How to structure developer and app partner programs

I had the opportunity to speak at NordicAPIs in November 2018. The topic was Structuring partner programs for success. In this post, I’ll review the aspects of successful developer and app partner programs while revisiting the 10 companies I mentioned during my talk.

What is a partner?

A person who takes part in an undertaking with others, especially in a business with shared risks and benefits.

Partnerships are a two way street and come in different flavors.

• Channel or Alliance
• Marketing
• Referral
• Technology

Over the past 7 years, I’ve worked on technology partnerships at Xero. Xero is small business accounting software and has built an ecoystem through APIs and partnerships.

I do want to pause and draw a distinction between companies who have a product with an API (Shopify, Xero, etc) and whose product is an API (Stripe, SendGrid, etc). There are similarities and differences between the partner programs these two types of companies offer and in this post I’ll discuss both.

What is your ROI?

Thinking about building a new program or refreshing your existing one, you should start with why your program should exist. How will the program contribute to your company's success?

Direct revenue like Apple’s AppStore is the easiest way to measure return. Indirect revenue while harder to measure, is still valid. Perhaps you sell more of your product when combined with other products to create a technology stack. Once you have acquired a customer, increasing the LTV (lifetime value) becomes a priority and partnerships can make your product more sticky and reduce churn.

You could include benefits like “brand association’, but this a softer benefit and difficult to attribute when calculating the ROI.

What is the partner ROI?

I believe the best partnerships are founded with the customer in mind. How can we use technology together to deliver more satisfaction to mutual customers? Like many situations in business, starting with the customers results in more positive outcomes.

When we talk about return, we often mean revenue and there are several ways to achieve that outcome. Direct revenue is always an option. Technology or  integrations can be offered as an "add-on" or premium paid feature. You can arrange ways to refer customers to your partners through your sales teams, joint marketing activities or a marketplace/directory.

For companies whose product is an API, a partnership often centers around client referrals but might include discounts based on volume or a referral fee for each client on boarded to use an API. The return on investment from a technology partnership could be in saving engineering resources. APIs unlock functionality that would be expensive for your company to build.

Other benefits you could offer partners

Beyond revenue opportunities, consider other things that developers value. Below are a few benefits partnerships can unlock.

• Premium features of your API
• A listing in a marketplace or directory
• Early access to new features
• VIP support
• Being recognized as an expert
• Training and certification
• Badges or awards
• A case study or blog post featuring the partner
• Influence
• Access to your roadmap
• Ability to add to your roadmap
• Priority place on partner issues
• Input on your programs
• Perks
• Exclusive swag
• Invitation to special events
• Paying travel expenses to events
• Time with product teams and leadership

Where are they now?

For my presentation, I profiled ten companies with partner programs to highlight best practices. Let’s revisit them in early 2021 and see how they've changed.

The companies profiled were Shopify, Stripe, Twilio, Square, Dropbox, MailChimp, SendGrid, EventBrite and CrowdFlower.

Identify your audience

When marketing your partner program don’t overlook identifying your audience and clearly communicating it along with the benefits of the program. Your team will receive these partner inquiries and you want to attract the right people. Casting a wide net results in a lot of time qualifying potential partners. It’s much better if they self-qualify before applying to your program, saving you both time and confusion.

In 2018, I found Stripe, MailChimp and SendGrid all nailed their audience descriptions. How have they changed in the last two years?

Stripe’s program catered to “platforms, plugin builders and extension developers”. This is still true but they have expanded their audience to include incubators and accelerators and will soon open up to service partners. They even have a nifty form so agencies, freelancers and consultants can be notified when the program supports them. Very clever.

MailChimp’s originally welcomed high-quality agencies, designers, freelancers and developers. They have refined their audience as “budding freelancers to seasoned agencies”. Sounds like developers may have been too general a term when defining  their audience.

In the past, SendGrid defined their audience as “digital marketing agency, a boutique design shop, a system integrator or an ecommerce solution provider”. Today, SendGrid defines it’s audience by the type of partner. This is a big shift, how does it play?

The three types are marketplace, reseller and OEM. Logos of companies sit next to each of these partner descriptions. The clearest audience are resellers defined as cloud, ecommerce, and CMS platform companies who want to provide more value to their customers. OEMs are defined by what they wish to accomplish with SendGrid, namely offer users the ability to send email, invisibly powered by SendGrid. Sadly, I’m left wondering  who is the ideal marketplace partner. If you want to be listed in SendGrid’s marketplace, then you are encouraged to apply.  I have to imagine, some partners do better than others in their marketplace, but I need more information to make that determination.

Share the benefits

Shopify with a product, API and transactional marketplace has compelling benefits and data to back it up. Their partner page previously quoted that in 2016 they paid out $430 million to app partners. On top of that, they offered extended Shopify trials, development stores for use with clients, certifications, training, exclusive materials for partners and priority support.  

Today, Shopify’s message has been simplified to “Find problems, Reach customers, Get Paid”.  New stats emphasize that it’s a worthwhile investment and new developers are thriving. This makes sense as marketplaces can feel like a land grab and those who arrive late often worry about diminishing returns against established players. Clearly Shopify is looking for developers eager to understand customer pain points and create new apps to solve them.

Unlike Shopify, SendGrid’s API is the product, so their benefits in 2018 included enhancing your service by offering Email, attracting new customers through SendGrid’s developer directory, a consolidated dashboard of clients using SendGrid and volume discounts. Now benefits are grouped based on type of partner. Marketplace partners gain access to 80,000 SendGrid customers through a curated marketplace. Reseller partners provide a scalable email solution to customers that they can resell from their marketplace or platform. OEM partners can offer clients branded emails and unique access for sending, analytics and whitelabeling.

Comparing Shopify and SendGrid, you can see how they position benefits for partners differently.  Products with an API, have the opportunity to monetize access to their growing customer base through a transactional marketplace. Products as APIs will look for ways to incentivize partners to use more of their product with clients.

How are the other companies positioning their benefits? Well, Crowdflower is now Appen and I could not find a partner program. EventBrite still has a partner page, but the registration form is missing, so I’m assuming they’ve paused the program while COVID continues to impact their business.  For the additional 6 companies, I created a comparison matrix to see what type of benefits they promote in their partner materials. Note, this may not include all actual benefits, but reflects what is included on their site.

On boarding partners

Okay, you’ve hooked them with your benefits, now you’ll want them to apply to become a partner. In my opinion, you should strive to ask for the minimum amount of information in order to qualify partner leads. For example, if you don’t intend on calling them, then skip asking for their phone number.  

Shopify, MailChimp and Stripe require you to login using your user account to reach the partner application form. This is an interesting approach and has pros and cons. By requiring developers to login, your registration forms can omit basic profile information and you can use data about what the developer has done on your platform to further qualify them for partnership. If you only want developers with experience using your APIs, it is reasonable to expect they have a user account. The big benefit is leveraging data to pre-qualify partners for follow up by your team. This approach makes sense for maturing partner programs that have too many developers wanting to partner.

Companies that don’t require a login on average ask for 5 to 7 pieces of profile information and 1 to 4 qualifying questions. Slack is on the high end with 11 fields for profile data and 5 qualifying questions. Dropbox ranks lowest on my list for their multi-step on-boarding form that requires a phone number.

Square’s application has the least friction, but I assume this means more people reviewing and responding to inquiries.

Showcase your partners

Back in 2018, all 10 companies I profiled had some type of marketplace, directory or gallery. As I mentioned Crowdflower’s partner program has disappeared and along with it their directory of app partners. The other 9, including Eventbrite’s marketplace are alive and well.

Your marketplace or directory offer a significant way to send your customers to partners. Here are some tips you should consider.

• Make your marketplace/partner directory easy to find off main navigation
• Categorize partners for browsing and make it searchable
• Incorporate a visually appealing design
• Have a call to action from your marketplace i.e. a button “Get this app”
• Going a step further, build full listing pages with rich content to improve SEO
• Allow customer to leave reviews about your partners

My additional tips for 2021

• Give partners a way to update their listings themselves through a partner portal
• Offer a way to create region specific listings for partners whose product differs geographically.
• Include a way for partners to respond to customer reviews

Takeaways for success

You need to be clear on why you want a partner program. Find your natural allies and what I mean by that are companies whose customer base overlaps with yours and who share similar values are often the most successful partners. ROI is great, but don’t forget creative benefits.

Sell the benefits of your program by articulating who you want to partner with and how they will benefit. Build an on-boarding process that can scale because qualifying partner leads can be time consuming. Drive your customers to a marketplace or directory so they can discover your partners. Success doesn’t happen overnight, so build your program and team with long term support from your company executives.

You can watch a recording of my 2018 NordicAPIs presentation below.