Understanding the SaaS Partner Program Dynamic in 2023

Handoyo Sutanto
6 minutes
September 14th, 2023
Handoyo Sutanto
6 minutes
September 14th, 2023

Why the Partner Program Approach is So Important to Businesses

Perhaps one of the most famous partnerships in history, the deal between former basketball player Michael Jordan and sportswear company Nike was a groundbreaking revelation in the sports industry and prompted a dramatic shift in how all sportswear companies conducted partnerships. A typical partner program before Jordan and Nike shook hands looked at selling the product rather than the individual, but after Jordan and Nike, companies saw themselves selling the individual that inspired the product- the promise to “Be Like Mike” in Nike’s case. And these partnerships aren’t just for show too: the Jordan and Nike partnership saw roughly $6.5 billion in revenue from inception to now- a slam dunk in every right.

Gif courtesy of GIPHY

As the name entails, partner programs see companies partnering with third parties for a connected cause, whether it’s for collaborative selling and marketing, or to simply advance each other’s steps towards their goals. Spanning across different industries and practices and offering different variations like SaaS partnerships, partnerships are an easy way for companies to access pivotal resources and markets, at a fraction of the cost of doing it alone.

Companies partake in partnership opportunities because of what they can offer to both parties. Depending on the terms of the partnership, the incentives that partnerships can provide include:

  • Cross sales and cross marketing opportunities
  • Technical services and consulting
  • Fiscal incentives, discounts, and sales-based commissions
  • Entry into different regional markets and audiences

For many companies, especially startups, partnerships can be the first step towards steady lead generation and entry into a new market, providing opportunities to build relationships with companies and founders that have similar visions. And with so many different partnership types out there, the idea of business partnerships is truly something that many people can grasp onto.

The Different Types of SaaS Partner Programs

At Lyrid, our Constellation Partners are split up into four separate categories: data center partners, technology partners, consulting partners, and training partners. Based on their partnership type, potential partners receive different benefits, though with the certain standard benefits being offered to every partner. That being said, the average SaaS partnership program offer these types of partnerships:

Reseller Partners 

A reseller partnership entails third parties receiving license to resell your software on their own channels. Great reseller programs would see representatives from both parties being able to help with the selling and installation of both software, provide customer support, and increase market reach for both companies.

Integration Partners

Integration partnerships see non-competing software companies integrating software products with each other’s, Both software are featured on both platforms and act as cross-marketing for each software. Successful usage of software from each side usually results in earning commissions. 

Affiliate Partners

Affiliate programs place software companies with parties that excel in lead generation, with the average affiliate partner being agencies, content creators, and other software companies. Tasked with creating marketing materials and driving leads, affiliate partners direct traffic to the software’s original website and encourage purchase, usually in exchange for a commission.

Referral Partners

As the name suggests, referral partners are partners that you have already worked with and are well versed in your software ecosystem. These partners are tasked with referring your software to others within their network, and while the sale might be slower, the leads are usually of better quality. Referral partner programs are powerful in finding potential long term customers. 

The types of SaaS partner you host largely depend on your software offerings and current goals, though there’s no doubt that there’s a partnership for everyone interested.

Text describing the different types of saas partner

The Challenges and Outcomes of Partner Programs

Any new business initiative is bound to come with a new set of challenges - especially when it comes to working within the SaaS field. Here are some of the challenges you can expect when starting up your partnership program:

Potential Business Partner Conflict

One of the most important things to look out for when finding a partner is finding a company that doesn’t conflict with your current business goals, objectives, and services and products. While the SaaS world is wide, there’s only so many services that can be created, especially within a certain industry. This idea extends towards your partner dynamic: I prefer to build close relationships that are based on fulfilling the visions of both parties rather than strictly business partnerships, though your partner may prefer something different. At the end of the day, you’ll be working to accomplish a shared goal with another company, so symbiosis is important. But remember, not everyone in a partnership will come out happy.

Pricing Difficulties

The meat of a partnership is the pricing and incentive structure. I’ve found that pricing is the hardest part of establishing a partnership - incentives are different from company to company and finding a win-win solution is my top priority when creating these incentives. Pricing becomes easier if you're honest and sustainable with your pricing, but this comes from an understanding of what both you and your partner need to bring to the table in order to service each other best. 

Establishing Trust

In an industry dominated by key players, finding companies to partner with you can be difficult, especially if you don’t have any prior credibility. Building trust and credibility in this industry is hard, how can you first build trust if no company has worked with you? Trust requires time and effort- if a company decides to put their service in your hands, be sure to dedicate a lot of time and effort to best servicing them.

While these challenges can certainly hamper a company’s ability to engage in partnerships, the outcomes of partnerships provide enough incentive to pursue this strategy. The shift to a channel partner strategy can result in: 

  • New sales opportunities and boosted market reach, thus resulting in increasing revenue
  • Stronger brand presence and industry credibility
  • Reduced costs in exchange for more powerful solutions
  • Powerful, long term relationships with like-minded individuals

And so much more!

The Best Partner Programs Require Balance and Understanding.

In all aspects of a successful partnership, establishing balance should be the top priority. From finding a win-win solution for pricing, to balancing out the time and effort allocation to establish trust, balance is a key component when it comes to partner programs. At Lyrid, our partner programs establish a balance between business and a casual partnership- we want to create something that’s sustainable and doesn’t actually feel like a partnership, but rather a meeting between friends. 

While pursuing a partner-based structure can seem time consuming, building relationships with certain people and projects are absolutely integral towards growing your business. We work towards establishing partnerships that can help grow both companies and platforms involved, not just to encourage sales. And this is especially achieved through our comprehensive partner ecosystem, where our partners are able to reach others if their services are needed, encouraging connectedness.

That being said, building a partner program might not always be the best move for you.

Building a partnership program requires you to understand where your company is within your ecosystem and what the market needs and how it works. To establish and expand a partner program, you should first ask yourself these three questions:

  • Who am I helping?
  • Who can support me to sell my solutions to people?
  • How can I help the market I want to enter?

Understanding where you stand in the market and finding balance within your partnership initiatives can help propel your partner efforts forward, though at the end of the day, it’s all about how you want to conduct business! 

Words from a CEO Creating a Technology Partner Program

Cultivating Lyrid’s partnership efforts have been one of the most daunting tasks we’ve faced, though the relationships built certainly paid off. While partnerships come in all shapes and sizes, I personally like to strive towards those that pair people with people, something more human based rather than business and sales based. Our Constellation Partners program tries to pair partners with people, marketing and sales, and engineering teams as often as possible - we try to understand businesses as much as we can and create solutions that benefit both parties.

A partner program can be a powerful asset for your business and can increase your revenue and market reach drastically if conducted correctly. If a partnership strategy is in your cards, be sure to think about your current business goals and vision in-depth, a partnership without a vision is just a school project.

If you do want to learn more about our current partner program or even partner with us at Lyrid, feel free to book a call with me! I'm always interested in learning about how we can expand the ecosystem!

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