A method to measure and prioritize your Partner roster
I got great feedback and input from Partnership Leaders colleagues of mine that I wanted to add more detail to a core pillar of my first post- the Share of Wallet exercise. Some pointed out to me that the primary blocker to partner revenue growth ( assuming that’s your North Star) is the misalignment of partner needs to the partner manager’s needs. Compounding the problem could be weak sales skills. After all, SaaS revenue growth requires a sale of a long term (often annual) subscription (often pre-paid) service and that shit is hard work. Anyone can sell 1-off insertion orders or score a test budget. But it requires legit salesmanship to close a meaningful sized SaaS deal or onboard a partner that can unlock significant new inventory or revenue opportunities.
TBH, I feel proper alignment of partner manager/client needs AND solid sales skills to be table stakes. My point of view is that the true gating factor of revenue growth is that a Partner Manager may not know where to focus his/her efforts. With so many simultaneous work streams and a natural divide of bringing on new partners and servicing existing ones, it is so easy for a Partner Manager to get distracted by the shiny things. I know I did. So I drafted my SOW exercise because I chased new deals that involved long sales cycles (e.g. agency partnerships) and tried to up-sell small deals (because I thought they’d be easy to close) while I missed the meatier and more valuable opportunities.
OK, here the scene: Let’s assume your partner revenues are flat Q on Q or trending down. You ask yourself what’s going on and where do I begin to fix the problem? I found myself in this exact situation at the end of Q1 2019 and created a template for my own work. The first table below shows my key partners with ~actual data as I entered Q2 sorted by Q1 Budget Target. I wanted to focus on a single KPI- achieving my Budget Target.
Here’s the direct link to the spreadsheet.
I gathered data on actual revenue by partner, the Net per partner, discovered the Wallet Size per partner, listed our internal Target Budget (the amount we felt we could capture) and finally the missing dollars. TL;DR we were leaving a lot of money on the table ($47.5M to be exact). I did the same exercise for Q2 but with a forecast for what I thought the wallet sizes were and what we could capture. Also to note that the correlation of budget captured to wallet size is low which suggests I did not do a good job of getting the dollars I should have earned.
But when sorted by Share of Wallet and Size of Wallet , a new story emerges.
The clear implication here is that I should put my focus on getting more from Partner 6 given the large wallet size and low SOW captured. Partner 3 has a larger total wallet size but I’m capturing more of the budget so its slightly less a focus. And partner 1 is now near the bottom because I’m already capturing so much of the available dollars. Another effective way to sort would be by Missing Dollars. Bottom line: prioritize on low SOW with large Wallet Size.
None of this matters if you don’t align your goals with those of your partner. But once you have that alignment, then the you can spring into action and this method is how.
What do you think? Let me know if you need/want help applying it to your work.
Next up will be another deep dive into Sales vs. Business Development vs. Partnerships. I’ll explain why I think they are often confused and how I define the differences.