Partner Strategy Network Episode 16
Wesley: Hello and welcome to the Partner Strategy Network podcast. I'm Wesley Coelho and I'm here with Mark Sochan. Hey Mark.
Mark: Hello Wesley
Wesley: Today we're going to be talking about setting realistic timeframes for setting up a partner channel. And for the purpose of this discussion, we're talking about VARs - value added resellers, and we're not talking about strategic product partnerships or GSI relationships. Those come with a different set of assumptions and timeframes. So, Mark, what do you often hear from CEOs who reach out to you urgently about starting up a partner program?
Mark: Well, Wesley, I often hear from startup CEOs who are under tremendous pressure to drive up sales and revenue, especially if they've just received financing, they've had to make some pretty big commits to their new investors. And now the pressure's on. So they're looking for all avenues of additional revenues.
And these CEOs often have an unrealistic assumption that it's going to take them just three to six months to get started and have the channel driving new revenues for them. And that's just not the case. So first you need to take a step back and consider if a VAR strategy is even appropriate for your current situation or timeframe, and make sure you aren't making one of the common classic mistakes.
And one of those common classic mistakes is starting too soon to build up a VAR channel. Ideally, you should be at 20 million in annual revenues or more, in order to be successful with a VAR program, or at least there has to be a very strong alignment between the companies and your ideal customer profiles.
Wesley: So I understand that It's not always the case that you need to have 20 million or more in revenue, but it's ideal if you do, why is it that you need to have that much revenue to get started?
Mark: Well, the reason that you need revenue to get started is because channel partners don't automatically create demand. They of course want to sell products where there is already demand. So you need to have some amount of market presence and awareness to be able to create, pull from customers. Another common misconception is that partners can figure out your sales process for you.
If you don't know how to sell your product, I can guarantee you your partner's not going to know how to sell your product. So to scale with partners, you first need to have nailed down repeatable sales process that you can then train and enable them on.
Wesley: let's say you've considered those two common pitfalls. And a number of other things that are important factors in determining a bar program makes sense for you. And you've decided to go ahead, you've got market presence. You figured out your sales process, you know, it's repeatable from that point, when you start, how long does this to.
Mark: Well, I think realistically, and it might not be the answer that some people want to hear, but realistically, the timeframe is probably going to be about 12 to 18 months. From the time that you say go, let's start up a partner program to the time that you're seeing revenues first flow.
Wesley: Why is it going to take that long?
Mark: Let's go through kind of a hypothetical timeline of what setting up a partner program and getting it fully functional would look like. So let's look at day one, for beginning of the first quarter, we've decided to, build out the program. We define the incentives. It's going to take time to create the contract agreements, create a target partner list, identifying internal resources. Plus we have to also create all the partner enablement, aerials, the sales decks, the objection handling ideal customer profile and so forth. So that's one quarters worth of work right there. Then in the second quarter, it's time to contact, reach out to those target partners schedule.
First meetings do demos, all the followup stuff that leads to the contract, to the partner contract signing. And then you've got to start working on the enablement training, not only for sales. But also for pre-sales. So now you can see how you're already into two quarters, six months, and only from the time that your sales and pre-sales enablement training is completed.
Are you ready to start doing some joint marketing and prospecting? So you might enable some joint webinars get those scheduled, some prospect calling to, partner customers and start registering opportunities in the joint partner sales pipeline. So now we're at 9 months. And, as new sales opportunities get registered now it's nine months plus whatever is your typical average sales cycle.
And that's how we get to the 12 to 18 months.
Wesley: thanks for laying out how exactly time adds up in that way. And the reality is it takes a while. So it's important to emphasize that building a channel partner program takes patients. It isn't like closing a single deal. This is about building up that competency, building up that internal muscle on partnerships.
And often doing that inside a business that has many other priorities. So that just takes time. And of course there's a major payoff in terms of scaling sales when you get it. Right. Okay. Well, thanks for listening. And for more information, you can subscribe to the podcast and come join the discussion at the Partner Strategy Network LinkedIn group.