E-commerce Partnerships: A Conversation with Leaders from PayPal, SAP, Omnisend, and Crossbeam

Kelly Sarabyn

We hosted a roundtable discussion to discuss everything e-commerce partnerships: the state of the market, KPIs, barriers to entry, emerging areas of growth, and best practices around finding and optimizing partnerships. This is the transcript of the conversation. You can also download the video here.


Cristina Flaschen: I’m the CEO of Pandium. We’re excited to have 4 experts in the e-commerce space with us to discuss trends and best practices. I’d love to intro our panelists. Vanessa, can you kick us off with a little about your background and what you do at SAP?

Vanessa Liu: I oversee SAP.iO Foundries of North America. It is the early stage venture arm for SAP, and the “small i big O” stands for a small input that leads to an outsized output. We’ve been around for about 3 years, and we work with tech companies in the enterprise landscape.

We have a fund where we make investments typically in the seed and Series A stages, and we have 8 accelerator programs we run around the world, and all of these are no equity and no investment programs and are in the areas relevant to SAP and our customers.

We usually do specific themes, and we’re currently running a retail tech cohort out of our NY office and we’ll be doing a COVID-19 recovery cohort around retail, automotive, and manufacturing in the fall. E-commerce is a big topic for us and our customers. As an example, we run the backengines of Nike and Under Armour.  

Sean Blanda: I am the director of content at Crossbeam. We are a Philadelphia based company, and we kind of act as a data escrow service, and we allow companies to find overlapping customers and prospects with potential partners while keeping the rest of their data secure. We avoid the prisoner's dilemma where it’s like, “You share your list,” “No, you share your list,” “No, you share your list.”

We make account mapping faster, and we help surface revenue. My day to day role is interviewing partnership managers and leaders about best practices and KPIs, and we release a bunch of surveys and data to help partnerships people do their job better.

Richard Gilbert: I’m at PayPal, and I focus on strategic integration partnerships. I have been doing partnerships for 15 years now, and one of the things I love about PayPal is how core partnerships are to the DNA of the company. Ever since it has split from Ebay, it has really focused on partnerships to open its network, create new banking rails, open up relationships with the major credit cards, and also at the platform level worldwide.

I’m on a 70 person, worldwide partnership team focused on managing our partnerships, which is driving more and more of the revenue. I focus on system integrators and web agencies, but effectively anything below the platform (the platform being SAP Hybris, Magento, Salesofrce, or even BigCommerce). I focus on the players that are in the ecosystem below the platform, which is app developers, web agencies, and plugin providers.

Jon Pruitt: I am VP of Partnerships at Omnisend, which is a marketing automation platform for online retailers. ‘Omni’ stands for omnichannel so we’re working across email, SMS, push notifications, and ultimately helping our customers provide a more personalized message to their consumers to drive more conversions and higher open rates.

Prior to this, I was at BigCommerce and Bronto, all on the partner side of things as well. I have a lot of experience in the e-commerce ecosystem and am passionate about it.

Evolution of the E-commerce Partnerships Market

Cristina: Thanks for taking the time to hang out with us. To kick things off, Sean, how have you seen e-commerce partnerships evolve over the last few years?

Sean: I’ve been staring at partnerships for the last year and change, and one thing I have noticed is the oscillation between consolidation on single platforms versus an open API, lots of plug-ins, very modular systems. Different parts of the ecosystem are taking different approaches. Generally, we’re seeing people move to the open API side, plugin model. I’d be curious what the rest of you think.

Jon: When I think about the evolution of the realm, I don’t disagree. Folks are taking different approaches depending on where they sit. If you look at the top of the ecosystem, you have these e-commerce platforms and we talk a lot about the commercially available ones, like BigCommerce, Magento, and Shopify.

Richard Gilbert, Head of SIs at PayPal

When I look at that, in order to be relevant as a third party technology, you definitely have to have integrations with the major players if you’re going to go after that customer base. It's very important for us, for example, to have robust, easy to use integrations. We’re often tying into their APIs, and some are a lot easier to integrate with than others.

And I think platforms are trying to make their APIs more accessible and easier to integrate with because ultimately we help make them successful as well. A lot of BigCommerce’s growth was not just revenue from subscriptions, but from other parts of the business, like revenue share from partners and processing.

The more third parties you have and let integrate, they are going to help drive more revenue, make the platform more successful, and give the agencies working with the platform more tools to help their customers. It’s been pretty amazing to see the data that not only folks like Omnisend but personalization engines are able to capture these days to help drive more revenue. So with more open APIs we definitely see an increase in engagement and personalization across all channels.

Richard: So you can probably tell from my gray, I have been in e-commerce a long time. I actually was in the e-commerce days back in 1997. Those were the early early days, and I can juxtapose how e-commerce companies were successful back then to how they are now and build a bit on what Jon just said.

We are in an API-driven world, where technology and partnerships are really forged through integrations to create more value for merchants with these different technologies, whether it be data driven or functionality driven.

Back in the day, a lot of the partnerships were just affiliate partnerships, which just drove traffic on to the site. Because back then e-commerce was all about driving as much traffic as you could and trying to get conversions as best you could. So I think that’s an interesting historic view of how things have evolved from the early days of e-commerce to where they are now, which is much more technology and integration focused.

Cristina: Vanessa, I am curious given your experience at SAP, how you think about this since large systems have not traditionally been about interoperability but a lot of enterprise companies are starting to move that way and open up.

Vanessa: I think that tradition that Richard was just talking about is true, that the focus of partnerships is very technology oriented. At SAP, we have systems around for 40 plus years, primarily on prem, but now we are shifting to the cloud.

And also what we’re finding is our customers are looking for innovation. We know as SAP we are not going to be the only shop they are going to work with, and the onus is on us to help them find innovation partners to work with so that is our whole approach.

Jon Pruitt, VP at Omnisend

Particularly from the start of ecosystems, it is our priority to find companies that have incredible point solutions that we can add on to our platforms and our products. Once they are integrated, our customers can access that. So when we are working with a Nike or an adidas, we can say, for instance, “Hey you know this 3D commerce solution you were looking for, we know it is not on our roadmap, but we found a partner that can do that and they are now integrated into the SAP systems so you don’t have to worry about the integration, and you can access that innovation through us.”

So that is really a big part of the SAP strategy now.

Different Types of Partnerships

Cristina: That leads into another question. What are the types of partnerships that are the most important in the e-commerce space? What do you see as most important now and leading into the future?

Jon: Piggybacking on what Vanessa and Richard were saying, years ago, it was all about traffic, traffic, traffic, but now it is about how we can change the shopping experience for the consumer.

I don’t know any e-commerce platform that can do it all on their own. So when you think about it, they need the basics, they have to communicate with their customers, whether it is an email tool, Facebook messenger, or Instagram shopping, that is a baseline type of partnership. Then you think about adding more revenue with more point solutions, putting a personalization engine on top of that that is going to change the way you communicate with your customers and change the site experience.

It's really important that the platform is layering these solutions on and is ultimately helping the merchant be more successful and give the consumer a better shopping experience.

The way I like to think of the e-commerce ecosystem is as the solar system, and the platforms are the sun and there are all these rotating planets and moons around that. Oftentimes when I look at it I need to integrate with platforms, and point solutions. And I am continuing to work with agencies.

So these agencies are digital marketing, system integrators, and these are just as important as well, as they are making recommendations, doing best practices, and we have to educate them just as much as the merchant. Oftentimes we are seeing the digital marketing agencies as the ones who are pulling the trigger on behalf of the merchants. We haven't mentioned agencies much but that is still a key part of the ecosystem.

Richard: To build on what Jon said, that’s my role, I work with agencies directly and we recognize they are the trusted advisor for the merchant.

More holistically, partnerships are all about customer and merchant success. Point solutions might help the merchant create a higher AOV, convert the customer altogether or bring back customers for repeat purchases.

From the platform perspective, it is making sure they have as robust an ecosystem as possible, ensuring they have the point solutions and the agencies to provide them with a holistic capability, or, I should say, a more customized capability for each of those merchants. Each merchant is going to have their own strategy, customers, and product that they are selling, and each of them needs to essentially customize those solutions on top of the platform to generate the success they want.

How Smaller Startups Should Approach Partnerships

Cristina: To follow the revenue conversation, Vanessa, since you work with a lot of early stage companies, how do you think about the balance of building something versus partnering with someone who already built that point solution?

Vanessa: The companies that we work with are a little bit more mature in that they have a product in the market, and at least a couple enterprise clients, but it is still early days. And it's very much for them about taking good stock of what resources they have and to be able to allocate it effectively.

And when we are talking to them about chasing different opportunities and revenue, and how do you manage leads, part of the biggest thing we do is help them manage that. Because not all leads are the same, and you can get so many false positives when you are talking to large enterprises in particular. You can have great meetings where you come out feeling like a million bucks, but then you say, “Wait a second, what are the next steps? Are we in front of the right people?”

We always talk about getting in front of the right stakeholders, the ones that truly have the purse strings, and to balance that with considering what’s in it for them.

It’s interesting now that we are 3 years into our cohorts, and in the beginning, we didn’t really emphasize integrations, we said that’s a nice to have if you think that makes sense for you. Now all the companies coming in realize integration is key.

In our field, for example, we have the keys to over 400k customers, but you have to think about what is going to get the field excited on your behalf, and the way to do it is to give them commission. And the way to do that is to get on a third party app marketplace. So just thinking about what is in it for each party. Thinking about what is in for each party is incredibly important to drive toward a successful e-commerce partnership.  

Cristina: Sean, you talk to partnership people all day long. Do you have any advice for smaller companies in trying to get in front of the right person at a larger company like a PayPal or an SAP?

Sean: I have two themes of advice, and I’d be curious what the practitioners here think. One is get it in writing, and that doesn’t mean to force it to contract. But we all have a friend who we pass on the street, and we say we should get coffee sometime, but then you never put it on the calendar or meet up. I hear partnership meetings described that way. That they have great meetings but then there is no follow up. So being comfortable forcing the issue.

Vanessa Liu, VP at SAP.io

The second bucket I have heard is as the smaller partner you will have to be willing to do 10-20 times the work. Partner managers especially green ones think that every partnership should be 50/50, otherwise you aren’t pulling your weight, but veteran partnership leaders know you have to go above and beyond again and again to start to get the attention of some of these bigger companies.

Richard: It’s a good point that Sean makes. Coming from a bigger company, getting my attention is really important. My attention is pretty diluted. People often say when you think about partnerships, how do you manage them? Sometimes I equate it to a Labrador Retriever with 12 tennis balls in a room; which one do you pick up? I can’t take credit for that one, but it speaks to my ADD, and my lack of focus.

What I have found successful for smaller companies that have approached me is they usually come with a unique use case or something strategic or very interesting that is just different.

At PayPal, we are doing a lot of experimentation with contactless payment, QR codes, and with BOPIS (buy online pickup in store). There are payment use cases associated with that. Gift cards are another one. There are merchants who are shut down and are trying to create some revenue, and create some store value with a gift card.

A lot of these different use cases have come over my dashboard, and I’ve taken a look at them, and they are interesting because they are solving a problem right now, there’s a need, and they are strategic. But that in essence is one of things that would garner my attention more as a bigger company, is identifying something that is unique, solves a pain point, and I can jump on quickly.

Also to Sean’s point, the smaller partner has to write the statement of work, and do the proposal. I will review it and channel it where I can, but I require the smaller partner do the heavy lifting.

Sean: I have had people describe it to me as “make it easy for them to say yes or no.” Literally tee it up for them, and explain the KPI and use case that we know you care about, and here is all the paperwork.

How to Best Pick Partners and Judge The Success of a Partnership

Jon: I actually have a question for you Richard. You’re at a large company, how do you balance the “oh, this is really cool” with “this is really going to move the needle for our customers and partners”? I think that is one of the challenges we all run into as potential leaders, and people who are listening in probably have the same issue.

Richard: I would couch that as, “How do I judge the success of partnerships?” And I agree that can be a challenge.

From my perspective, or from PayPal’s, we just look at the sheer numbers. If it is going to drive a lot of new merchants, or TPV (total processing volume), which yields revenue for us, those are obviously very important drivers for us, and how we think about the prioritization of partnerships. I will say however, a secondary filter I will use is level of engagement.

And the level of engagement can be things like co-marketing initiatives, assuming the partner is going to do the heavy lifting, and being able to attach the PayPal brand to some of these value-add initiatives, whether it be a white paper or webinar or social event to drive merchant activity and merchant opportunities.

And then the other element would be any unique use case. Is there something really interesting that the partner can bring to my attention and be really strategic and drive a lot of interesting opportunities? Maybe exploring new verticals that could potentially explode. They tend to be more moonshots but there might be an opportunity through a particular partnership to expose a brand to a new vertical.

I’m looking at one right now that has a lot of friction associated with it, which is online alcohol distribution, obviously a popular topic today. In the online world, especially if you are a distiller, selling alcohol is prohibited, it needs to be done through a distributor. So how you get these distributors to work with these brands that are trying to build a DTC strategy is complicated. But if we can figure out how to navigate the regulatory and risk hurdles and come up with a scalable solution, we could effectively replicate it for every one of these designer tequila and bourbon brands that are out there.

Cristina: We have been talking about judging the success of these programs. Sean, I’d be curious if you have any thoughts about tooling around tracking success? The KPIs are a little murky in this space, especially for smaller companies, but also the ability to track and report on those KPIs.

Sean: Crossbeam was founded in this very notion of more data driven partnerships. Especially tech integration partnerships, a lot of the best practices haven't caught up to the tools. Just vetting partners, for example.

Sean Blanda, Head of Content at Crossbeam

One way is strategic partnership but another is just looking at straight numbers, and seeing the number and depth of customer overlap and their possible market size. This allows you to pick your partners much more judiciously, and we are starting to see more people do this.

Then taking that co-marketing and co-selling opportunities and tying it back to your CRM like Salesfore so your sales team knows exactly what is happening and seeing what is happening to those leads. That is a workflow we are trying to facilitate and something we are seeing other people embrace.

Cristina: Following on to that, Jon, you’ve run technical partnerships at companies of all sizes. I’d be curious if there are any tools you have used, or whether looking back, you wish you had implemented a tool for something that turned out to be a heavy lift.

Jon: Integration partnerships are the hardest to measure. I think, Sean, you’re right, when you start evaluating there’s a big difference if you have 2 shared clients or 2k, and if it is a large number, that makes you think, ok, there is something here, and if we can provide one plus one equals three for these merchants, then it’s going to be a success.

One thing I've applied in the past is the idea of influence. It’s a little hard to manage when people are signing up on their own. But when you have a sales team, we would run into situations where a lack of integration was a dealbreaker, or if we didn’t have an endorsement from a third party, that was too. So we tracked this idea of influence.

It was a KPI that we had, and we tracked it pretty heavily. And when it came to co-marketing, we found we often wanted to do more with those folks who had influence and were influencing to close deals. They were helping bring and retain revenue.

We put a number of tracking mechanisms in our CRMs where our sales reps were recording, “Hey, I wouldn’t have won this deal if it wasn’t for this, or the prospect had integration requirements, or required endorsement from a partner.”

On the integration side, though, it is challenging to track. Sometimes you have to understand you have all these people coming to you wanting to integrate, and it can be hard to decide when to take the shot, and maybe it’s shared customers, or maybe it’s something that is going to help you retain or gain new customers.

Sean: We did a study of the KPIs that are used to evaluate partnership managers, and 45 percent are measured by influence. It was our third most common KPI after “partners sourced” and “leads generated by partners.”

Emerging Areas of Growth within E-commerce

Cristina: Vanessa, and I’d be curious what all of you think, what category of e-commerce SaaS companies do you anticipate seeing the most growth in the rest of the year?

Vanessa: All of our customers are asking us for solutions that enable them to see things from an omnichannel perspective. Everybody who hasn’t been investing that much in automation is now doing that in spades. They are thinking, “How do you engage the customer and make the experience extra special?” We are seeing a lot of demand for that. They know it is table stakes to have a very robust solution. What is going to get their customers to stay on their sites and apps that much longer, that is key, and how can you enable the support around that.

Related Content: The E-Commerce Ecosystem: Industry Trends and Best Practices

Richard: I totally agree with Vanessa. Obviously omnichannel has been something and it is even more of a priority today. But another interesting feature I am finding coming across my desk more and more frequently is building marketplaces, especially in the B2B space.

We’re seeing a lot of B2B companies that are inviting their distributors and vendors to sell onto their marketplaces, essentially creating mini-Amazons if you will for distinct verticals. The trend of marketplaces is only going to continue to grow.

It is an area that PayPal is actually investing quite a bit in. We were one of the first payment solutions for one of the first marketplaces, Ebay, and we continue to evolve our own platform to drive marketplace functionality both for B2C and B2B use cases.

Cristina: And Jon, you have Omni in your company title. What are your thoughts?

Jon: I’m just getting excited to hear everyone talk about omnichannel. I would agree. Even though this talk is not about what has been happening since late February/early March, there are a lot of businesses who are thinking about how to get additional distribution. They are trying to figure out how to communicate with customers, and they realize it has to be an omnichannel approach.

There are so many people with so much more free time on their hands, and you think about where they are spending their time, whether it might be on Facebook or Instagram. I’m sitting right here, and I have my phone, and I might get a text right now, and I am likely to read it.

It’s very important when there are so many people vying for the consumer’s attention to do it via all the accessible channels. People are on their phones and computers more. For example, I find myself working later, because i can't go out to dinner. You have to be able to communicate across all those channels. It’s self-serving because we do this at Omnisend, but if you have merchants who aren’t thinking about it, they should be. It’s not just email or SMS, it’s how can I communicate clearly and consistently across all these channels and why do they want to buy from me vs a competitor?

Barriers to Successful Technology Partnerships

Cristina: We do integrations all day every day here at Pandium, especially for B2B, and we do hear omnichannel come up over and over for support, sales, marketing, and even operations. Turning to an audience question: what would you consider the largest barriers to entry to technical partnerships?

Richard: Back in the day, documentation around APIs and API testing was always a mess. I think it’s gotten a lot cleaner and more straightforward with more rigor around documentation and QA.

I would say to turn the question around, more of the challenges are on the backend. Especially these platforms that build marketplaces for apps. The whole notion of “build it and they will come” is a farce. The app has to do more than just integrate and expect merchants to download it.

There has to be a more proactive approach to marketing and explaining that app so the merchant will have the desire and impetus to download and use it. So to me that is more of the challenge, it's not necessarily a technical challenge, it's more of a challenge around the general success and use of that app.

Cristina: You might also be saying a bit around the UX of the integration, and making sure the merchant can get the value out of that app. Vanessa, given who you work for, I’d be curious what you see as barriers and limitations to entry for tech partnerships?

Vanessa: When I am looking at it from the startup side, the technical barriers are around the multiple steps you need to take, and also frankly the resources you have access to. That’s why to the extent that startups can work with Pandium and likewise, it would be great, because limited resources and how you do that is a critical question.

I’m thinking about some of our startups and the biggest barrier for them is they are so stretched. How are they going to find the resources to do this? These partnerships come in so many different flavors, you will only want to do it once, so if you can get a specialty shop that can do this much faster, it will enable you from the team perspective to focus on your core activities.

Related Content: Advice for How to Tackle Technology Partner Operations

Sean: With partner managers I speak to, it is always who builds it and how do we market it? That they don’t market it to their entire audience who might not all be shared customers.

Jon: And Sean, maybe a plug for you guys and what you guys are able to do, I think identifying shared customers is a big challenge that a lot of partners potentially run into.

We all have partnerships with competing technology. If I have partner A, I probably also have a partnership with B, who is their competitor. And I need to be careful because I don't want to cannibalize that partner B, and don’t want to undermine a happy healthy relationship.

Part of it comes back to what Richard said about the backend and identifying who are the right people to go to. That is a challenge we continue to have as we have been building out our CRM and business function the last few months at Omnisend. And we’re getting much better at it but it’s a challenge for a lot of organizations who haven't been a partner-first approach in the past and they need to understand what type of data to collect.

Ecosystem data to me is key because that helps you decide who you should be integrating with and who you aren’t integrated to. If you’re seeing a trend, and you've got 50k customers and 6k are using one solution and you haven’t been able to identify that, then maybe it’s a problem.

So you have to be able to collect this ecosystem of what your customers are using as third party solutions outside you, whether it’s an e-commerce platform or a personalization engine. It could even be an agency, and you see an up and coming agency, and you say, hey, maybe that’s someone we should be partnering with.

Sean: My tiny plug is we just released today, we’re mapping the e-commerce ecosystem, both visually and so you can type in a company and see who they are connected to and see their partners. It’s very much a work in progress but it’s a nice tool if you’re trying to get a lay of the land, or eyeing a potential partner.

Cristina: It’s also very snazzy, too.

Sean: It’s fun to play with, even if you have no idea what is happening.

Cristina: Awesome, so we are right at time. If you have any additional questions or thoughts, feel free to reach out. And if you’re interested in learning more about integrating all the things, check out Pandium.  

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