In a few of our recent articles, “What is a Partnership Ecosystem & Why Do Channel Partner Programs Need Them?” and “How Do You Build a Successful Partnership Ecosystem Framework?”, we’ve covered the rise of partner ecosystems, why partner programs should invest in an ecosystem model and how they can develop their own ecosystem framework.

Here’s a quick recap:

Later in this piece we’ll discuss non-transacting partners’ role in the ecosystem and how they impact a partner program’s pre-sale and post-sale activities.

What is a Partner Ecosystem?

A partner ecosystem is a community of companies that play a role in delivering business outcomes to their customers. The ecosystem encompasses a range of pre-sale, sale and post-sale activities that extend far beyond just the transaction between a technology provider, sales partner and end customer.

Why Do Channel Partner Programs Need a Partner Ecosystem?

The survey results for our recent partner ecosystem blogs identified these key reasons programs should develop an ecosystem:

  1. Partner Ecosystems Foster Faster & More Effective Co-Marketing & Co-Selling
  2. Partner Ecosystems Present Another Route to Customers and More Sales
  3. Partner Ecosystems Create More Complete Solutions Through Purpose-Built Integrations
  4. Partner Ecosystems Integrate the Partner Program with the Provider Company
  5. Partner Ecosystems Improve Partner Experience (PX)

What Types of Partners Exist in the Ecosystem?

There are six primary types of partnerships within a partner ecosystem, including:

  • Technology Members – Also known as an integration partnership, a technology alliance partnership is the partnering company’s products integrated to deliver additional value to the customer. Companies pursue technology partnerships if their platforms benefit from the additional capabilities and features of the partners’ solutions.
  • Strategic Alliances – Sometimes referred to as strategic partnerships, strategic alliances align the long-term goals of two or more companies. These are multi-department commitments with clearly articulated goals and investments for both organizations. Companies may enter these partnerships because they have the same end customers or plan to enter a new target vertical with complementary solutions.
  • Business Channel Alliances – A channel alliance is an arrangement where a vendor engages a partner to resell, manage, and deliver the vendor’s product to market. The partner makes money through vendor referral fees, margins or commissions and by selling complementary services. The vendor benefits from the partners’ existing customer relationships and a faster go-to-market timeline. There are a few different types of business alliance partnerships, including:
    • Resellers
    • Value-added resellers (VARs)
    • Systems integrators (SIs)
    • Agency partners
    • Business process outsourcers (BPOs)
    • Managed service providers (MSPs)
  • Transaction & Transaction-Assist Channels – These partnerships facilitate transactions between a vendor and an end customer. Unlike business alliances, these partners only facilitate the purchase in exchange for compensation.
  • Influencers – Influencers refer to entities that “influence” the decision-making of an end customer to purchase a vendor solution but are not directly involved in the transaction. These partnerships are typically comprised of these companies:
    • Alliance partners
    • Consultants
    • Ambassadors
    • Advocates
    • Affiliates
  • Retention Channels – Retention channels refer to partner companies who are involved in helping to retain the use of a tech vendor solution by proxy through the delivery of the partner company’s services. Companies that typically fit into retention channels include:
    • Digital agencies
    • Healthcare companies
    • Construction companies
    • Legal or compliance companies
    • Transport companies
    • Accounting and CPA companies
    • Management consultants and other professional services

The Role of Non-Transactional Partners

The non-transactional partners within an ecosystem are best looked at from a pre-sale and post-sale lens. They do impact vendor deals and generate and retain revenue, just not in the traditional sense that most partner programs are accustomed to. Channel companies following legacy models primarily centered solely around the transaction itself will need to incorporate non-transactional partners in the design of their programs.

Jay McBain, Chief Analyst for technology market analyst firm Canalys, described a trifurcated channel as part of his channel predictions for 2020 while at Forrester. The trifurcated channel broke down into three segments:

  • Influencer channel → Pre-sale
  • Transaction channel → Sale
  • Retention channels → Post-sale

More than 80 percent of potential partners a program can attract will show up before or after the sale, so strictly transactional channel sales models must be abandoned for a company trying to maximize the ROI of their indirect sales initiatives.

Pre-sale activities are primarily conducted by an influencer channel which typically consists of affinity partners, referral agents, affiliates, advocates, ambassadors and alliances. News media, vendor rating systems and channel experts are significant influencers in partner ecosystems.

An example of an influencer channel partner would be a popular niche tech podcast that recommends or pushes a particular vendor’s solution to its listeners.

A second example would be a local business association or chamber of commerce that raises awareness about their member companies to each other in newsletters, events and other communications to promote collaboration and partnership.

Post-sale activities typically involve companies that are part of a retention channel which typically includes agencies, consultants, law firms, accountants and other types of professional services. These companies often make direct use of tech or software vendor products and, by extension, keep the vendor solution present in the client environment long after the initial transaction and implementation occurred.

A straightforward example of a retention channel partner is a marketing firm that helps ensure continued use and renewal of the HubSpot marketing automation platform.

Another would be an accounting firm that utilizes QuickBooks to handle their clients’ bookkeeping year after year.

Non-Transactional Partners Introduce Complexity to Program Fundamentals

Clearly, the ecosystem model has brought multiple new layers of complexity into partner programs that didn’t exist before.

For example, how do you compensate a retention channel partner versus an influencer channel partner on a long-term deal? Which partner ultimately had a more significant impact on your ROI? Looking at hard numbers would tell you over time that the retention partner is more impactful, but you possibly wouldn’t have the customer in the first place without the influencer partner. In a legacy transaction-oriented model, basic compensation questions like this are easier to answer.

Looking further upstream when marketing your solutions, which partners do you choose to invest MDF in? How do you stretch your existing budgets further when opening up your program to all these new partner types?

A Partner Ecosystem Needs Clear Data & Metrics to Determine ROI

What do all these new questions and complexity mean for your program? A greater emphasis on data, metrics and tracking of partner engagement and how they’ve affected a deal to determine revenue attribution and which partners to invest in long-term.

A partner relationship management software platform like ZiftONETM can help your program scale to handle a global partner ecosystem with all six partner types and give you the insight you need spanning the entire trifurcated channel model.