Software Partner Programs Have Flaws

The overall idea of a software partner program sounds great.

Software Company A creates a magical product. They have 100 employees but suddenly they are getting hundreds of calls a day about software implementation, training, support, etc. Sales are flowing in too fast to handle.

But they have an idea! They create a Partner Program. The company can bring on "partners" to share the load so they don't need to turn away potential customers.

They share the profits (or should) of the recurring business coming in from customers and pass the leads to partners who get sales from services provided directly to the customer.

Win-Win.

On paper, but not always in reality.

Two men cheers
Photo by Wil Stewart Partners need to get along with the Software Provider.

But it never seems to work out that way. I've seen dozens of partner programs from large and small companies, and they have some common issues. Of course, there are some rare companies out in the world who have really done this well. I'm not talking about those rare instances.


1. Partner Selection

Who decides where the lead goes?

Assuming that every partner operates with the same requirements, then there could be a simple algorithm put in place. X amount of leads come in requesting services and then the leads are equally distributed to the partners based on capacity and current schedule of each partner.

But that's not how it typically goes.

You'll see the concept of Partner Levels. As a customer, you can work with a A+ Partner or a B+ Partner. Or maybe it's a Bronze, Silver, Gold Partner. Whatever tier structure the software provider decides on.

Every single customer wants to work with the top tier partners, of course. But the top tier partners are up there because they charge more and they typically have more experience with the software. Sometimes these partners get busy, or are too expensive so leads start falling down the tiers until another partner sticks.

This means that partners at the bottom often get nothing or low quality/angry leads who have been trying to work with a partner for months already.


2. Varying Quality

As leads fall down into "lower" tiers of the Partner Program, it's more likely they are going to work with a company that provides low quality services.

This is extremely confusing for a customer. If a product is good, then it should always be good, despite who has to come set it up and show you how to use it. It's the software providers responsibility to make sure that every partner fits the base requirements for providing a high quality service.

Unfortuantley many software providers leave that entirely up to the Partner.


3. Varying Pricing

Along with varying quality comes varying pricing.

This is more confusion for the customers. They have to figure out that they are paying one company for certain things like licenses, while paying a partner for other services. That partner will charge an hourly rate that could be 10% of the licenses costs or 500% of the license costs depending on the partner.

Then on top of that, costs typically change dramatically per service. Training can be different than development which can be different from maintenance.


4. Lack of Partner Training

This is typically the root cause of quality issues throughout a Partner Program. If each partner is not required to go through a standard training program, then who knows what type of service they are going to end up providing.

Many programs don't even offer extensive documentation and resources to a partner.


5. Lack of Partner Validation

I've brought up a couple of times in this article the concept of providing a base set of requirements.

Software providers often do not enforce any requirements on their partners. Then some providers may force initial requirements, but not recurring requirements.

A simple list of requirements that must be validated 2 times a year could fix many issues in Partner Programs:

  • Minimum of 1, on staff, certified implementer
  • Minimum of 1, on staff, certified project manager
  • Capacity and schedule evaluation
  • History of project success evaluation

This would force partners to provide higher quality, better services all around.


6. Outsourcing

Outsourcing is a tricky subject. There's great examples of outsourcing, horrible uses of outsourcing, and everywhere in between.

But I feel that outsourcing only works when there is a strong relationship between the outsourcer and the outsourcee. Each party must be on the same page, have the ability to coordinate, and each side must benefit.

Partner Programs for big companies introduce a huge amount of partners that only contain salespeople. Those salespeople work on selling as many projects and software licenses/subscriptions as possible to generate revenue from kickbacks.

Then all work is passed off to cheap outsourced development firms.

This is obviously not a great relationship between the two companies so customers get burned quickly.


These are a handful of flaws with modern Partner Programs for software vendors that cause customer confusion and often leave a trail of badly burned customers as the software provider scales.

If you are currently evaluating software vendors, be wary of Partner Programs in general and perform your due diligance to make sure that you are getting a high quality product. It's important these days for businesses to understand the quality of the product under the hood, especially with complicated software systems running mission critical operations.

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Thanks for taking the time to read this.

Holden
Founder, Buster Technologies

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