Ep. 104 | Why Your Business Needs a Partner Program Strategy
One of the quickest ways to building your business is through partnerships — whether you call them affiliates, strategic partners, referral sources, alliances, or something else — that can help you enhance your brand, extend your sales footprint, and reach new customer. But how do you go about developing a partnership program strategy?
In this week’s Rethink Marketing podcast, we chat with Nick Jordan from Logic Inbound about building new partner relationships that can grow your business. Logic Inbound is a search marketing agency based in Seattle.
What is a partnership program?
Nathan: We are talking about building a partnership program strategy that grows your business. Can you explain what that is?
Nick: The channel partnership model I think is really hidden from a lot of people’s views. But once you’re exposed to it, you understand how powerful it can be to activate partnerships with dozens or hundreds of thousands of companies around the world that are actively pushing your software or service on your behalf. And what this allows you to do is scale your reach without maintaining the resources it takes to have an in house sales team.
Nathan: What are some ways Logic Inbound is doing that?
Nick: Well, I’ll back up here for a second. I spent four years in the Microsoft ecosystem at an ISD. And we provided SaaS solutions to Microsoft partners. And when I joined the company we had 10 people, but we had a customer base in 50 countries. And the reason why we were able to have such a global reach with such a small, small team is because we had hundreds at that point, maybe even 1,000, independent Microsoft resellers going out and selling our software on behalf of us. And the reason that they were doing that was because we lowered their total cost of ownership to deliver the services that they were doing every single day. So when they used our software, they could cut their cost by 30 percent. And so they would actively push our software on all of their customers.
Now at Logic Inbound, it’s a little bit different. One big gap I noticed is that the agency space doesn’t really understand partnerships. So when I meet another agency, I don’t look at them as a competitor, I look at them as a partner. And it’s because most agencies don’t have a core focus or a core service or a core strength in search marketing. And we don’t have a core strength in whatever it is they offer. So when we’re talking to customers, we’re a trusted advisor. And the recommendations that we make to those customers are highly held. And it allows us to pull in other agencies into deals to do the things that we don’t do. And vice versa.
We have a Facebook ad agency and they just do Facebook ads. And when someone talks about search marketing, they bring us into the conversation. And so partnerships have been the most critical component to our growth as an agency over the last couple years. It’s allowed us to move up market from local service businesses to international manufacturing conglomerates because we are recommended by a partner, an agency partner that was already working with them, that was already trusted. And we closed them and then we just kept on moving up market.
Nathan: Something I always wondered about. What is a partnership. Is it a verbal handshake or a formal agreement? What is a partnership?
Nick: It’s really flexible. So when you look at us, it’s very often informal. And after maybe a couple of conversations where we’re trading clients back and forth, it turns into something more concrete with an agreement. But I would say Act-On probably has an amazing partnership channel. Because a lot of the deals that you’re working on are indirect. They were brought to you by partner agencies much like ours who are selling Act-On on behalf of you.
Nathan: I agree. You just can’t scale your business quickly and make all those 1 to 1 phone calls with an inside sales team the same way you can with a partner program.
Nick: Let me just expand on what you just said. It really does add a lot of scale. Because if you look at — let’s say I talk to a prospect, well that’s one deal. But if I do that same activity, that same prospecting activity, but I do it with a potential channel partner, as an agency I might see 300 deals a year. And other agencies of my size also see a similar number of deals. So by spending that time instead of talking to a direct client, I talk to a potential partner, I have the ability to now potentially touch dozens and dozens and dozens of deals over the course of the year.
Nathan: With something like that, do you need to focus your niche to make yourself more marketable to channel partners?
Nick: That’s a great question. People don’t wanna work with people that do the same thing as them. So what we do is 90 percent of our revenue is search marketing. But we position ourselves as a full service firm. On our website if you go there, we do Facebook ads, and we do influencer marketing, and we do all sorts of stuff that we don’t actually do. And what this allows us to do is when we get a customer that reaches out to us for a breadth of services, we can now pull in the partners that we also want reciprocal deal flow from.
Nathan: When a company is thinking about building its channel partner program. What are some of the things to think about for identifying a good partner or someone to avoid?
Nick: To be honest, we’re still figuring it out. Some of our partnerships that we think have a lot of high potential aren’t transacting, and some of the partnership that we’re skeptical of end up being really great partnerships. And so let’s back up and maybe we can circle back on that question. Let’s talk about how we approach channel partnerships and how we secure them. So we reached out — one of the things that we did was we reached out to all of the bigger agencies in Seattle. And the way that we positioned the initial conversation is in terms of mentorship. Hey, you have a really awesome agency, it’s very enviable, this is what my agency I would hope looks like in a couple years, how did you get to where you’re at today?
And I positioned myself as someone worth investing an hour into because I’ll be able to 10x the mentorship that they give me. And most agency owners are more than happy to, because they had a mentor that was fantastic and really critical to their growth, or they didn’t have a mentor and they wish they did. And so all these bigger agencies that have 50, 100, 100 plus employees, are more than willing to meet with me to provide an hour mentorship. And by the end of the conversation they end up really liking me. And they’re like, hey, maybe there’s some projects we can work on together. So I would say that’s the — if you’re a new agency, the number one activity you should be doing is talking to all the larger agencies, because they have the customers that you wanna work with.
Nathan: Does this advice work across industries, whether you’re a tech company, a manufacturer or in higher ed? How should they think about channel partnerships?
Nick: Look at the players in the ecosystem that can influence purchasing decisions by your target demographic. When we think about channel partnerships it’s not always in terms of agencies. It’s also just independent consultants. Or it might even be people like accountants or people that regularly touch the types of customers that we wanna work with.
Nathan: You reach out to them with the ask of being a mentor, what is the next step after that? What if they are approaching you? How do you drive the relationship to becoming a revenue stream?
Nick: What we found a key to closing service, selling services, is there’s just a couple things. One, the most important thing is to have — well maybe not the most important thing, but very critical is they have to like you. There’s not a lot of differentiation between service companies. Whereas people can shop based off of product features. And so likeability is super important. Second, they need to be confident that when they put their reputation behind making an intro to someone, that they’re confident you can deliver on the things that you’re going to say that you can deliver on. So if you can nail both those two things, you’re going to have lots of partnerships.
Nathan: How do you set expectations so that it is a win win for both?
Nick: I mentioned one of the strategies to recruiting new channel partners that are bigger than us is reaching out for mentorship. Another strategy that we use is we just like to be helpful. So I mentioned that we might see 300 deals in a given year. Well most of the deals we’re not the best fit. Search marketing is not the right tool for their goals. But that doesn’t mean I still can’t be helpful and I still can’t provide a lot of value. And the way that I’m able to do that is by making an introduction to someone that I think could be helpful.
So when we identify a channel partner that we wanna recruit, one of our go to tools is just send them a bunch of referrals without asking anything in return. And we’ll send them anywhere between 2 and 10. And we’ll evaluate them based off their ability to close the deal, as well as their ability to reciprocate those referrals. And if it doesn’t turn out, that’s totally fine. We’ll send 2 to 10 deals to the next agency that we wanna work with.
Nathan: How much time should you be putting toward partnership growth?
Nick: Going back to scale, this is where I spend a majority of my time. Because again one potential channel partner has the ability to close dozens of deals, whereas one prospect is just one deal. So I’m very fortunate where we have a really strong team, where I don’t need to worry about operations, I don’t need to worry about things like accounting, and hiring, and recruiting. I can spend my time increasing the amount of inbound traffic that we have, building brand awareness, not just in front of prospects, but in front of other agencies as well, in going to networking events and things like that.
Nathan: What are some of the metrics that could be used to measure whether your partnership program is working or not?
Nick: That’s a great question. So I’d say at this point of our agency state, we’re relatively unsophisticated. Whereas when I was working in the Microsoft ecosystem, we’re a SaaS company, we grew up to 200 employees, and we were a lot more sophisticated there just due to the amount of resources in the space of the company. I think one of the easiest metrics to measure channel partners is how many referrals that they send you. And then another way to dive even deeper, ’cause at the end of the day it’s not about the referrals, it’s the number of referrals that are qualified and close. That seems fairly intuitive that the people that are contributing the most amount of impact on our business are also the people that are sending the most qualified referrals.
Nathan: What are some of the unwritten rules of partnerships and referrals? Do you send 10 percent or the deal or just a bottle of wine?
Nick: From my perspective, and I’ll just project this on my friends that run agencies, and our channel partners, and have their own set of channel partners, and a bottle of wine is great, a referral fee is great, but what’s most important is sending referrals back. We would — 10 percent of a deal is like cool and it’s nice, but it’s not anything that’s impactful for a business overall. What’s more impactful is that we receive reciprocal referrals of the type of clients that we wanna work with or grow into working with. Let’s say an average deal is 10,000 a month. Well 10 percent of that is only $1,000. And in the grand scheme of things that’s very insignificant and doesn’t drive a lot of impact. But if that same channel partner referred me a $10,000 deal, now that is interesting.
I didn’t answer your other question in terms of attribution. Attribution’s really simple. Over 50 percent of our revenue is from channel. And it’s simply just where did this prospect find us. And a typical agency you don’t have thousands of customers. You might have dozens or hundreds. And so doing that kind of attribution is fairly intuitive.
Nathan: Are there any strategies for when a partnership is not working out?
Nick: We haven’t got to that point yet. Like I said, right now at the stage we’re at, we’re relatively unsophisticated. We’ve turned the channel into, like I said, over 50 percent of our revenue. But it’s pretty simple. The partnership’s not working, you just stop referring each other deals and bringing people in. And you just go find a new partner to fulfill that service that you need to fulfill.
Nathan: Do you find that when you develop one of these relationships that you work a little harder to be a good partner and send them referrals.
Nick: If you look at the time it can take to build trust with one of your channel partners, sometimes it’s instant, but sometimes it’s — we spent a year building a relationship with an agency we wanna work with, and we just got our first referral. And to let them down after that year of work is a disaster. It’s a huge productivity killer. And it just — I put my name and face on the line, and it’s not a good feeling for me. So when high performing channel partners are sending lots of deals, there’s definitely pressure to reciprocate because one: in just creating that pipeline, but then two, it goes back to liking who you work with. And in services that’s very important.
And so at this point I probably really like the person that is sending me deals. And I wanna make sure that I perform to help them as much as I can. Because I like helping people. That makes me feel good.
Nathan: Along those lines, how do you get better at sending your partners deals?
Nick: I think it’s probably highly dependent on your own deal flow. The more deals that you see, the easier it is to make value add introductions when you’re not the best fit for the particular client or prospect. Understanding who the ideal customer is is also important because I don’t wanna send them a prospect who’s gonna waste an hour of their time to find out that they don’t have the budget or they’re not qualified to make the investment. So the bigger deal flow you have, I’d say the easier it is to go recruit channel partners because you’re just sending deals all over the place. And if those people don’t reciprocate, then you’re pushing your deal flow somewhere else.
One of the things I don’t think we touched based on is the two types of partnership models that are possible. One is the referral model, that’s very intuitive, it’s hey this is my friend Nick, he runs search marketing, you said you wanted some search marketing help, you guys should talk. The other is white label, so we also have white label partners that sell our services under their own branding. And they maintain a customer relationship, they build a customer, and then we just show up to meetings under a branded email address. And we say we’re a part of their SEO team. And both partnership models work really great. And both of them should be pursued.
Nathan: Can you talk about scaling your partnership program?
Nick: Let’s talk a little bit more about channel partner recruitment. One of the things that we’re actively focused on is not just — it’s scale. We wanna build partnerships at scale, having a lot of one to one conversations, and driving around the city is — I don’t think is effective — well not that that’s use of my time, it’s absolutely valuable, and I need to do it, and I do do it. But it’s possible to leverage your time more effectively by building these partnerships at scale. And the way that we’re doing it is I’ve connected with I think about 1,000 marketers within the Seattle area on LinkedIn, using sales navigator. And the way that I build rapport and credibility with them is just through social thought leadership. I share wins, I share that we got 95,000 visits from Google, I share that we outrank Instagram for contact Instagram. Sometimes I’m vulnerable, sometimes I’m dropping knowledge bombs, like how we grew a startup meet up group to 2,000 members in a couple months.
But all these things are doing a couple different things. They’re — it’s building awareness that we actually exist. And it’s building trust and credibility with the people who have the ability to influence purchasing decisions. And so it’s a combination of the one on one high touch, but also the one to many low touch social selling combination.
Nathan: So, are you thinking of ways to do that nationally and globally?
Nick: Absolutely. So it’s the same playbook as just doing it locally. But instead of targeting a specific geo, it’s just targeting the type of job title or the type of demographic that has the ability to drive these things. It’s always easier locally because you’ll have more touch points, you’ll see them around at events, you’ll end up at the same parties as them, you meet in person. And after we’ve developed a strong brand in Seattle as the top search marketing company, we’re gonna begin to focus more globally. Now with that said, we’re still doing global. I’m still in a bunch of Facebook groups with marketers that aren’t in Seattle. I’m still connecting with marketers outside of Seattle. But the focus is right now is getting critical density in Seattle and in leveraging that critical density to go national.
Nathan: Excellent. Nick, I appreciate your time this afternoon. How can I learn more about you and Logic Inbound?
Nick: Check out logicinbound.com. Check me out on LinkedIn, Nick Jordan, or you can type Nick From Seattle. On Instagram I’m Nick From Seattle. On Facebook I’m Nick From Seattle. On Twitter I’m Nick From Seattle. And you could probably just type Nick From Seattle under Google too and find all those properties.
Nathan: Excellent. Thank you.
Nick: Nathan, thanks so much for having me on today. And I really hope your listeners were able to walk away with a better understanding of tactics and techniques that they can start implementing tomorrow to grow their business.