Profile of a great channel partner

A channel partner is an organization or individual that helps you grow by introducing you to prospective customers.

Sometimes channel partners are resellers whom you pay when their customers buy your product. Often, those resellers will also take on support, billing, and collection responsibilities for the customers they bring your way. Sometimes, the relationship is more arms-length, and the partner does little more than make an introduction. In those cases, you might pay the partner a one-time fee for each new customer they refer to you. Often, no money exchanges hands (this is how most of my company’s partnerships are). In cases where there are no fees for referrals, it’s probably a two way street, and you’re also going to be referring business to your partner, providing them with some other services, offering preferred services or pricing to their customers, and/or creating value for them in some other way.

At GuildQuality, around half of our new business comes from a diverse group of dozens of channel partners (I referenced some of those in a post about our beach heads). Our partners include consultants, building product manufacturers, trade associations, industry publications, and other software companies that serve our same market. Some are small, and send us only a handful of very high quality companies each year. Others send us far more, and the quality is spottier. Despite their differences, our very best channel partners share a handful of common traits that make us great allies for each other:

  1. Relevance. We have non-competing offerings and a significant overlap in our target markets. A meaningful percentage of their customers (greater than 25%) are the profile of company who would be interested in GuildQuality, and vice versa.
  2. Understanding. We each clearly understand what the other does, how we create value for our customers, and how we can create value for each other.
  3. Communication. We have a healthy dialog, and connect on a regular basis to make sure our relationship is mutually rewarding. This usually entails us sharing what our “picture of success” looks like. Perhaps that’s 50 new customers over the next year, or maybe its 100 inbound leads that site the partner as a source.
  4. Commitment. We share an understanding of co-marketing expectations, and we each execute on our commitments, i.e. We’re going to provide some compelling content for the partner to use in six of their newsletters; They’re going to promote our free trial to all of their customers three times a year, etc. Whatever the commitments are, we outline them in some sort of agreement at the start of the relationship.
  5. Empowerment. Our primary point person is empowered to get things done. This is sometimes an issue when our partner is a larger organization or association, and our point person regularly needs to seek approval from others in order to make commitments or initiate campaigns.

When I reflect on the common characteristics among of our great partnerships, those are the five things that come to mind. What do you look for when finding new partners to help you build your business?

Identifying our beach head

In GuildQuality’s earliest days, virtually all of our prospective customers came from my personal network of homebuilders, remodelers, and real estate developers. That network carried us to a couple dozen customers and enabled us to flesh out a real product that solved real problems and created real opportunities for quality-minded contractors. From there, we had to figure out how to expand.

Our first meaningful market expansion opportunity came via a referral from one of our earliest customers. They suggested we get in touch with a company that organized roundtables and provided consulting services for more than 100 design-build remodelers all over North America. 100+ companies may not seem like a lot, but it just so happened that these remodelers were among the most respected remodelers out there. Our relationship with this new network not only helped us to quickly expand beyond my 1st degree network, but it also helped establish GuildQuality as the type of service that exceptional companies choose to work with.

Not long after that, we developed similar relationships with organizations that introduced us to networks of homebuilders and neighborhood developers, and our customer base grew to nearly a couple hundred remodelers, builders, and developers. Around then, we began asking ourselves: What does a great GuildQuality member look like?

By “great”, we meant, “Who, when they learn about GuildQuality, is most likely to sign up pretty quickly?”

We settled on three characteristics:

1) They were a member of a network within which we had some reasonable penetration. This meant that they were likely to know at least a little about us, especially with networks that had a formal relationship with GuildQuality and who helped to market us to their membership. Building product manufacturers’ preferred contractor programs are the most common example of this sort of network.

2) They were in a geographic market where we had at least a few very reputable customers. This meant that they almost certainly had heard of (and respected) some of our customers, and were more inclined to give a salesperson the time of day.

3) They were the type of company that was interested in technology solutions that could help them improve their business. Back then, this meant that they had a website, though today that standard has risen a good bit.

We found that if they matched any one of those three characteristics, there was a decent chance that they’d sign up. Two out of three meant a very good chance. Three out of three meant they would almost certainly sign up.

We used those three characteristics as our beach head, and spent almost all of our sales and marketing efforts targeting companies that matched at least two out of three.

To this day, those three characteristics are still excellent indicators of whether or not a company will be interested in our service. And as our membership has grown, our networks have grown, and the percentage of contractors who are investing in technology solutions has grown. That means there are now considerably more companies who are hanging out on our beach head.

CRM for SMB: Weighing our options

A few days ago, I posed this question, via Twitter and emailed a similar question to about a dozen business owners:

Who do you use for CRM? Especially interested in hearing about Salesforce alternatives with strong funnel reporting for 10+ person teams.

I received a ton of feedback, and many people asked that I share what I learned. We haven’t made a decision yet, but we’ve done a bunch of due diligence, and here’s my preliminary summary.

Some background:

We’re presently running’s Group Edition, and our license caps out at ten users. We’re bumping up against that cap now, and need to make a change in the not-too-distant-future.

We’re presently paying $950 per year for up to 10 users. I don’t know where that pricing came from, but we’re pleased to have it and feel like it’s a great deal. We do suffer some inadequacies with the Group Edition, chief among them are no support for third-party integrations and no access to our data via the Salesforce API.

To eliminate those inadequacies, we’ve planned an upgrade to the Professional Edition when we hit our 10-user cap. The time is nigh, and a few things are causing me to scrutinize the decision to renew with Salesforce: Continue reading “CRM for SMB: Weighing our options”