At ZipBooks, we’re a relatively small company, still technically a start-up. However, we have managed to increase our revenue at a steady rate through a little bit of perspiration and some awesome SaaS partnerships.
Today, we want to offer a few tips for those looking to partner with other SaaS companies. These are some things that have worked for us and could work for other start-up companies as well.
Partnerships have always been an essential element for growth, especially for new businesses. They are particularly attractive to start-ups who are hungry to grow, because established platforms can send new users — who’ve never heard of you otherwise — to your platform.
Even big companies like Starbucks rely on partners like the New York Times, Spotify and Lyft to significantly grow its Starbuck Stars loyalty program. CEO Howard Schultz said, “[Partnerships provide] a unique opportunity for [incremental growth], increased profitability and the opportunity for us to serve, connect with and become part of the daily ritual of an even more larger based number of consumers.”
Partnerships can make a huge difference in your ability to gain access to broader markets, close gaps in your product’s feature set and of course, grow revenue. As a start-up, the trouble with partnerships is that the established platform might not want to take a bet on you–the new, unproven platform.
Focus on the right partners
As you are looking to land your first SaaS partnership, it is important that you focus on the right partners and establish a level of trust. Consider who their customers are, what they do and whether or not they will actually refer you. Maybe even ask your customers what services they are using alongside your product and try to combine forces.
A great tip is to look for companies that do “open” integrations. When we were getting started, we did this through Google Drive and Slack, and that brought some nice initial customers. Then you can build on that success to go further up the chain to bigger and better partnerships that are more difficult to get.
Prove your worth
Another component of finding the right partner involves balancing the value that you offer each other. Most often, potential partners are either looking for A) new customers or B) the ability to monetize existing customers more effectively. Smaller companies typically want A and larger companies typically want B, though it’s fluid.
Before you approach a potential partner, you need to make sure that you have something legitimate to offer them. Ask yourself, will our partnership help this company meet their own objectives? What gaps in their service can we provide? How are our goals aligned?
If you don’t have any real value to offer a certain partner right now, consider waiting to approach them until you can fill a real need.
For example, when we were looking to partner with Square, a company that helps sellers run their businesses, we had to prove that we could offer substantial credit card processing volume to their merchant services. As a QuickBooks alternative with a free tier, we had gained significant traction in that area and were able to capture Square’s attention — but not until we’d established ourselves.
When you are trying to make partnerships happen, it’s essential to understand what drives the other party and show how you can add to that value.
As explained, don’t approach a potential partner if you’re not ready to offer them the complete value package. This requires some research.
Take the time to understand what the partner company does and what gaps are in their service. Make sure your product strategies are well thought out and fully operational.
Create a partner handbook to show your partner what your objectives, target market and available resources are. Make it easy for your partner to see your value right away.
Some of the greatest frustrations with partnerships come from having no formal plan or just a one-sided relationship. So don’t try the rookie approach. Contact your partner company with thorough research and preparedness at your side.
By nature, seeking out a partnership is asking for a favor. Don’t try to hide what you’re getting out of the partnership. And don’t pretend that you have more to offer than you really have. Each side has their own vested interests and a successful partnership is one that is transparent about what they want. There is an understanding that the success of one partner contributes to the success of the other.
Use the formal plan (that you just created) to set clear expectations and contributions for each side. Together, craft clear and measurable goals outlining the actions each partner is going to take.
A long-term companion
If you want to make your partnerships work long-term, you need to engage with and support your partner’s success. Be an expert in their product and make it easy for them to be an expert in yours. Offer ongoing education and marketing support, things like webinars, software feature releases, accurate sales literature. Communicate often with your partner and always offer to do more.
Partnerships are a long-term business strategy and they should get better with age. Advocate and communicate. Remember that both sides need to get value out of the relationship. Be willing to give, and maybe even give a lot, knowing that you will also get a lot out of a successful SaaS partnership.