How to Build a Mutually & Equally Beneficial Partner Program

Listen to the podcast with guest speaker: Kathleen Phillips of Digital River. Aired on March 8, 2022.  

Table of contents:

• Introduction  
• How to show commitment to partners from the start?
  • Alignment with partners - understanding one another
  • Have a channel strategy from the beginning
    • Standing out among other vendors
• Channel partner training and alignment across the partner organization
  • Start with sales, evaluate and expand
• Shrinking time to revenue and increasing the value of partnerships
  • Figure out what you can do to make your partners succeed
• Partner enablement - make sure your partner is effectively representing you
  • Emphasize how you add incremental revenue to their business
    • Have a focus, don’t be too broad in your offering
  • Co-branded content - does it give you a competitive advantage?
• Partner incentives, spiffs and rewards - what’s the best approach?
  • Find out what’s worked in the past for your partners
  • Incentivizing beyond the sales team
  • Driving specific behaviors through incentives
• MDF & co-op marketing  
• Maintaining transparency and trust with partners
  • Integrity is critical
• Dedicated partner account managers vs. a team managing partners
• Tools for effective partner management
  • The benefits of a partner portal
• What should channel partners do to maintain a mutually beneficial relationship?
  • Set expectations based on the 80/20 rule
• Conclusion
  • What results can you expect from following a symbiotic approach?
  • Running a successful channel program
• Closing comments  
  • Kathleen Phillips’ background in channel sales
  • Digital River

Introduction  

The keys to building any relationship where both parties benefit mutually and equally are:

• Transparency
• Commitment
• and Trust.

These key areas hold great importance in channel partnerships and can influence many other areas of one’s channel strategy, such as determining a vendor’s partner retention efforts.  

So why do so many vendors have a hard time implementing partner programs that really promote these concepts?  

These key concepts should be at the heart of every partner program and every activity in a partner program should lead back to helping flesh out one of these key areas.  

They are the building blocks for a mutually and equally beneficial partner program, and how you can use them to build yours, is the discussion we’re about to have in this episode of The Ultimate Channel Sales Podcast.  

Our guest today, Kathleen Phillips, has been in channel-related roles for over 20 years.  

Her portfolio includes:  

• Leading teams that have generated more than 100 million dollars in new revenue and successfully launched over 35 disruptive products, solutions and services.
• In her first year of being VP of Global Channel Strategy and Operations at Entrust Datacard, the new channel recruitment strategy she introduced resulted in $28 million of new partner sales and 150 new partners.
• And in her most recent role, she closed the 2nd & 3rd largest global commerce partnerships within the first 65 days.  
  • And, increased partner-influenced revenue growth by 172% year-over-year.  

Today, she is the Head of Global Partnerships and Strategic Alliances at Digital River – a company that provides global seller services including:  

• tax calculation and remittance, payment authorization, fraud prevention, regulatory compliance and logistics  

She’s here with us now to discuss: How to Build a Mutually & Equally Beneficial Partner Program.  

How to show commitment to partners from the start?  

Paul Bird: When we look at how to build a mutually beneficial and really symbiotic partner program, where do you think it's best for people to start?  

How do we show commitment to the partner right from the get-go?  

Kathleen Phillips: I love the word symbiotic because at the end of the day, it has to be a mutual investment.  

If I make a big investment and my partner doesn't, then I'm going to be disappointed and vice versa.  

Alignment with partners - understanding one another  

Kathleen Phillips: One of the most important things is to have alignment. I need to understand how my partner makes money. I certainly hope that my partner wants to understand how I make money.  

Then you move on to things like:  

1. What is my unique value inside of that partner?

• How do I become very relevant inside of that partner?

2. Another big piece of it is how do they win?  

• I need to really understand how the partner wins and how I can support that.

3. Then you have to have agreement on what you are going to track.

• What measurable goals are we going to track together?  
• And how do we achieve them?  

And if we're not going in the right direction, let's fail fast and let's change it. But let's agree upon what the goal is.  

So many times I think companies get all wound up in: how do we recruit and enable? But we never, ever have those mutual goals that really are around revenue.  

Have a channel strategy from the beginning  

Paul Bird: Do you think this is right from the start?  

It's almost like putting together your business plan right from the get-go when you're having somebody recruited into the program where you're launching your channel strategy.  

Kathleen Phillips: Right.  

There's two buckets.

1. Get the onboarding right so that you are in violent agreement on what we're going to do together as partners.
2. Then the other piece really is time to revenue. That's it.  

How do we shrink our time to revenue? A big piece of that is training.  

It's wide and deep. It's not only the sales but it's customer service, it's their finance team, it's their executive team, it is their technical teams, it's their marketing teams.  

At the end of the day, we can do all different kinds of sales incentives. We can do different referral fees.  

We have to figure out:  

• how do we become relevant  
• and how do we become a preferred partner inside of that community, inside of that partner?  

Standing out among other vendors    

Kathleen Phillips: There's two things that companies can do above and beyond any product or services, which is:  

1. be very, very easy to do business with  
2. and then create exceptional experiences.  

Everybody's products are good and most of them aren't a massive improvement over somebody else's.  

"But every day of the week, if you're easy to do business with and you provide exceptional experiences for your partners, they're going to pick up the phone and talk to you all day long."

Paul Bird: That is something I have preached my entire career. Be as easy as possible to do business with.  

If you start putting hoops in front of people and making them jump through the process, they'll find somebody else.  

Channel partner training and alignment across the partner organization  

Paul Bird: You mentioned a few things there so let's unpack that. One of the things you said was training and not just training.  

If I think of early on in my channel career, the training was really focused on the sales team and the tech team. We want them to be able to represent the product in the market and go through the training.  

When I did VMware, I went through my sales certification, my technical sales certification. I had to redo it every year.  

But then you mentioned something else, to make sure that you have that training, with alignment, with customer success, with finance.  

What do you think the best way to go about delivering that training is?  

Do you open the door with sales first and then land and expand through the partner organization? Or is there a different approach?  

Kathleen Phillips: One of the things that I learned early in my career is I don't want to get stuck by a gatekeeper.  

The gatekeeper can either make or break the partnership. And that's why you go back to the first thing which is agreed upon goals.  

Start with sales, evaluate and expand  

Kathleen Phillips: You start with the sales team and you start with the person who is your counterpart.  

And very early on in the relationship you understand how their organization is structured and get agreement on who are the critical functional areas that we need to get in front of to help ensure their success. Because it's never just the sales team.  

The other piece that we have had tremendous success with at Digital River is executive alignment. Really making sure that our executives are aligned with the executives at our strategic partners.  

Paul Bird: That makes a lot of sense.  

If you have buy-in right at the top level, then the tactical level, the sales and the technical side of things, they'll have their marching orders, that's for sure.  

Shrinking time to revenue and increasing the value of partnerships  

Paul Bird: Then the other piece you said was time to value. And that is, really, time to revenue.  

Trying to make sure that if you have a channel partner, primarily, they're going to be partnering with you so they can make additional revenue.  

When you look at time to value, once you have them trained, what do you think brands can be doing to either shorten that time to value or increase the impact that they have with their channel partners?  

Figure out what you can do to make your partners succeed  

Kathleen Phillips: The premier thing is you have to have alignment with how that partner makes money and whether it's co-marketing, whether it’s spiffs, whether it's bringing them leads, how do you ensure their success?  

The companies that I've worked for, where we've had the most explosive growth in our partner channel, they're marketing all day long to their customers. But we also sat right beside them and we did our own marketing campaigns and then we threw those leads, those qualified leads to our partners.  

"A lot of it has to do with the investment that the manufacturer is willing to make inside their partner community."

Paul Bird: I couldn't agree more. We are in complete alignment.  

I've always referred to the channel as the beast. And if you feed the beast, then the beast is happy, the channel's happy.  

But if you're asking them just to exclusively go and do demand generation for you, then they're going to split their time on whatever product, service, solution that they're making the most money on.  

But if you want my attention and you're putting leads in my inbox every couple of days, then you know where my focus is going to be.  

Partner enablement - make sure your partner is effectively representing you  

Paul Bird: How about partner enablement?  

Any channel partner is likely going to be representing multiple different vendors, not just you. They're not exclusive.  

Is there something that we should be considering from an enablement perspective to make sure that partners are successful and representing you in the market in the right way?  

Kathleen Phillips: I could go on for 10 minutes on partner enablement, but I will give you one piece that I think has been phenomenally successful in the organizations that I've worked in.

Emphasize how you add incremental revenue to their business  

Kathleen Phillips: If I'm going to go recruit a partner, 9 times out of 10, 99 times out of 100, they already have products or services that may look similar to mine.  

And it may not be just one box. Maybe you have to bundle up three boxes to get the same box I bring.  

" But at the end of the day, they're not interested in taking partner revenue from partner A and shifting it to you unless you're going to make a lot more profit and grow their business faster."

What we always tend to do is understand: who are the companies that they're representing today that look like us?  

Then we go through a process where we literally say:  

• Here's how we stack up.  
• Here's really where we don't make sense for you guys.  
• Here's where we can add incremental value.  

And we're not trying to take all the revenue from the existing partners you have today. We're trying to figure out: how do we add incremental revenue to your business.  

I think that's the most important because nobody wants to lift and shift unless you're going to give a lot more profit.  

Have a focus, don’t be too broad in your offering  

Paul Bird: So don't be everything to everyone. Try to see where the greatest value you have within their organization is and then focus squarely on that for enablement.  

Kathleen Phillips: Right.  

Most partners have dozens of companies that they're working with, some of them have hundreds.  

If I'm the new kid on the block and all of a sudden I'm trying to create this relationship, I have to be very memorable and I can't be everything to everybody.  

The partners that pitch to us and are everything to everybody, our salespeople walk away and the next week they forgot what they did.  

But if somebody comes in, they're laser focused and ‘I only deal with the Northeast, I deal with lifestyle brands and this is my focus.’  

Then guess what? I'm going to remember that partner.  

Paul Bird: Absolutely. And they will be your go-to expert when it comes to any questions you have to deal with.  

Co-branded content - does it give you a competitive advantage?  

Paul Bird: I'm still focusing on the partner enablement because one of the things that I have seen in the last few years is this idea of giving people co-branded content.  

So you can maintain control of your content while giving the partner the ability to personalize it to a degree.  

Now, my background, I spent half my career working in the channel, the other half building channel. But when I was in the channel, this really wasn't much of an option for us.  

Do you think that over the last few years that this has given certain companies that are doing it a competitive advantage?  

Kathleen Phillips: Absolutely.  

I used to work for a company called Entrust Datacard, and this was seven, eight years ago.  

One of our weapons was that we set up a site where we had all of these marketing assets. There were:

• blogs
• material you could share on LinkedIn
• videos  
• podcasts  

And we allowed our partners to then co-brand all of those assets. So, to your point,  

" we had the ability to be consistent in how our brand was being represented by our channel partners globally."

Partner incentives, spiffs and rewards - what’s the best approach?  

Paul Bird: The concept of incentives, spiffs, rewards is also a topic that's been pretty hot over the last couple of years.  

I can remember when I was walking the floors at CDW 15 years ago, everyone had a sheet of paper on their desk with the latest and greatest spiff.  

Do you think that's evolved at all? Do you think we're more towards laser focused rewards? Or do you still think it’s the idea of: put my offering first, hit a certain target level and you're getting something in return?  

Find out what’s worked in the past for your partners  

Kathleen Phillips: I think it's very partner specific.  

What we see a lot in our industry is that partners will allow us to quote-unquote spiff their sales team but it's in the form of quota relief.  

So we're not putting money in their pocket, but we're relieving their quota, which can be a big deal for partners.  

Other partners will allow you to do contests, allow you to do loyalty programs, allow you to give their employees X amount of dollars for a lead or closing business.  

But as opposed to trying to take one set of spiffs or incentives and only use that as your arsenal, you're much better off to talk with that partner to ask what's worked in the past.  

Incentivizing beyond the sales team  

Kathleen Phillips: What's interesting is we've found it's not even the salespeople a lot of the time that we're spiffing. We're spiffing the professional services team. We're spiffing the sales engineers.  

It's a completely different way of thinking versus, 10/15 years ago, you just figured out: how do you get that salesperson more money than your competitors to get them to push your product?  

Paul Bird: So now going beyond sales because it used to just be really focused on the sales team. I love the idea of going after services and support.  

Driving specific behaviors through incentives  

Paul Bird: When you think of incentivizing or driving specific behaviors through some kind of incentive, do you look at training? Are there other things that you could measure against that you could maybe incentivize?  

Kathleen Phillips: Training is one of the number one pieces. Without that, they're not going to have the base that they need to be successful.  

And we don't have to even close the deal.  

So if one of our partners brings us into something, we're going to throw some money their way, if they allow us to. Just give us a chance, bring us to the table.  

Then there's other programs where we go all the way through where we're giving partners $25,000 and  

• they can use that to spiff their sales team,  
• they can use it to increase their profits,
• they can use that to reduce their implementation costs.  

We try to be really creative and try to figure out what's really going to move the needle for these partners. How are we going to really gain their mindshare inside their organization?  

MDF & co-op marketing  

Paul Bird: $25,000 is the kind of money I used to see when it came to co-op marketing or market development funds.  

How does MDF or co-op marketing play into the mix as well?  

Do you see that as more of an incentive to help people grow? Or do you think that really is getting back to driving time to value?  

Kathleen Phillips: It's a little bit of both.  

Companies that really are good marketeers, they love those types of programs. And what they don't like is the chains.  

‘Don't put chains around my arms, let me market how I want to market.’ Then if I need to step in and help them or support them with different assets or personnel even, we'll do that.  

"But companies that are willing to take and very diligently figure out: what's the best way for us to partner together, to co-market together. Those are the best relationships."

When you have a company that's going to co-market with you and whether you're doing the funding of it, or maybe they're doing some funding of it - it typically is both.  

That's a true partnership.

Maintaining transparency and trust with partners  

Paul Bird: One of the things that maybe isn't so tactical, but something that I think we need to keep our eye on, is maintaining that transparency and trust within the relationship.  

So when you have a partner that's been well-onboarded, you're deep within their organization, they are enabled, they're trained, they're motivated.  

How do we keep the transparency and trust in place over the long-haul?  

Integrity is critical  

Kathleen Phillips: My dad was one of my biggest mentors, and he taught me that your integrity is everything.  

When I'm out representing Digital River, if I do something that hurts the trust of my partner, it's not just my integrity. It's my company's integrity.  

It's not only what you said, which is being transparent, but most individuals will shy away from those kinds of difficult conversations.  

So, let's say we have an existing customer that both the partner and Digital River is working with and they're just not having the experience they need to.  

I'm going to jump on that call immediately. Get the right people on the team on the call to figure out where the disconnect is. And nine times out of ten, whatever I thought initially was a disconnect, was not even close.  

"It's getting partners to realize that we're going to do everything possible to ensure your success with your clients. We'll be there the entire way for you."

And if we have to play umpire to help with a situation that's gotten sticky, we'll do that.  

Paul Bird: When it comes to integrity, if you have it nothing else matters. And if you don't have it, nothing else matters.  

Dedicated partner account managers vs. a team managing partners  

Paul Bird: When I look at the management of the partner relationship there's two schools of thought.

1. One is to have a team of people managing the partners.  
2. And the other school of thought is having a dedicated individual as your primary partner account manager.  

Do you have an opinion on either or, which way is more effective?  

Kathleen Phillips: I think a combination.  

There's one person that should own that relationship, but there's no way that they're going to have the bandwidth to be on every single marketing call, be on every single technical call, every single demo, every single customer call.  

So what we've done at Digital River, is we've basically assembled a team of:  

• we have product
• we have channel marketing  
• we have our sales organization  
• we have our customer success organization  
• we have what we call our partner enablement organization  
• and an executive sponsor  

And they all sit around that business development person to ensure their success because there's no way they have the bandwidth.  

If you had two partners, yes, you could probably be on all those calls, but none of us are that lucky to only have two partners to manage. We're managing a whole sea of partners at any given time.  

Paul Bird: Unless you're that lucky partner account manager, where their partner is massive and they dedicate all of their time to it.  

But, for most of us, it is 5, 10, 15, 20 or more that we have to manage at any one given time.  

Tools for effective partner management  

Paul Bird: So all of these strategies and tactics and goals that we're engaging the partners with.  

What kind of tools do you think that people need to have in place so they can effectively manage the relationships and that they have the ability to to track and measure so that you can hold back to the metrics that you've established right at the beginning of the partnerships?  

What's in that toolkit?  

Kathleen Phillips: We use partner portals very extensively.  

It's basically where we house all of our assets and, if there's a particular ecosystem the partner plays in, they can see all the assets that are not only specific to them, but to that ecosystem along with our quarterly business plan.  

And so on a monthly basis, or most of the time they're meeting with the partner every week, if it's strategic. And sometimes multiple people in that partner community, in that particular partner on a weekly basis.  

But meeting with them on a regular basis to make sure that we're moving the needle. And if something's not working, let's fail fast.  

But we all agree upon those. And we use that one central location. It just makes it easier than Google Docs or sending Excel spreadsheets or emails.  

“We've really used our partner portal as our bank of intelligence and have the ability to track our partner relationships successfully.” (block quote)  

"We've really used our partner portal as our bank of intelligence and have the ability to track our partner relationships successfully"

The benefits of a partner portal  

Paul Bird: If you compare life without a partner portal as opposed to life with a partner portal, what kind of difference do you think it's made over the long-haul?  

Both of us have been in this industry long enough to remember that time where spreadsheets were governing most of the partner engagement process.  

But pre and post era, do you think that the gains are significant?  

Kathleen Phillips: I think the gains are significant for a couple of reasons.  

"You have multiple people in the organization that are contributing to the assets on that partner portal. The last thing you want is to be stuck on somebody's Excel spreadsheet."

So we have the ability to have this whole ecosystem of people at Digital River who support those partners.  

It's not just the business development person, but it's the channel marketing, it's the sales, it's the customer success, it's the partner enablement, it's our solutions architects and our SAEs.  

They all have access to what's going on with that particular partner.

So I don't have to have a separate meeting of every single partner and all of those individuals. They all have access to the same information.  

What should channel partners do to maintain a mutually beneficial relationship?  

Paul Bird: So with all of this effort that you and your team are putting in, what are some of the things that the actual channel partner themselves should be considering to make sure that they're contributing to the relationship as well?  

This is a symbiotic relationship, so there has to be a focus from the other side of the table.  

Any suggestions on what you would expect from these channel partners to make sure that this is benefiting both parties?  

Set expectations based on the 80/20 rule  

Kathleen Phillips: I go back to the 80/20 rule.  

I would say 10% of our channel partners are our strategic partners, 20% are very good partners, and then 70% really are more opportunistic.  

"With our strategic partners, we’re really expecting them to have marketing departments that are willing to make an investment so we can go to market together, we can co-brand, we can talk about wins, we can do blogs, we can do webinars."

If we do some type of testimonial or something, we ask them to take those assets, and we ask them to put them on their websites, we ask them to share them with social media.  

It's based on the partner level.  

So the strategic partners, we're looking for a mutual investment. And the other partners, we're going to manage and be more optimistic. We're not going to meet with them on a weekly basis and we're going to give them all the same assets and tools.  

But we realize that really, our focus needs to be on our two top-level partners.

What results can you expect from following a symbiotic approach?  

Paul Bird: You've shared some really great nuggets with us today, some great advice across the experience of your career.  

If people adopt your approach, this very focused symbiotic approach, what kind of gains do you think they would expect as opposed to more of a transitional way of, sign up, join my partner program and now you're authorized to sell my product?  

You're very engaged as opposed to people that are less engaged. What do you think the difference is when it comes down to the results?  

Kathleen Phillips: I think the biggest difference is that people do business with people.  

So if you have a more generic approach, you never, ever create those personal relationships.  

"If you think that your partners are going to be interested in building your business, you're going to be sorely disappointed. You have to be interested in building their business."

I think that's the biggest difference, by having this laser-focused approach, we have those personal relationships. We have a team of people that at any given time can drop anything they're doing to ensure that partner's success and make sure that our relationship is continuing to grow.  

And we're continuing to deliver on the agreed upon revenue goals that we have on a quarterly basis.  

Running a successful channel program  

Paul Bird: Any other suggestions, recommendations or advice that you can give people that are early on in their channel career or maybe they have a mature channel program and are looking for advice to get to the next level?  

Kathleen Phillips: I think the most important piece really, this is going to sound kind of corny, but have humility.  

Be somebody who is humble, be somebody who is gracious, be somebody who is genuinely interested in building your partner's business and be courageous - stand up for your partner.  

There's been times when I was like, ‘I'm not really sure if I should do this,’ but I'm like, ‘I'm going to because I know it's the right thing to do.’  

So it's being the person that literally is by their side to ensure their success.  

The other piece is,  

"it's not a numbers game. It's not about how many partners you have. It's about the quality of the partners that you have."

There are individuals that think we should sign up another ten partners in every single country in the world.  

Well, we don't have the bandwidth to manage that and the cost would be insane.  

Be focused, be strategic and be a person that a partner wants to do business with.  

Kathleen Phillips’ background in channel sales  

Kathleen Phillips: I've spent the last several decades working for high-tech companies. Anywhere from a startup to companies that are multi, multi billion dollars in sales.  

I've been very blessed. They've all been global companies. And I've had sales, marketing and partnership roles.  

My first job out of college, I worked for a company and the only route to market for us was partners. So it really became part of my DNA and the fabric of every single piece of clothes I ever put on.  

I learned very quickly the huge gratification and benefit of working with somebody and helping them grow their business. And it's been just a dream of mine to be in that same position with the company I'm at now.  

Digital River  

Paul Bird: What about Digital River, where you are now?  

Kathleen Phillips: Digital River is a global leader. We help brands that sell through e-commerce websites go into global markets very, very quickly.  

We have over 28 years experience setting up all of the payment gateways, legal entities, the tax structures, the fraud prevention, all the compliance to help brands go into new global markets very, very quickly.  

And I run their global partnership and strategic alliances business.  

Connect with Kathleen Phillips on LinkedIn.

Connect with Paul Bird on LinkedIn, book a demo with him, or contact him via email paul.bird@magentrix.com.

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