James Booker has led partnership teams at BigCommerce, Volusion, and Olark. We spoke to him about the biggest challenges in running a partnership program, e-commerce trends, and why quality is more important than quantity.
I originally started in e-commerce as a sales rep doing inbound and outbound sales. This was 2007, and I think Shopify had a few thousand customers, and Volusion had about seven thousand. Everyone in e-commerce was very small.
While doing sales at Volusion, I started working with agencies who wanted to resell our platform. A number of them were just customers who liked the platform and wanted to make more money.
We weren't specifically trying to acquire partners at that point. But we soon realized our top accounts were coming from these partners, and that partners could help maximize the value of the platform.
I became the first employee to work full time on partnerships. There were no app marketplaces then, but we did have a lot of inbound requests from payment gateways who wanted to integrate with our platform.
This was back in the day when no one had open APIs so our product team had to build these integrations. I ended up spending a lot of time managing those tech partnerships.
It has evolved to where most companies have teams focused specifically on tech partnerships and specifically focused on channel partnerships. They are different value props in how you work with these two types of partners, and having dedicated teams makes it more efficient, and they can get more refined in what they do and how they optimize value.
I have worked at four different companies and there were four different ways of organizing. Part of it just depends on your market fit. Generally, though, I think agency partnerships being under sales makes sense.
At BigCommerce, agency partnerships reports to sales, and tech partnerships is its own department. Tech is run by the Chief Development Officer (also known as a Chief Business Officer), who is part of the C-suite. It’s a unique structure, and it adds some efficiencies, but it can cause channel conflict.
In addition, the affiliate program is under marketing at BigCommerce so the partnership teams are dispersed through 3 different departments.
One of the chief things to figure out is the main goal of the tech partnership program. Is it to improve net promoter scores, fill a product need, or drive revenue? And is that going to be the goal in 5 and 10 years, and how hard is it to shift your program around later?
Once you decide on your goals, that will dictate how you measure success. Like in most things, if you directly drive revenue, you will be able to get more resources from within your organization, and from your partners.
At BigCommerce, there is a business development team who works closely with marketing to run different campaigns to promote the marketplace. Once you are big enough to have a platform and an app marketplace, whoever owns that has to sell the integrations to the customer base, and to drive installs.
One thing I have learned in tech partnerships is you rarely can control the full destiny of the projects. You really have to work with other teams to get results.
An important metric is driving more installs of third-party apps. When there is revenue sharing on new installs, this adds directly to the company’s bottom line.
You can also look at signups that might be coming from tech partners, but this is often hard to track unless they refer the customers directly over.
Filling feature gaps in your product does drive revenue but that’s often tougher to prove. In order to show a direct line to revenue, you have to demonstrate that customers would not have bought otherwise. Unless there’s been lots of requests and pent-up demand, and support tickets, that is difficult to demonstrate.
Some companies are product driven, though, so it depends on the company. Are you a customer-first company? How are you customer driven? When it comes to tech partnerships, what are you trying to solve? Are you improving the product experience and its capabilities?
Technology partnerships are an extension of the product and engineering team. But it takes a certain type of company to understand that value. Most partnership teams are trying to drive some direct revenue link.
Develop a good understanding of which integrations your customers are asking for, and have a good pulse on your industry. Know which companies are up and coming, and get that diamond in the rough partner before anyone else does.
Proving value is one. It is difficult to not only find the right partners, but figure out which ones you will be able to prove bring value.
Repeatability is another. What works with tech partner A might not work with tech partner B. Sometimes a campaign that drives a ton of installs with one partner falls flat with another partner. You have to be constantly thinking about what might bring you the next homerun.
Prioritization is a fundamental challenge. Given all the options and uncertainty, how do you prioritize your efforts?
Once you have chosen your tech partners, you have to remember that you only have so many touchpoints with your customers - usually an email blast, newsletter, and social. You need to make sure you segment well so you are getting the right message to the right people.
You can have dozens of partners wanting all those things but you can only send so many notices to your customers. You have to decide where you are going to get the most bang for your buck. If you send out an announcement but no one clicks, neither you nor your partner get much value.
It all comes down to motivation. You have to figure out what the platform cares about most: filling an important feature gap, driving new customers, or driving revenue. This takes a lot of due diligence as the smaller partner.
As the smaller partner, you're going to have to do more work than the bigger partner. They are getting propositioned by dozens of apps every day that are similar to yours. You have to build the integration, do co-marketing, and anything else that makes their job easier.
You should provide them proof that you are actually a viable company - show them customer logos, and your funding. Demonstrate you are eager to play ball and have all your ducks in a row. Practice with smaller platforms first to gain traction. Big companies don't want to be guinea pigs for you to prove your value.
Lastly, have awesome technology that just comes off as effortless to use. Your presentation and demo should work very well.
When I evaluate a potential tech partnership, I will generally pull in a more product-oriented person to evaluate the integration. The tech partner needs to show their desire to make the integration better based on feedback.
If you can say that your integration is on parity plus one because it has other features, and your API is better and you support it well, then that’s going to help you sell your product. That’s going to win over the platform much quicker.
The unfortunate secret is that most tech partnerships don’t work. It’s not for lack of value or effort. There are so many different technologies out there, and they aren’t as successful as one would think. You go out to market, and then crickets - customers don’t actually care.
In order for tech partnerships to work, you need a very keen eye on what each company is bringing so that you can communicate that to customers. You need to have a strong understanding of how customers are using the product and what they are looking for.
Do as much research and due diligence as you can, and if things go wrong, try to pinpoint why. Was the messaging off? Was it the wrong CTA? Was the integration too difficult to implement?
The most challenging partnerships are ones where you have to teach customers that they have a problem they don't know they have. Many merchants, for example, don’t know what cross-border shipping is, and you have to explain it first, and then sell them on that solution. That’s going to be a more sophisticated campaign.
If a partnership doesn’t work, dust yourself off, and move to the next one. They can be difficult to get right. You should celebrate the ones you do win.
You have to understand your customer base. If you are mid-market or enterprise, a newsletter is not going to drive anything. They are not going to click on the newsletter and buy a 10k solution. For the higher end, webinars are great. Just understand what audience you are marketing to.
Talk to your marketing department to find out what works generally. I like to ask the partner what works for them - they have experience with their customer base, and I can translate that to mine.
In partnerships, some people are more salesly, and some are more product oriented. But relationship building is always important. Not just externally, but internally. A lot of the job is being able to motivate other teams to help you achieve your goals.
You have to get other teams to do projects for you even though it isn’t in their bottom line or performance metrics. They need to like working with you.
Lately, we have seen a lot of merging and consolidation, especially in marketing technology. SMS and email used to be functions of separate technologies, for example. Now you see many companies doing both, and becoming marketing automation platforms.
This is similar to the back office space where you used to have ERPs work with labels and printing tech; and now they are just building it in. Inventory systems are adding accounting. You just see a lot of consolidation.
In addition, some of the bigger platforms are trying to slim down whom they work with. Shopify created Shopify Plus in order to focus the market on the most valuable partners. They are consolidating how they work with others.
People have app fatigue. Companies are using dozens of apps to meet their business needs, and people are tired of using another app for every single thing they want to do.
Forming quality tech partnerships and strategic mergers with other tech companies can solve this problem by limiting the number of apps a company needs to use and still have access to the best-in-breed technology.