Channel Partner Recruitment in the Software Industry – 3

 In Building Successful Partner Channels, Industry News

business model channelThis series of posts discuss the best approach for recruiting channel business partners in the software industry. Click here to read the first post.

We focus on the most difficult scenario where the software vendor has neither customers nor business partners in the territory. We call this the “bootstrapping” phase.

This series of posts recommend what to prepare for being successful with the recruitment process itself and it also discusses what it takes to find and sign-up those partners who are most likely to become successful in winning new customers in the market.

A successful partner recruitment activity for a new market is estimated to take approximately 9 -12 months including an initial market assessment performed prior to contacting any potential partners.

The posts conclude that successful business partners are made by dedicated and committed professionals. Until you have met your potential business partners in person you will not be able to make the right choices.

Before you start calling on potential business partners there are few concepts you must have in place.

Your ambition

From the Garage to the NYSE in 10 Years Flat - Starting a Software Company

Software vendors must show their potential partners the prospects of a bright future

The majority of business partners prefer to play with the market leaders. There is a strong pull for the products of the market leaders and the business partners have less to explain to potential customers when carrying the products from recognized market leaders.

There is also more competition in the channel of the market leader and that motivates the business partners to be curious about new opportunities from time to time. However, being curious is not the same as acting. When the business partners does “the math” of taking a new product on board they tend to stay where they are[1].

You must bring a very convincing story to the meetings with your potential partners, and the first chapter of your story should be about your ambitions for achieving market leadership. You must be ambitious, but you must also be realistic. Rome was not built in a day.

Your customer value proposition

Your customer value proposition answers two crucial questions:

  • How your solution provides value to compelling customer needs way over and above the competitive alternative.
  • Which customer segments that derive the highest value from using your product.

There are mainly two formats available for developing customer value propositions: the value proposition canvas from Alexander Osterwalder and the NABC approach from the Stanford Research Institute.

For B2B software we recommend the NABC format. Please see our fact sheet “Customer Value Proposition” for the details.

Your value chain

The value chain explains what steps represent the best way to find, win, make and keep happy customers.


Sample software industry Value Chain

This is exactly what you expect your business partners to do, so you better be prepared to share your own experience with your potential partners.

Your business partner program

Partner P&L graphYour business partner program will explain how you will take your partner from the signature on the business partner agreement to his first two or three customers. You can find the details of the business partner program in our whitepaper “Designing Effective Channel Partner Programs in the Software Industry.”

The most important element in your business partner program is the business partner P&L.

The business partner P&L is the specification of all the financial elements of you business partner program and the investments the business partner must make to start and grow his business with your product.

Your business partner program and the business partner P&L makes up your business partner value proposition.

In broad terms the business partner value proposition is 25% about your products and 75% about doing business with you in the joint effort of winning new customers.

Ideal Partner Profile

IdealPartnerProfileThe last concept you need to define is your ideal partner profile.

The ideal partner profile has three sets of criteria. In this respect you can use the same approach for defining your ideal partner profile as you use for defining your ideal customer profile.

Please see our fact sheet “Ideal Customer Profile” for the details.

The big difference is that the most important source for success in the future is “hidden” in the psychographics criteria. You cannot predict the potential of a business partner by assessing his demographic and sociographic characteristics alone. Among business partners it is the people that make the difference. Until you have met the people behind your potential business partners you will not know where to place your bets.

The information package

From the materials developed for documenting the “ambition”, the customer value proposition, the value chain etc. you produce an “Information Package” with which you can brief potential partners about the business opportunity you offer.

Please check out my book Building Successful Partner Channels

To be continued…

Business Model illustration courtesy of the Business Model Foundry GmbH


[1] The situation may be different if your product is a complementary add-on to a product they already carry.

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