The #1 Secret to Channel Success: How to Align Your Goals with Your Partners

Peter Caputa is a firm believer in the power of partnerships — and for good reason. As the creator of the reseller program at HubSpot, the pioneering inbound marketing software company that went public last October, he has seen first-hand the impact that selling through the channel can have on a company’s growth. As of last June, it’s been responsible for approximately 42% of HubSpot’s customers, and 33% of its revenue.

Caputa shared 7 Steps HubSpot Used to Scale Its Channel Sales Program with us late last year, but there is one critical key to the program’s success that deserves additional delving into: creating alignment between your goals and the goals of your partners.

For any partnership to work, both parties must be working toward the same end. The software vendor/value-added reseller (VAR) relationship is no exception.

Find Out What Your Partners Really Need — Then Make Their Success Your Success

“While resellers must believe your software will help their clients, they must first believe that you can help them.” — Peter Caputa, VP Sales, HubSpot Tweet this

At its core, HubSpot’s channel program focuses on leveraging the business goals of its VAR partners as a means of meeting HubSpot’s own goals.

“A channel program is usually designed to generate incremental sales,” Caputa explains. “The SaaS company typically sees the partner simply as a source of additional clients and creates partner materials focused on how a partner can position and sell the SaaS product. A better approach is to think about what you, as the SaaS company, can build into your program to help your partners grow and succeed in their businesses.”

For HubSpot, that means focusing support for its VAR channel around helping resellers — for the most part marketing agencies — solve their own sales and marketing challenges. “While resellers must believe your software will help their clients,” Caputa says, “they must first believe that you can help them.”

After watching HubSpot salespeople spin their wheels giving demos to marketing consultants who had little intention or ability to sell the HubSpot product to their clients, Caputa began routing those kinds of inquiries to their webinars and shifted the focus of training and support to the partners’ own challenges, instead.

“As it turned out, most small and mid-sized marketing agencies and consultants need training on how to run their own businesses,” Caputa explains. “So, we began offering that training to our prospective partners, and by doing that we’ve helped thousands of agencies increase recurring revenue, lower cost of delivery, and improve client retention.”

In turn, that has helped increase the potential long-term value each reseller partnership provides HubSpot — the stronger the partners, the more profitable the program.

Tips for Empowering & Incentivizing Your Partners: How to Align Around the Same “Why?”

1) Go Beyond Commissions

With a value-added reseller channel model, though incentives (commissions) do play a role, they are not typically the primary focus of the compensation conversation.

In a traditional software reseller scenario, the reseller makes its money upfront on a one-time, big-ticket sale. In a SaaS VAR reseller model, the primary value to the partner lies in the vendor’s ability to help grow the partner’s business through the sale of additional services.

“Because we focus on helping partners grow their business and enable them to sell ten dollars of services for every dollar of software,” Caputa explains, “they don’t need to build their business on commissions.”

Although the HubSpot commission is quite generous, the bigger value partners see is gaining the ability to package services in a way they couldn’t before. Partnering with HubSpot enables them to expand and scale their services, which is the core of their business and where they already focus their efforts. It also allows them to continue keeping the end customer’s needs front-and-center.

2) Keep Everyone’s Sights Set on the End Customers

“When prospective partners ask about commissions, lead sharing, or white labeling in the first conversation, it’s a pretty good sign that the relationship isn’t going to work,” Caputa says. “All of these things are benefits for partners, not customers.”

HubSpot’s program is actually designed to reward partners specifically for helping customers succeed with HubSpot’s software. “We’re all rewarded when our mutual customers are successful,” Caputa says. That should be the driving force behind everything you and your partners do.

3) Think of Your Partners as an Extension of Your Team

“On the spectrum between employee and customer, you should really think of your partners more like employees,” Caputa says. “They may not have an ID badge, but you should be sharing information with them, looking out for their best interests, and being continually invested in helping them develop and grow. Most channel programs miss this. Most channel programs seem to ask their partners, ‘What have you done for me lately?’”

Caputa’s words capture one of the top themes echoed over and over by leaders of successful channel partnerships: Don’t treat your partners like second-class citizens. Invest the time it takes to discover their top needs and priorities, then ask yourself what kinds of resources and support you can provide to help them and your end customers succeed.

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Photo by: Henry Bloomfield