Planning Next Year’s SaaS Channel Strategy? Do the Math First

Sarah Elkins (00:00)
Welcome to Between Product and Partnerships, a podcast focused on bringing together product, partnership, and engineering leaders to discuss how to build, support, and scale SaaS ecosystems. This podcast is presented by Pandium, an integration platform for building native integrations.

Cristina Flaschen (00:18)
Hi everyone, and thanks for listening to our podcast between Product and Partnerships, where we talk about the challenges and everything it takes to build integrations, tech partnerships, and SaaS platforms. Today we're so excited to have Cheryl Stookes, channel strategy advisor and founder of Cheryl Stookes Go to Market Advisory join the podcast. Cheryl has spent 20 years leading revenue teams on both sides of

the channel with solution providers like SHI and Soft Choice and at vendors like AWS, Lenovo, and PE backed SaaS companies. Cheryl, welcome. You want to give the audience a little bit more of your background?

Cheryl Stookes (00:51)
Yeah, no, I think you covered it well. as I mentioned, I help SaaS companies and their partners sell together. What's interesting about my background is I have 20 years of experience on both sides of the channel. So I've worked on the partner side, but I've also worked on the vendor side. I've also been responsible for building the partner programs that vendors invest in and the one that invests in those programs. So it gives me a really unique experience and vantage point into working with companies when they're looking to build up partner strategies.

Today I primarily work with B2B SaaS scale-ups, typically in the 10 million to $100 million ARR range, that are building a channel motion for the first time, sharpening their motion, relaunching a motion. And I also work with the partners themselves because co-sale only works when both sides are working together.

Cristina Flaschen (01:41)
Awesome. I'm sure our audience is gonna love all of your insights. You're like right in our wheelhouse. So let's get started. So it's Q4, which is crazy. I can't even believe that, first of all, just to get that out of the way.

And a lot of folks are in planning, just wrapping up planning, heading into planning, and there's some sort of goal around figure out the channel.

What usually happens when channel becomes someone's job or their second job or their third job or the job of a department or something like that? What have you seen in your experience?

Cheryl Stookes (02:11)
Yeah, I see this happen every

year. So companies go into planning. There's usually a board meeting. Oftentimes, you know, an external consultant will come in and they'll work on product strategy and go to market. And somewhere it comes up like we need to figure out the channel, right? Which is this big, you know, hairy audacious goal that a lot of companies struggle with. And oftentimes what I see happen is it becomes someone's second job.

Well, what do I mean by that? So I worked with a guy named Eric Gales. He ran the AWS Canada business for about a decade. And before that, he ran Microsoft in Canada and he ran VMware in Canada. And he had this great line and he used to say, whenever someone's job says and partner, it will never work. So if it's sales and partner, if it's marketing and partner, if it's operations and partner, it will never work. So typically what happens is partner becomes someone's second job.

And almost by default, it's destined to fail. Because if you are a sales leader, which I've been for many, many years, and you have a number to hit, building a channel is an enormous lift. It's not something that you can just flip a switch and it happens overnight. And it also introduces friction into your sales cycle. So a lot of sales leaders they don't want to do that, nor do they have the background to do that. So it becomes the thing that happens after the number that they're actually measured on happens. So

typically what happens is if that person does take it on, they usually came up on the vendor side. Very rarely has someone worked on both sides of the channel. And they might design a program that looks completely reasonable on paper, but it actually doesn't work because they don't understand how partners make money and where that partner money lands. So these motions almost rarely fail on strategy. They fail because the person accountable just doesn't understand channel economics.

And then what happens is these companies typically go six, nine, twelve months. They realize that they have a couple of signed partners, but no real, you know, partner generated revenue coming in. And then they say, okay, now we'll hire a channel leader. And then that level of search typically takes three to five months, and then another quarter. So often what happens is eight, nine, 10 months can go by against a board commitment, and nobody is really doing anything intentionally with the channel. So

I see that more often than not, and that's typically when companies bring me in to help.

Cristina Flaschen (04:40)
That's such great insight. I could talk forever about this, but we've seen, you know, we work with technology partnerships specifically, typically, because

of the kind of work that we do at Pandium, but I've seen so many times companies be like, Yeah, like you can handle partnerships and it's this sort of like

it's this sort of like just add-on thing. And like sometimes the

person that takes it would really be great at doing it full time, but it's so hard, especially if they are

like a straight sales type person, it's so hard

to do both. Like that motion is so different, in my opinion.

Cheryl Stookes (05:09)
It it is it is difficult,

right? And another thing that Eric used to say is partner is everybody's job. So it's gotta be the entire organization's committed to partners. But I used to tell him before it's everybody's job, it's gotta be one person's only

Cristina Flaschen (05:23)
Mm-hmm.

Cheryl Stookes (05:23)
job. So they can wake up every single day thinking about building their channel. And that could be both a combination of technology partnerships, integrations, resellers, solution integrators, there's all kinds of partnerships.

Partnerships is such a broad term as well. So getting really clear on what does that mean when you say build a channel.

Cristina Flaschen (05:42)
100%. I agree with you too. There's so many different kinds of partners. And like each of everything you just described, each of those sort of categories of partners also has its own specialty in terms of the folks that manage and kind of spearhead those initiatives.

So we we talked offline, and I'm really I think the audience will love your eight pillars to assess partner motions. Maybe you can give us an overview of what those are and

where companies have a tendency to underestimate within those pillars.

Cheryl Stookes (06:11)
I appreciate the question. And so just a little bit of context. So typically when I come into an organization to help them build up the channel, the first thing that I do is an assessment. So this is intended to remove the emotion from the situation and to objectively look at a company's channel readiness against eight pillars. So those eight pillars are the value proposition, and that's two-prong. What is your value proposition to the partners themselves, but also your sell with

value proposition to customers, that better together story, your ideal partner profile, data and attribution, governance and rules of engagement, talent architecture, network health, and partner team infrastructure. And then last but certainly not least is post-sales and retention. So that was a whole bunch of words. So let me just put it in plain English. So it's why would a partner lead with you? And why would a customer buy with a partner and you together? Who are those partners?

How will you know what they produced? What rules stop channel conflict? Who on your team owns it going back to that one person's job? How healthy are the partners that you already have? What systems do they work in? And then what happens after the deal closes? Oftentimes I get asked, like, what is the most important? It's kind of like, you know, choosing your favorite kid.

I heard a great line, like, we all have a favorite kid, it just changes throughout the day.

but

Cristina Flaschen (07:34)
Mm-hmm.

Cheryl Stookes (07:34)
you know, for me, if I really had to narrow it down, it's gotta be governance and rules of engagement. Your sellers cannot be incented in any way, shape, or form to take a deal direct, whether it's higher commission, quota attainment, quota credit. If your sellers are incented to take a deal direct and you cut a partner out of your deal, your partner program will fail every single time, no exceptions.

And that can undo months, if not years, if not a lifetime of trust with a partner ecosystem, if you're perceived to be a vendor that undercuts the channel. So if I had to choose one, it would be that governance and rules of engagement and really ensuring that you're protecting the margin and partners that bring you opportunities and not cutting them out of deals.

Cristina Flaschen (08:21)
That is so interesting because as you were saying that, like what's the most important one?

Like my mind being my entire career prior to Pandium was like

sales engineering, but really post sales, like immediately post sales, was

the final one, which is like, hey, what happens after the deal is done?

And that is because like hammer nail situation, right? Like I just that's the world that I live in, right? And I've seen so many of these relationships spend so long in like the pre sort of papering experience. And then they start co-selling and they're closing deals, but then like there's no follow through, the integrations don't work, like

the sales teams are selling things that maybe don't exist with those capabilities. Maybe the tools don't actually work together that well, like sort of that side of it. And what I hate to see, again, this is from me where I've always sat, is like all of that work falling apart at the very end, right? Like

that I hate to see. But I totally, I absolutely hear what you're saying too, right? Like you're

seeing it on the front end, and I've always sort of been responsible for the other side of that.

Cheryl Stookes (09:28)
I think you're right, and that's probably the most overlooked element. Like what happens after the deal closes? What is that onboarding experience? What is the post-sales experience? Who's the first point of contact? Who's going to take the escalation? Who's going to do the implementation? Who gets paid on that? And then

Cristina Flaschen (09:45)
Mm-hmm.

Cheryl Stookes (09:46)
there's a whole other conversation, but what happens when it's renewal time? That's when things get really tricky. And oftentimes you see something get pulled direct. It's not always on the first transaction. Sometimes it happens on the renewal.

So it's a little bit, you know, making sure that you're thinking through from really from end to end, from pre-sales to post sales to renewal, expansion, all those things is really critical.

Cristina Flaschen (10:09)
I've seen so many companies that are hiring partner people before maybe they've even had a full renewal cycle, like in business. Like they're hiring a partner

person as one of their first hires. And like, how do you think about your renewal when you've only been out in market for 10 months and like you don't haven't had any renewals

yet? And kind of on that, on that note, you've mentioned that sometimes the answer to building the channel is that you're not ready yet. And I'm curious what that looks like, what size companies you see that?

with and how it is to deliver that message to like a CEO or a board or something like that after you've done this assessment.

Cheryl Stookes (10:50)
Yeah, I actually don't think it depends on the size of the company. For me, it comes down to the score based off of the readiness assessment across all eight of those pillars. And what I love about this approach is I'm giving you a score and a date, not necessarily sort of an emotional opinion, right? So the assessment is a diagnostic. It scores where a company is on each of these readiness pillars. So you're not ready becomes

these are the order in which to do things. This quarter, this is a roadmap. It's a roadmap, not a rejection, right? So what not ready actually looks pretty consistent. Typically it comes down to they can't clearly articulate why a partner seller would lead with you. Nobody owns it full-time. It's an and partner job. The comp plan punishes your own sellers for bringing in a partner. There's nowhere to track what partners actually produce.

So, a lot of the value that I provide to organizations that I work with is I simply tell the CEO or the board the truth. So it usually saves a lot of time and money and wasted investment so that we can start to build this the right way and make sure that when the company is ready to build a partner motion, they are ready and they're not gonna have a false start. So the way that I often frame it with a CEO or a board is

you're really protecting the investment. It saves you a year of program spend that sometimes can buy a logo on a big slide. And I know we're going to talk about that. and quite often I get asked to come in just to run channel economics workshops to help see executive teams as well as PE and some VC back firms and their operating partners really understand channel economics so that they can understand how long it's going to take for their investment to pay off.

In a way that is a little bit of a third party assessment, right? So that's a lot of the the work that I do.

Cristina Flaschen (12:45)
I can imagine that I hope this isn't true, but that there are instances where folks like disregard that. That'd be like it's you guys aren't ready yet. And they're like, forget it, we're gonna go do it. Like

Cheryl Stookes (12:58)
It's kind of like, we have two boys, they're twelve and ten. I imagine what it's like when you sort of like get your kids ready and send them off to college, like kind of knowing they're they're probably gonna crash the car, but that's okay, right? They gotta learn the lessons. But you do everything you can. I do everything I can to set my clients up for success and

if things veer off track, like we get things back on track, right? That's that's one of the the beauties of this industry is and one of my favorite lines is Brene Brown, I'm here to get it right, not to be right. So, you know, every mistake is an opportunity to learn and iterate and to grow. And your channel ecosystem is gonna be something that's constantly evolving, right? Figure out the channel is something that, you know, I've been trying to do for for twenty plus years and continues to evolve and learn.

We're kind of figuring this out together and your strategy is going to continue to evolve as the ecosystem evolves, as the technology evolves, as expectations of customers evolve. It's sort of never done, if you will.

Cristina Flaschen (13:55)
Yeah, and speaking of the technical side, which I could talk about forever. In your opinion, what needs to be in place on the product side from integrations, technical enablement, et cetera, before partners can sell and deliver on the channel? And I'm using there, but keep using the air quotes.

Cheryl Stookes (14:11)
Yeah,

the bar for me is pretty simple. So a partner engineer, pre-sales engineer has to be able to do a demo, run a proof of concept, and implement a solution without your team on every single call. Now it's not gonna happen right away, but this is where you want to get to, right? So in order to do that, first you have to have a compelling value proposition for the customer, or excuse me, for the partner, not just the end user.

Co-sell is is one of those things that's in improv language, it's a both and, right? you have to have a sell with value proposition, but you also have to have a sell-to proposition to the partner themselves. So one key thing is understanding your partners, understanding their core business, how they make money, and understanding what services they can wrap around your product.

There's a stat that Jay McBain referenced at the Partnership Leaders Conference and he's done it in his research before. I think it's over seven plus dollars in services margin for every product dollar that's sold. So understanding how your partners make money and how important services revenue is really important to winning over customers and and ensuring that pre-sales engineers are gonna be on board. The second thing I'd say is certification.

If your partner will not spend time certifying on your solution, you are not important to them full stop, right? And why is that important? Because a partner that is taking time out of their day to certify on your solution, that's time that they're not billing a customer. There's real opportunity cost for them to be doing that, and you're taking them away from certifying on another solution that they're responsible for selling. And then the third, and I know that you've got a lot of product folks that listen to this podcast, is

really understanding the integrations and working within the stack that a partner already works with. You don't want to create friction into their sales motion, their pre-sales motion, logging into all kinds of like wacky portals and jumping through a bunch of hoops in order to understand what you sell. The more that you can understand their sales motion and loop into it and the language that they use to sell with their customers, their value proposition.

And plugging into that language will help them just naturally co-sell in a better place. And then last but certainly not least is, and I see this all the time, is training your people first. Back to the story around partner being everyone's job. It's not just the channel team's job. It's the direct sales team's job. It's the frontline manager, it's the second line manager, it's finance, it's operations, it's post sales.

Your entire company needs to understand the channel, not just the channel team itself. I've seen so often deals that get signed and it's the partner team in the room and everybody high fives. But not only do the direct sellers and the direct sales leaders, frontline leaders, not understand or not part of those discussions, they haven't earned that trust, they haven't built those relationships, they don't understand even maybe why they're selling with the channel.

So a lot of the work that I do in addition to sort of those readiness assessments is channel 101 and 201 sessions for the entire organization so that people can understand what it means to sell with the channel, why it's important, language to use, language not to use, co-sale economics really from end to end throughout the sales cycle.

Cristina Flaschen (17:37)
Yeah, but what you said about getting certified and also like being able to to do demos

Cheryl Stookes (17:41)
Mm-hmm.

Cristina Flaschen (17:43)
really resonated with me. We've seen s I've talked to so many companies over the years that say like, we you know, we need an integration to like NetSuite, Salesforce and QuickBooks, whatever. But like we don't want

Cheryl Stookes (17:53)
Yeah.

Cristina Flaschen (17:54)
our team to have to learn how to use those tools. And I'm like, they're gonna have to learn how to, someone at your company is gonna have

Cheryl Stookes (17:59)
Yeah.

Cristina Flaschen (18:00)
to know.

Cheryl Stookes (18:01)
Yeah.

Cristina Flaschen (18:01)
If not

only to test this thing, or like if a customer calls and is like, I don't see my invoice in QuickBooks, like what I don't under it doesn't make any sense to me this perception that like, we don't have to learn how QuickBooks works. And that does that mean you have to become like a QuickBooks certified accountant? Absolutely not. But you are gonna need to have at least a few

people at the company that can log in. And I think the truth, the same goes for the inverse, right? Like if people, if other folks are building into you, like they should also know how your system works

at a basic level. Again, it doesn't have

to be that you're like a NetSuite admin, but there is like some amount of

to your point, like investment that I think

folks need to understand up front. Like you are going just reading the API docs is not going to work. Like you absolutely will need

Cheryl Stookes (18:45)
Yes.

Cristina Flaschen (18:46)
to know how this thing works. Also to be able to have credibility when you get on the phone with a company like NetSuite. Like,

Cheryl Stookes (18:51)
Mm-hmm.

Cristina Flaschen (18:52)
you want to be there like BFF and you want to be up with the big fish, and we'll talk about that in a second. Like, you're gonna want to know how that thing works and be able to demonstrate that you spent the time, right? Versus just get

getting the phone and being like, Yeah, yeah, we want to be your premier partner. We're a ten person company and we deserve it.

Cheryl Stookes (19:09)
That's exactly right. And again

it goes back to speaking the language of the partners that you're working with, whether it's a solutions integrator or whether it's a technology partnership, taking the time to educate yourself on their value proposition and how they speak to their customers and their technology and their IP is really important.

Cristina Flaschen (19:26)
And I mean, and you know, from our vantage point with the integration stuff, it's actually necessary. Like you're gonna have to have somebody that knows how the thing works to be able to confidently build and and support this thing. So that dovetails

nicely into the big fish-little fish relationship, as I like to call it. So why do so many scale-ups go straight to the biggest partners first, or maybe the biggest partner in their industry

first?

Cheryl Stookes (19:53)
It's like gravity, right? Because on paper that they have the size and reach and a signed logo can often feel like progress, like we nailed the big fish.

Cristina Flaschen (20:01)
Mm-hmm.

Cheryl Stookes (20:02)
I referenced earlier the partnerships leaders conference in New York at the end of August. Jay McBain actually delivered in his closing keynote a great picture of this. So of the thousand largest partners that Omdia, which is his analyst company, ranks.

A few dozen at the very top, they actually deliver more technology services than the rest of that thousand combined. So everybody lines up at the same doors.

Cristina Flaschen (20:26)
Mm-hmm.

Cheryl Stookes (20:27)
And then what happens is you've got months of recruitment and technical review and legal and contracts. And then a contract gets signed, and then everybody believes they're in and they high five. But I have to tell you, they're not. That was actually step one, because a signed contract

earns you the right to transact with that partner who might be transacting with hundreds if not thousands of other vendors but real access to their sales teams and their pre-sales teams and marketing activity that only happens once you then invest in a partner's program and typically these things are invite only. As a small SaaS company of 30, 40 million, you might not even have the option to do so or you might be one of hundreds of vendors in these programs.

So typically a lot of partners get sort of stuck here and they go after the big logos and then they have a real tough time kind of cracking that nut and getting a co-sell motion going within those partners themselves.

Cristina Flaschen (21:28)
How do you, I guess, how do you recommend even starting that process with like the big fish to your point, especially when there's

like so many moving parts that you can't see from the outside?

Cheryl Stookes (21:40)
Yeah,

I think maybe just a level set of like why is it so hard to crack these these big nuts. right? So I wrote an article on this topic. It was called It's Not You, It's Math. It really is just math, right? So think about the math out loud. So if you're a SaaS company and your product is fifty thousand dollars in ARR.

And you offer a partner, for example, 25% of protected margin on a deal registered deal, which is, you know, when the partner brings the deal and it's registered and that margin is protected, that's $12,500 of gross margin. Now, just for context, because I led these teams for many years and built these organizations, a mid-market seller at a national solution provider is going to carry a gross margin quota, not a revenue quota. They get paid typically on profit.

Of at least $500,000. In some cases, millions of dollars of gross margin. But we'll use $500,000 just for simple math. So if you think about that $12,500 of protected margin, your deal, best case scenario, is going to retire two and a half percent of their annual quota. They're probably not going to give you a lot of time and energy. And that's not a given. It's gonna take months. So

learning your solution and doing joint discovery with a customer and scoping the solution, doing technical review and legal and co-sale planning across a many month sales cycle. And then before any of that, they have to learn your product, they have to get comfortable with your people, they have to understand your program. And that assumes a hundred percent win rate. If you win thirty percent of the time, you need three of these to land one to retire two and a half percent. So the real cost of doing business with you

is actually not not selling with you. I don't know if I'm articulating that correctly. The real cost

Cristina Flaschen (23:21)
Yeah, yeah.

Cheryl Stookes (23:22)
is what they're not doing with that time, right? The same sellers that manage you know dozens, if not hundreds, of different vendors across a customer's technology portfolio, they're often working six, seven, in some cases eight-figure transformation projects across AI and security and infrastructure and compliance.

And every hour selling with you comes out of one of those other things. So it really is not you. It's math. And it's not doom and gloom either. The math just isn't in your favor right out of the gate. So that hopefully that kind of gives you context as to why it's so hard to sell within the large partners. Now it's not all doom and gloom. Typically within the large solution providers, there are specific regions or vertical teams that you can start.

A lot of work that I do is helping these SaaS companies identify their ideal partner profile. And if you think about ideal partner profile, it could be it's essentially it's the right size partners that sell to the same end user and make money around

Cristina Flaschen (24:26)
Mm-hmm.

Cheryl Stookes (24:27)
your product. So how do you find that? It's gotta have two halves. Number one, it's gotta have a reason to lead with you versus an alternative.

And the capacity to deliver it because motivation without capacity is going to stall. And then capacity without motivation is never going to start. Before you do any of that, there's one pass or fail test, and I've seen companies get tripped up on this before. Is the commercial relationship clean? Are there any margin disputes from the past? Is there anything that requires an executive to renegotiate? Is there a contract in place? So

assume that your commercial relationship is clean, but within a large partner, oftentimes you can lead with an industry team or a vertical team. Because vertical teams typically aren't just selling your product once, they're selling a repeatable play and they're running that across dozens of customers that look alike. So your win and your co-sell win then become your template. The second thing is understanding how those partners make money.

I talked earlier around sometimes these deals get signed and the channel team high fives and nobody in sales cares. The teams within the partners themselves get paid on different things. As an example, a pre-sales engineer might be heavily incented on professional services. That could be a combination of implementation services, that could be ongoing services. An account executive might have a combination of product and services in their comp plan.

A partner account manager, as an example, may be compensated on marketing development funds and back-end rebates. So really understanding who you're working with within the partners themselves and understanding how they get paid is really, really important. Understanding that a pre-sales engineer is going to be heavily incented on services. As a vendor, I'm going to work on a project that they could scope.

Deliver and bill back to the importance of certification and having those engineers that can deliver your product without you being there. And then for your listeners, the integration itself, especially into the technology platforms, is often what creates that service's work. So that same $12,500 deal that was not relevant can drive 7x amount in re in a services pipeline.

All of a sudden you're really relevant. It could be a front door to a services engagement. That's the math starting to flip in your favor.

Cristina Flaschen (26:54)
I'm curious if it's I don't wanna generalize this because I know the answer is like it totally depends. But

If you have a recommendation when a company, let's call it like a post Series B size company, maybe they have like a handful of like small partners that have built into their API, whatever. Like if

you have a recommendation, if they've got one partner manager about whether and how they should focus on that big fish versus the smaller guys,

I do think, you know, the smaller guys, meaning like companies that are roughly their size and not like, you know, the the Google size companies.

Like there

is sort of tangential like value in these partnerships beyond like just the straight Rev share side of it. Like there's the

social proof, there's like the market maturity, there's all that other stuff that comes with having all those logos on your site.

But like one human, you know, like at a lot of companies, there's one person that all they do is manage Snowflake. Right. So like to say it was you and your Yeah. So it's

Cheryl Stookes (27:53)
If you're lucky. Unless it's an and partner

and they already have a full time job and they're doing this on the side, right? Yeah.

Cristina Flaschen (27:56)
Well that's what I mean. Like when you say to like a

a junior partner manager, like go build a partnership with Google and also do these other like fifteen small companies, like that feels sort of impossible. So how do you think about advising folks on running the sort of calculus between those two things?

Cheryl Stookes (28:14)
It goes back to it's a both and, right? So an ideal partner profile for a company of that size, it's identifying an ideal partner profile. So let me sort of use a real example. So I recently talked to a company that was a DevOps platform. Their customers were in the financial industry, financial services industry. Their instinct was to go sign the national biggest partner and

they're not wrong, but that is going to take years to develop. So it's identifying who are those national partners and then wedges within them to start working them, knowing that's going to take a very long time to go do. But it's also for them identifying who are those platform engineering firms with a regulated industry practice also selling into financial services, whose engineers are already built on the pipelines your product sits in.

Often

those are smaller partners where you can also be like a real meaningful part of their business. So I almost think of it as sort of like a track one partner and a track two partner. You can think of track one as those, very niche, industry-specific, smaller, typically partners, services heavy. In tandem, working the large partners, which often take years. And it's not like you just, okay, I've got this large national, we're rocking and rolling.

Often they have hundreds of salespeople across the world. It's then getting into individual teams and districts and regions. So it's you know, that's a full-time job in itself. Typically those are two different jobs, building a national and building a regional, but in many companies of the size that you mentioned, it's one person. So being very specific on two tracks of ideal partner profile, but starting with those regionals is going to yield you results faster.

That being said, one thing that is really key is probably one of the biggest mistakes that I see SaaS companies make. They think if they sign a partner, all of a sudden the pipeline's just gonna come flowing in. Be prepared as you sign up, specifically these smaller partners without these big demand gen engines, to be feeding them pipeline right out of the gate. So if you're channel first and you have an opportunity to bring those proactively to the channel, one thing that we did quite a bit when I ran the business for

AWS in Canada is we always looked at what we call balance of trade. What is the balance between opportunities that we're bringing a partner and opportunities that they're bringing to us? Cause we really do want this to be a partnership and making sure that we're both delivering new logos and new pipeline. So that's probably the best advice that I can give a a partner, excuse me, a vendor of that size.

Cristina Flaschen (30:48)
It's so funny. It's like, yes, and it's sort of it sort of depends. Like I agree. I mean, I just always

Cheryl Stookes (30:51)
That's right, right? Yeah. Yeah.

Cristina Flaschen (30:54)
like to think about how folk I always like to ask how folks think about this, especially folks that have seen

Cheryl Stookes (30:58)
Yeah.

Cristina Flaschen (30:58)
this amongst a variety of industries and sort of company sizes.

Cheryl Stookes (31:02)
Yeah.

Cristina Flaschen (31:03)
And we are coming up on time, which I cannot believe. I feel like you and I could talk forever. Couple I know, I know. Next time you come to New York, you'll have to let me know.

Cheryl Stookes (31:07)
I know, right? We just nerd out on this stuff all day. It's the I love it. Yeah. I I love it.

Cristina Flaschen (31:13)
So this sort of dovetails into what we were just talking about, but What are some early signs that a partner investment is working maybe before the revenue has started to sort of hit the books?

Cheryl Stookes (31:24)
Yeah,

they certify on your on your product. Number one tell sale sign. So if an engineer is learning your product, as we mentioned before, that's a day that they're not billing a customer. So if they're committing to certifying their people, they're investing with you. If you, go meet with a customer and everybody nods and it's all high fives, but no one's gonna do the training, like you kind of know it's not gonna work. So understanding early who specifically is gonna certify.

By when, know that sometimes, and actually quite often, especially if you're a small vendor, you have to incent them to do so, i.e., you have to pay money for their time in order to do so. And those investments typically pay exponential dividends, more so at early stages than I would say marketing development funds. I know we're gonna have a conversation around that, but ensuring that you are have those pre-sales engineers and those certifications in place is typically the unlock.

And then once you certify is getting really specific and starting with a specific region or a vertical team or even one seller, sometimes it's better than these large partners. You just need one. Who are you going to work with? And through what buying vehicles are you going to co-sell? So it's starting small, certifying the partner, working with one team and getting those early wins.

Cristina Flaschen (32:38)
Love early ones. I am all about like

get the low-hanging fruit as as as soon as humanly possible. Especially when like

if you're a a smaller company, like partner sourced partner attributed revenue can be so hard in the beginning because like referrals come in

and like somebody goes to your website and they say they Googled you, but maybe it was actually from seeing you on a website or something.

I think getting like any positive outcomes that you could share with the entire company is so important when the direct like line to revenue is a little bit windy

in some of these instances. Like when you have a really mature motion and it's like the referral

comes in, like you absolutely know where it came from and you're doing these great co-sellings. But sometimes it's a little bit more like, we have this partnership. We like made a, you know, we did a press release and like we got more demo requests, but they're all saying they just Googled us. So, you know, who really knows? So hard.

Cheryl Stookes (33:30)
Attribution is one of the trickiest things, right? And I

think it comes back to that notion of when partner is everybody's job, the answer the if someone asks the question, was this deal partner influenced or, influence direct, the answer is yes. Typically a B2B buyer will go through 17 points of engagement before a

Cristina Flaschen (33:46)
Yeah.

Cheryl Stookes (33:46)
buying decision. And, if you can have everybody compensated on the same things and things like comp neutrality, it actually doesn't matter. Like the whole point is getting momentum going early on.

Right. So whether the partner brought you that deal or they Googled it, like one of the things that I love is when sales, marketing, and partnerships have the same goal and they're compensated on the same thing. Cause you're not going to get in some weird bun fight over attribution that's just completely a waste of time and energy and is just not going to be healthy long term. And the notion of feeding those leads that come into the channels, start to feed those leads and it will come back to you in spades.

Cristina Flaschen (34:23)
Hundred percent. I agree. And

like it doesn't matter if it was this blog post or that press release or that podcast. Like the lead, you know, the lead is the lead is the lead. Like, yeah, yeah, yeah. Take it, take it and run.

Cheryl Stookes (34:29)
Did we get the win? Great. Yeah. Let's not overthink it, right? Celebrate the wins

and move on to the next one, right? How can we make this

Cristina Flaschen (34:37)
Well, and this

Cheryl Stookes (34:38)
repeatable?

Cristina Flaschen (34:39)
Especially when like now we have everyone using the chatbots and everything and the AI

to

do research, it's like even harder to do direct attribution. Like so much is coming in

Cheryl Stookes (34:48)
Absolutely.

Cristina Flaschen (34:49)
through these sort of like it's all direct, but it's not actually direct, right?

Cheryl Stookes (34:53)
Yeah.

Cristina Flaschen (34:54)
So we are just at the top of time here, but I wanted to ask two final questions. One, any words of advice for folks who just inherited figure out the channel for next year, and where can folks find you?

Cheryl Stookes (35:05)
Yeah, I would say probably four things to that for that first question is, if someone is asking you whether it's an executive team or whether it's a board, figure out the channel next year, I would say ask yourself four questions. Number one would be, why these partners? Would the partner seller make more money leading with us than what's already in their bag? If you can't answer that for most of the partners on your list.

You actually don't have an ideal partner profile, you have a wish list. Number two is what will it cost? So program investment at a large partner typically starts around 40,000, 50,000. It can actually run into the seven figures. Then you add your own people, the opportunity costs, what you pay your own sellers on partner deals. These are not insignificant investments. So really understanding channel economics is critically important. Who owns it?

Whose job is partnership? Who is that one named person inside your organization who lives and breathes partnerships every single day? And then when will that investment pay back with milestones in between? So that you're not having this full cycle of investment that doesn't pan out and we're waiting another year, and the board or the executive team is getting very frustrated with that progress. So what will it cost? Who owns it?

When will it pay back and why these partners? To answer your second question on

on where people can find me, LinkedIn is typically the easiest place. you can search Cheryl Stookes, you'll find me writing about channel economics, partner go to market, or you can email me at Cheryl at CherylStookes.com. And if you're walking into a board meeting this quarter with a partner plan, I'm happy to pressure test it with you.

Cristina Flaschen (36:47)
That's amazing. I bet folks will take you up on that. And we'll also link to your LinkedIn in the show notes here. Cheryl, it's been

Cheryl Stookes (36:54)
Great.

Cristina Flaschen (36:54)
so fun. This has been such a great episode. I really appreciate you spending time with us. And for the audience, if you guys are interested in more content, workbooks, blog posts, ebooks, we got everything about integrations, partnerships, channel, APIs, AI, all the things at pandium.com. Again, it was so nice spending time with you today. I, again, we could talk about this.

Forever. We'll have to grab a coffee next time you're in New York.

Cheryl Stookes (37:18)
Yeah, I have a good reason to

come to New York now, so I appreciate that.

Cristina Flaschen (37:23)
Anytime. Yeah,

Cheryl Stookes (37:24)
Great.

Cristina Flaschen (37:25)
so really, really awesome. Thank you for sharing so much wisdom. I'm sure our audience learned a ton and we will see you out there.

Cheryl Stookes (37:31)
Thank you.

Sarah Elkins (37:32)
Thanks for listening. If you enjoyed our content, subscribe to our channel and give us a thumbs up. For more content on tech partnerships, integrations, and APIs, check out our articles, eBooks, and other resources in the description or visit Pandium's website.

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