bigger factor.

Q: What else can SaaS companies offer to attract resellers?

A: Giving partners the opportunity to create new revenue streams is very valuable. Partners may traditionally sell to the IT side of the house, but we give them a reason to talk to the sales or marketing side. If you really want to have a bigger footprint in the larger accounts, you have to talk to every functional area. We give them a reason to start talking to VPs of sales, chief revenue officers, directors of business development, and so on that they didn't really have before.

Another way to recruit resellers is to give them access to new segments or verticals, or offer alignment with other partners. This one is even more important when you are evolving in a platform ecosystem like Google. Ninety-nine percent of the partners that we work with are Google partners to begin with, and they obviously want to align themselves with the top ISVs in the Google ecosystem.

The Importance of Reseller Onboarding

Q: Let’s turn to reseller onboarding. What are some best practices for getting partners up and running?

A: This is probably the most overlooked component of starting a program. People expect partners to start selling your product right away, at least that was the expectation when I joined ProsperWorks.

Getting people to sign up as partners is great. That's the first step. It doesn't mean that those partners are going to rush to sell your product right away. It takes time. It's an investment that eventually pays off, big time, but it is an investment for the long‑term.

"People expect partners to start selling your product right away... but it is an investment for the long‑term."

Continuing education and enablement are critical to make it work. From the very beginning, I was focused on trying to not reinvent the wheel, repurposing as much as I could and figuring out what would be quick to build, because I was a team of one for a year and a half.

Again, for me quick time-to-value is key. Getting the products in place, getting the resources, and let's hit the ground running. We had to have a clear enablement plan, even though it wasn’t perfect on the first iteration, but we needed to have a clear plan for all the levels of the partner organization, whether it's sales, pre‑sales, support, services, or operations, and by that I mean billing and so on.

All the functions have to be enabled in order for it to work. If you train your partner on the sales side, yes, they're going to identify and quantify opportunities, you're going to work with them, you're going to close the deal. But if they can't deliver after that, you're at the risk of losing that customer.

Over the past two years, our churn on the channel side has been lower than for the business as a whole. I’m pretty proud of that because it proves that our enablement works. That's part of making sure that those partners can deliver exceptional support and services to those customers and that translates into higher retention.

Q: A partner program is clearly a big investment of time and resources. What can SaaS vendors expect in return from their resellers?

A: Partners are going to have a lot of questions and you have to make sure you respond to them in a timely manner. If you don't, then they are going to work with the next best vendor, that is, your competitor.

You're going to invest a lot of resources and time in them, so you can definitely be demanding in return. As you build traction with partners and start driving revenue, you can reward certain behaviors.

A big lesson that we’ve learned is that you can't have partner tiers from the get‑go. Even two years into it, we’re just starting to tier partners based on revenue and commitment. We're probably going to get there next year, but until then, we have our own internal ranking of partners that allows us to offer different programs to different partners.

"A big lesson that we’ve learned is that you can't have partner tiers from the get‑go."

Q: Can you give an example of a type of reward that isn’t based on moving a partner to a higher tier?

One of the programs that we're starting to launch on a wider scale is a lead‑sharing program. We don't have any presence in France, for example. We don't have enough leads there and, besides me, nobody speaks French at ProsperWorks so it doesn't make sense for us to manage those accounts.

So we’re going to reward a French partner by sending them the leads as they come in. Instead of trying to manage them internally, we're going to turn them over directly to the French partner. Because we do that, of course, we ask them in return to get certified, have the right resources, the right level of commitment, and so on.

Q: You’ve given us a lot of great best practices. To sum it all up, what advice would you give SaaS vendors looking to launch a new partner program?

A: To me, the most critical element is executive buy-in. It's one thing to hire people and to put the tools in place to start a program, but if you don't really have executive sponsorship behind it, you're not going to go anywhere. It cannot work in a silo.

It's not like we can have a channel team and expect to do miracles. It has to be aligned with every single function in the organization, whether it's sales or marketing or finance, or sales operations or services or support. We pretty much touch every single part of the organization.

"Be patient. Invest in the right partners. Don't spread yourself too thin."

ProsperWorks has had the luxury of having some good wins early in the program with some key committed partners who brought us into very large deals. But just be aware that the channel is a long-term play. You can start generating revenue from the first day, but depending on your business, it could take one to two years to get to meaningful, programmatic, predictable revenue. Be patient. Invest in the right partners. Don't spread yourself too thin.

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