Seasoned product managers know that good products bring not only customers but partners who want a piece of the action. And that can be a good thing. Through partners, you can reach a wider audience for your products and provide customers a broader solution than with your products alone. The goal of Shipa Freight’s partnership program is simple – to build an ecosystem of partners that maximizes the value of our core products.
Like with most things with do, we treated our partner ecosystem like a product and use a lean product approach to manage it. We studied the market, looking at:
- Market fit – We found that B2B trading platforms had our right type of customer at the right stage in their buying journey.
- Market size – B2B trading platforms are a $56.5 billion industry and growing rapidly, with thriving large and small players alike.
- Market needs – Many such trading platform providers wanted to offer a digital freight service but didn’t have an easy way to do that.
- Our differentiation – Very few of our competitors offered such a solution to partners
And we looked at the business model, namely how we could create value for both parties involved. Making a partnership work is all about mutual success. Some years back, I was proud of myself for negotiating a very favorable deal with a partner, only to see later that the partner lost interest in engaging with us and ultimately both sides lost. In this case, we found a revenue model with cost per acquisition comparing favorably with our digital marketing, and partner commissions large enough to make it attractive to them.
With a basic model in place, we assembled a scrum team and built our partnership solution. Our goal was the prove the concept without a large up-front investment, go to market quickly, and scale from there. This led us to a three phase partnership engagement model:
- Affiliate – An affiliate promotes our service, brings us leads, receives a commission, and can monitor activity with minimal startup cost.
- White label – Our white label partner platform provides a partner a branded freight service with integrated authentication, providing a consistent experience for customers.
- Embedded freight service – Our APIs enable partners to provide a seamless buy and ship experience for their customers within the partner’s platform.
Key to the economics of this three-step model are supporting affiliates and white labels at scale, and using success benchmarks to justify implementing the somewhat more resource heavy embedded service on a case-by-case basis. Key aspects of our white label solution include an authentication API based on OAuth2, a design system-driven UI, and partner attribute tagging of all events in our database. More on this in a future post.
We’ve had our partnership program in place for some time now and we’ve learned a lot about what it takes to make a partnership successful. Having a great partner is key, and in our experience that means having a partner with a strong leadership team that feels the partnership is of strategic importance to them. Their commitment is everything.
Even with that, you don’t have complete control over your fate with a partner. What may be a perfect partnership one day can change overnight with leadership changes at the partner organization. We try to mitigate such risks by having a diverse set of partners rather than a strong dependence on just one or two.