7 Tips for Introducing a New Revenue Channel
Creating a new revenue stream is like hitting the jackpot. So long as a channel makes more money than it costs to operate, people will get excited about it.
If I’ve learned anything about working in SaaS, it’s that creating a new revenue stream is like hitting the jackpot. So long as a channel makes more money than it costs to operate, people will get excited about it. And so many companies have taken this approach, acquiring startups, building new products, and even licensing some of their features to add more branches to their money tree. But one revenue channel has become particularly fashionable in tech: partnerships.
I recently launched a new partnerships-related revenue channel, so I figured I’d share some lessons learned. Although these tips are more specific to partner portals, they are still a valuable review for anyone about to set a new revenue channel in motion. But first, I’ll dive into why you would want to introduce a new revenue channel and what typical partnership revenue channels look like.
Why introduce a new revenue channel?
You can probably guess that the biggest rationale for introducing a new revenue channel is to increase revenue. While that’s true, companies can also benefit from increased brand awareness and legitimacy. Not only does this expand your TAM, it also boosts revenue diversification, improving your financial stability. And with more people knowing about and buying your products, it puts you in an excellent spot to sell your business or raise higher rounds.
Plus, new revenue channels force change internally. Finance teams have to review pricing strategies more often to make the new revenue channel sustainable. Analytics teams will have to collect and interpret the data they’re getting from the new revenue channel. Finally, with potentially extra time on their hands, sales teams will have an opportunity to reevaluate their GTM strategy and play to their strengths. These are all positives if you ask me.
The partnerships revenue channel(s)
As we’ve discussed before, strategic partnerships have many benefits, but most importantly, in this context, they add revenue. Of course, that doesn’t mean cash comes rolling in the first time you talk to a partner. It takes time and effort to build relationships, educate partners, and gain their trust before they even consider sending you a referral. But with the right hires, you’ll eventually start expanding your partner program faster than a small team can keep up with.
So what happens when your revenue channel gets too gnarly to manage? At that point, you need what I would call a “sub” revenue channel, one that’s more automated and streamlined. Partner marketers and partner managers are constantly generating new partner leads and converting those leads into full-on partners. But what about the current partners? How will you keep reminding them to submit deals?
At a certain point, it’s unsustainable to have one-on-one meetings with every partner. You need them to be able to self-serve. You need them to generate opportunities for you overnight. In partnerships, this usually equates to a portal, a platform where partners can learn about your use cases, get certified, request co-marketing activity, and register deals. In this way, your partnership engine is continuously running.
7 tips if you’re launching a new revenue channel
No matter if you’re launching a partner portal or your own creative new income-generating stream, it’s essential to keep these pointers in mind:
1. Know if it’s feasible with the resources you have
This might be a “duh” thing, but really, take a moment to think through the budget and time it’ll take to bring this new channel to life. You’ll need at least one person to own the whole strategy and execution, and you might need some software to get started too, but think broader than that.
For example, to implement a partner portal, you’ll need to evaluate, decide on, and then buy a PRM. But beyond that, you’ll need someone to gather requirements for, configure, and test that PRM. You’ll need a Salesforce admin to set up the integration. You’ll want partner manager input on functionality. You’ll need someone to measure KPIs and fix maintenance issues. If you end up creating courses or other learning materials, you’ll likely need assistance from product marketing or even engineering. Plus, you’ll want marketing teams to help you publicize the portal (this might cost money). As you can see, there are a lot of moving pieces, even for what is more of a “sub” revenue channel.
2. Design with your audience(s) in mind
To get your revenue channel to rake in the dough, you need to make it as easy as possible to do so. If you’ve ever been a fan of flywheel methodology, you know about “reducing friction.” Essentially, this boils down to removing as many obstacles as possible for customers trying to buy a product. The same goes for new revenue channels. While someone may not be buying something directly, the concept still applies.
If we think about this in terms of a partner portal, this means catering to partner needs. What will they want to get out of the portal? How can you make it as easy as possible to:
- Register deals
- Learn about what your company does
- Find marketing materials
- Understand the requirements and benefits of moving up in tier
Drilling down deeper, you want to provide a fantastic user experience. Take the first bullet, for instance. You don’t want it to take 20 steps to register a deal. Instead, you want to obtain the minimum information a partner manager and sales director need to schedule a meeting. Put some thought into this before you get started because it will literally pay off in the long run.
3. Explain how to use it
This might sound silly after you’ve already thought about number 2. But even if you have the most intuitive new channel, people will still want a way to get their bearings. If they are an existing customer, what will happen to their contract if they buy your new product? If a partner logs into your partner portal how will they know what to do?
There are multiple ways to solve for these issues. After all, PLG companies have been leading the way in the realm of self-serve for years. So take a page out of their book. Create guides, FAQ pages, communities, instructional videos, or welcome sequence emails to quickly get people up to speed. For our partner portal, we created a video that appears first-thing on the homepage explaining what various modules do and how partners should use them. We also uploaded this video and the corresponding slides to the library for reference later.
Hint: give people a call to action. At the end of your instructions, make sure to give people something to do as a first step. This will turn out to be a good way to measure engagement later.
4. Don’t forget about nuts and bolts
If you’re the one in charge of putting a new revenue channel into practice, at some points you’ll probably lose the forest for the trees. On any high-stakes project, it’s easy to get caught up in the details. You have to hit a certain deadline, and you’re doing whatever it takes to get there. Unfortunately, that makes it really easy to forget about what will happen once it goes live. So leave some time to think about:
- Process - What happens when new sales or potential come in? Who will approve or reject them? How will they get assigned to a partner manager? What, if any, interaction will they have with partner managers? Who is responsible for answering support questions? All these questions should be at least relatively ironed out before your launch, else you’ll have a mess to deal with when it’s in production.
- Legal - Will customers or partners have to sign agreements? What if they make redlines? Think about how and when you’ll need to interact with your GC and how to limit the time it takes to get these documents signed.
- Incentives - What will make people want to keep using this channel? If you’re building a partner portal, consider adding partner tiers with enticing benefits or sending swag boxes to partners who have registered x number of deals.
- Pricing adjustments - Not as applicable to a partner portal, but if you’re introducing a new feature or product, you’ll likely have to make (and then communicate) changes to your pricing structure.
- Unexpected challenges - For us, we didn’t realize that LinkedIn doesn’t have a badging system for licenses and certifications until the last minute. To launch the certifications portion of the portal, we had to find and pay for a whole separate credentialing vendor.
5. Do a beta launch
If there’s a way to do a soft launch, I highly suggest it. First, it will expose your bugs. When you’re looking at something long enough, your eyes miss a lot. Second, it will show you who your most loyal customers and partners are. The people who give you good feedback now will probably be good candidates to bounce ideas off of later. Third, a beta launch helps you determine what KPIs you can and should track. This will also help you set clearer, more reasonable targets for your go-live. And honestly, a beta launch gets people hyped and makes them feel like one of the lucky chosen ones who get to participate.
6. Have your marketing plan ready
Although sometimes revenue channels can go viral (think about D2C companies who partner with a really famous influencer affiliate), most of the time, it won’t market itself. You need to put in at least some work to make sure (1) people know about your new program, and (2) they actually go use it or buy from it. So, how do you do that?
Well, first, figure out where these new customers or partners hang out. What social channels are they on? Maybe they listen to a certain set of industry podcasts. Perhaps there’s a professional community where you can place an ad. More generally, you could write announcement blog posts, a press release, or even hosting a webinar about this new channel (or all three).
Think also about what’s already in the marketing pipeline. Does your company have a popular newsletter? Can you vie for a special section? Make a note of other big announcements coming down the pike and try to schedule your release around that. You don’t want any current marketing to overshadow it. Lastly, set an engagement strategy. Get creative about getting customers or partners back to your platform, whether it’s with incentives or FOMO.
7. Continue asking for feedback
The cool part about revenue channels is that they aren’t a one-and-done thing. You have the chance to improve them as time goes on. And who is best primed to give you constructive criticism? Your partners and customers. So ask them for it! Send short, periodic satisfaction surveys with questions that will give you tangible feedback to work from. Think of other ways to weave this in, too. For example, we asked partner managers to bring up the portal in meetings to get partners’ take on it. If you’re not getting enough responses, try tacking on a gift card to sweeten the deal.