Canadian writer Raymond Hull (co-author of "The Peter Principle") once said, "All marriages are happy. It's the living together afterward that causes all the trouble."
For most software companies, reseller partnerships are very much like marriage: Some are happy, some not so much, and very few seem to deliver on the initial excitement of courtship.
So, how do you navigate the "living together" part?
To get some practical advice about partner relationship management (PRM), we turned to Erich Flynn, CEO of TreeHouse Interactive, a software-as-a-service (SaaS) developer of a product suite for companies that sell through channels.
Founded in 1997, TreeHouse Interactive is privately held and completely bootstrapped. "We've never ruled out funding," Flynn says, "but never found a deal we found particularly likable."
The Draper, Utah-based firm has 30 employees. Flynn says TreeHouse's growth this year will be 30% to 35% over 2009, both in customer base and revenue.
"We have been profitable every quarter we've been in business," says Flynn. "In our market, there are companies that have taken funding in excess of $70 million and never showed a profit. In our little bootstrapped company we're pretty proud of the fact that we've done it all ourselves."
TreeHouse has three products for relationship management: one focused on sales, one on marketing, and one for partner relationship management. We were most interested in what goes into the latter, Reseller View PRM, and how it might translate to specific partnership tips for software entrepreneurs.
Tip #1: Create a partner portal.
"Leads, contacts, and opportunities do not a partner program make," Flynn says. "A lot of people are finding this out the hard way."
At SoftwareCEO we try to avoid product promos, but you might want to look at TreeHouse's system just because it, by definition, contains what Flynn thinks is necessary for a good reseller program. Thus, several of his tips represent things that are built into Reseller View.
Reseller View is essentially a ready-made reseller portal, with advanced document management and a partner locator, among other features; it integrates with salesforce.com or Oracle out of the box. Licenses start at $2,999 per month, regardless of the number of partners you're supporting.
Tip #2: Understand your channel's value proposition.
Approach this as a series of inward-directed questions, Flynn says:
"Why do they want to become your partner? How are you going to increase their revenue? And how are you going to increase their ability to deliver a complete solution? If you can't understand those questions, you're going to fail.
"I think you need to understand your product's competitive position in the marketplace, then take the time to understand the kind of partners you need, then talk to them.
"Ask them, 'What does it take to become one of your top vendors?' They'll tell you."
Tip #3: Automate...
"If you are going to extend your sales team, there are certain key tasks you need to automate," says Flynn:
"Each partner has to apply to you, and meet certain criteria," Flynn says. "If you're doing that manually, going out to interview each one, it will take a lot of time and cost a lot of money.
"It's a fishes-with-nets versus fishes-with-hooks kind of thing, and hooks can be a very expensive proposition. To the extent you can automate the application process, that will greatly reduce your costs."
b) Contract Management.
"When you're instituting a partner program, a few key documents are typical," says Flynn.
"They can be as simple as an NDA or as complex as a multi-page contract. To the extent you can automate this via digital signatures, you're going to save a lot of money.
"I had one customer who was spending 10 to 20 hours a week in legal -- just pushing paper back and forth."
c) Key Work Flows.
"These are all the day-to-day things involved with partner management," Flynn says. "Anything from delivering an automated 'I forgot my password' to a notification of RFPs.
"The whole key is to have the foundation in place so that you can scale to serve a lot of partners without a lot of staff."
Tip #4: Educate.
"I need to make sure they understand my product and can sell it and service it properly," says Flynn. "Partner education can also be automated, but I would put it in the enablement area.
"When your partners go into a sales situation, they're dealing with multiple vendors. They should come back to your portal and view the training on that particular aspect of your product before they go to that sales meeting.
"If they don't put it in the right situation or don't install it properly, it can actually end up being a negative proposition."