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When is a Tech Partnership a Waste of Time?

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Let’s pretend several of your customers are asking for you to have an integration with a new SaaS product they saw on Product Hunt. We’ll call it “FancyTool.”

Screen Shot 2019-10-01 at 1.25.07 PM

As a result, you propose a FancyTool integration, wrangle your development resources to connect with its API, and after weeks of work you have an integration.

Excited as ever, you send an email to all of your customers, make a game plan for your customer success managers, and wait for the installs to come. But then… nothing happens. Barely anyone uses the new integration.

Turns out, only a tiny number of your customers actually used FancyTool. Your data was limited and your hunch was off. You just wasted weeks of development time to build something no one is going to use. And your team is fuming at the wasted time. Bummer.

With the wrong data, building a new SaaS technology integration can be like throwing darts. So how do you know which integrations will resonate with your customers and, more importantly, result in increased retention? You do a little research.

The benefits of SaaS Tech Partnerships

As a partnership manager, the playbook you’ll use depends on the type of overlap you have with your partners. If you both have a list of customers, opportunities, and prospects there are several options available. Here’s a quick guide to some common examples:

A 3x3 chart of partnership benefits

A very basic form of partnership is sourcing the list of shared customers. This is done by “matching” your customer list with theirs and finding overlap. One of the most common next steps is an Integration Adoption via a Tech Partnership (the highlighted top left square in the above chart).

A “Tech Partnership” is the act of:

  • Agreeing to create the integration with a partner.
  • Completing a technical buildout of the integration.
  • Writing all of the support documentation for both companies.
  • Writing all of the marketing language and material for the integration.
  • Reaching out to shared customers and encouraging them to integrate two products as part of the same workflow.

Examples include:

  • Salesforce integrating with Quickbooks to sync sales team and financial team numbers.
  • JIRA integrating with InVision to sync the design and development workflows.
  • Mailchimp integrating to Twitter to automatically share all new newsletters as a tweet.

In many cases, it is a smaller company that is plugging into an Application Programming Interface (API) of a bigger company. For partner managers, a Tech Partnership carries a few benefits:

  • Stickiness. By integrating your product with another, you are making your product more “sticky” or essential to the customer’s workflow. It’s hard for a competitor to replace you when your product is integrated all throughout the business. When your product is integrated into a customer’s workflow, it becomes more likely to be used, more likely to be advocated for, and is less likely to “churn.”

  • Revenue. Depending on your pricing strategy, turning on an integration for a customer may increase the number of teams that use your product and result in additional revenue. For example, Slack’s enterprise grid plan charges on a per user basis. If Slack can serve the sales team, marketing team, dev team, and design team’s workflows, it increases the likelihood that the customer buys more seats. And as a partnership manager, you would get some much-deserved and measurable credit for that revenue!

  • Product focus. A good tech integration can fill gaps in your product’s features. Without tech integrations, your product team would be forced to develop a jack-of-all-trades approach, rather than a focused piece of software.

  • Co-selling. After an integration is in place, you and the partner can approach new opportunities together. You have customers they want. They have customers you want. And you now have new leads that want you both. After all, the integration proves you’re serious about supporting one another.

How to determine you are ready for a Tech Partnership

Tech Partnerships are only possible when two or more companies have a shared customer and are usually the result of lots of work by both development or platform teams. Consider that you’ll need to…

  • … wrangle expensive technical and design resources.
  • … test and write support documentation.
  • … train two sales and customer success staffs.
  • … create go to market strategies, events, landing pages, email campaigns, etc.

A successful Tech Partnership could easily cost tens of thousands of dollars of time and resources. It can be a colossal waste of both to work on an integration and market it that is underutilized or leads to Tech Partner Conflict.

You can avoid that nightmare scenario by making extra sure that the integration is worth the work.

First, you’ll need a list of your shared customers. To do this you’ll need to “map” your accounts. We wrote a definitive guide to the process of account mapping, but it means getting a list of your customers, a list of your partner’s customers and finding where they overlap.

You can do this using spreadsheets, or you can easily do this if both you and your partner are in Crossbeam—and you can do it using the free account.

comparing one integration partnership in Crossbeam

 

In the above example, let’s say you and your partners service local small businesses. So let’s compare your active clients to the Michael Scott Paper Co.’s small business accounts. The result is 813 companies we should target for tech integrations. That’s 49% of your customers!

Next, we suggest reaching out to your customer success managers (CSM) and validating the idea. They are speaking with customers each day and may have additional context that a simple overlap won’t reveal. If your business isn’t as high-touch, you can skip this step.

Now you have the qualitative data from your CSMs. You have the quantitative data from your account mapping and you have research that suggests the power of tech integration. You’re ready to make a bulletproof case.

Comparing two (or more) possible partners

We know that Michael Scott Paper Co. has 813 shared customers. But let’s pretend that we just had a meeting with a new potential partner, Sabre. We only have the bandwidth to create one tech integration this quarter. Which one should we focus on? Sabre or Michael Scott Paper Co.?

You need to find two numbers:

  • The number of your customers that are also customers of Michael Scott Paper Co.
  • The number of your customers that are also customers of Sabre.

You could gather three separate spreadsheets and compare. Or you could drop them all in Crossbeam.

 

Animation in Crossbeam comparing two potential partnerships

 

The higher of those two numbers is likely a better use of your limited resources. Keep in mind, however, that not every customer is created equal and the exact logic depends on your business model.

For example, landing two or three six-figure contracts is worth more than hundreds of $99/year subscriptions. (Note: To view that next level of record detail, you’ll need the paid version of Crossbeam).

We see that you share 522 customers with Sabre. We know that those are all local small businesses, and likely the same potential account size. That 522 is not as much as Michael Scott Paper Co’s 813, so we’ll stick with our old partners.

A gif of Michael Scott from the Office yelling "Thank You"

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