For many software companies there is a real challenge in continuing to develop the software to keep pace with changes in their sector. To be successful you need a business strategy that makes sure you meet the needs of customers in your target market . . . and it’s here where Product Partners play a crucial role.
Product Partners are different to straightforward channel resellers who include your software in a portfolio of other solutions to sell to their target market. Instead, Product Partners have created software of their own which adds value to your existing solution. They can help you to offer a functionally-rich solution, create better revenue opportunities, position your company as the strongest supplier, and create new active and passive income streams.
There are four main different types of software Product Partner, all of which need to be carefully managed to make the business successful:
1. Advocate partners – this is where you would recommend a partner product and company to your customers in return for remuneration, but would remain in control of the sale from proposal through to closing. It’s a low-touch partnership to add value to your solution.
2. Strategic partners – these are high-value relationships between your company and the Partner, working together for common goals and revenue-share incentives and aligned around the same values and messaging. This involves working in true collaboration and allows your business to position itself as a leading supplier in a given deal.
3. Technical partners – partners who pay a fee to pass information between their product and your product, but their product does not feature within your portfolio. This can represent a separate but active revenue stream for your company.
4. Referral partners – you would pass leads to Partner companies in exchange for commission remuneration, either per lead or per sale, and allow them to lead the sale through to closure. This is more of a passive income partnership where you are allowing partner companies to capitalize on your customer base in exchange for % revenue.
Whichever Product Partner strategy you go for (and it can easily be a combination of all four) it’s important to keep the main goal of any partnership in mind; both sides must get value from the relationship.
Many thanks to guest contributor and Product Strategy Leader, Nick Finnemore. Read more from Nick and get in touch with him here.