A Guide to Product Partnerships

Why Product Partnerships Matter

In case you didn’t know this about me, I’m a BIG fan of Batman. Most of that is powered by the idea of a character who has the discipline to learn and master pretty much anything. As much as I love the character, I acknowledge that he’s probably not taking out intergalactic gods or stopping armies of the undead on his own — which is why he is buds with Superman and the rest of the Justice League AND why I started a post about product partnerships on a tangent about Batman.

What Are Product Partnerships?

Product partnerships are strategic alliances between two or more companies/businesses, designed to enhance their offerings, expand their reach, or create additional value for their customers. These collaborations can take various forms, ranging from joint marketing efforts to deep product integrations. The overarching goal is to combine the strengths of each partner to achieve outcomes that neither could reach alone.

When I was thinking about this topic, I realized that I have been working in partnerships for over a decade.

• When I was building enterprise publishing platforms at 10up, we were frequently asked to build custom integrations to meet the partnership terms for content syndication, direct advertising, and other functional platforms that added functionality.

• At Automattic, I led the initiative to combine the hosting of Wordpress.com with a less technical and “ready to sell” ecommerce solution from WooCommerce.

• At Automattic, I helped inventory value propositions and capabilities across all of our business units to shape a broader partnership offering and expand existing relationships.

• With .link (Nova Registry) I work with our partners to help integrate custom domains into their products and lead the GTM campaigns for their product + a .link domain. (example here)

As it turns out, there’s enough valuable information stored in my head as a result of this work to justify sharing it with all of you.

Product Partnerships ≠ Integrations

While product partnerships and integrations often go hand in hand, they are not the same thing. Some SaaS companies may support dozens (or more) integrations to make their core product relevant.

Zapier is a great example because while they technically offer over 7000 integrations, they aren’t running active partnerships with each of those companies.

• Product Partnerships: These are broader strategic collaborations that can include various types of cooperation, such as co-marketing, co-development, or joint sales efforts. The focus is on mutual benefits and achieving shared goals, such as expanding into new markets or enhancing customer value.

• Integrations: Integrations are the technical connections between two products that allow them to work together seamlessly. They enable the products to communicate and share data, creating a unified user experience.

Partnerships are about strategic collaboration, while integrations are about technical connectivity. When combined, they create powerful synergies that can significantly enhance the value proposition for both businesses and their customers.

Why Do SaaS Companies Partner with Each Other?

SaaS companies partner with each other for several key reasons:

1. Increased Customer Value: Partnerships that enhance the product offering can lead to higher customer satisfaction, improved retention rates, and a stronger overall value proposition.

2. Market Expansion: Partnerships allow companies to tap into new customer segments or geographic regions by leveraging each other’s market presence and reputation.

3. Product Enhancement: By combining different products or services, partners can offer a more comprehensive solution that better meets the needs of their customers.

4. Cost Efficiency: Sharing resources and expertise can reduce costs and spread the risk associated with new initiatives, making them more viable and less resource-intensive.

5. Accelerated Growth: Collaborating with established partners can fast-track a company’s growth, as it benefits from the partner’s established market position, technology, or customer base.

What Makes a Good Partnership?

A good partnership is one that creates value for all involved parties, including the end customers. Here’s what to look for:

1. Aligned Goals and Values: The most successful partnerships are those where both parties share a common vision and compatible values. This alignment ensures that both companies are working towards the same objectives and can easily navigate challenges together.

2. Complementary Strengths: Each partner should bring something unique to the table—whether it’s technology, market access, or specialized expertise. The combination of these strengths should enhance the overall offering.

3. Clear Communication and Trust: Open and honest communication is critical. Both partners must be able to discuss challenges and opportunities transparently to maintain a healthy working relationship.

4. Balanced Risk and Reward: A fair distribution of risks and rewards is crucial. Both parties need to feel that they’re gaining value from the partnership, which will help sustain the collaboration over time.

5. Flexibility and Adaptability: The ability to adapt to changing market conditions or customer needs is essential for long-term success. A good partnership is one that can evolve as circumstances change.

How Do I Identify High Potential Partners?

Identifying the right partner requires a strategic approach:

1. Understand Your Customers Outside of Your Product: Many product teams hyper-focus on their customers within the walls of their product. This is important for maintaining scope and a competitive edge, but can sometimes cause teams to develop a more shallow understanding of the customer’s needs.

For example: ChatGPT’s copy functionality is a big miss on their part because it copies the entire response to your clipboard in markdown. This means that when I paste a response into a Google Doc, Coda, or many of the other tools I use, I have to manually format it. Most of the time I end up just highlighting the response itself and copying it and pasting it, making their copy functionality pretty useless.

Their core product is about generating useful responses, and they aren’t thinking about what people will do with those responses after they get one they are happy with.

2. Look for Gaps and Opportunities: Identify areas where your product offering or market presence could be strengthened. Maybe it’s a popular feature request that doesn’t quite make sense in your core product or a trend in usage from a specific segment of users.

For example: It doesn’t make sense to install a massive stock image library on every website that is created on Wix or WordPress, but many people struggle to find high-quality images to use on their sites. Both site builders offer native integrations with Unsplash to help solve that problem for their users without creating bloat in the actual product or taking on the responsibility of maintaining a relevant stock image library. This isn’t technically a partnership but is a good framework for deciding to build vs partner.

3. Customer/Audience Overlap: It’s important to remember that the average person uses multiple products in any given day —especially at work. Understanding the jobs your customers are trying to complete in their roles instead of just the tasks they are trying to complete in your product is critical. What did they do before they jumped into your product? What will they do next? What needs to happen for them to be successful?

   

How Can I Make the Economics work for everyone?

Fundamentally, this is an easy question to identify and a hard question to answer. Your partnership strategy should define how you work together to amplify value for your customers. Your partnership/commercial terms are where you get into the business side of it to ensure that both parties are benefiting in a worthwhile way, and that the investment is equal. Here are a few things to consider:

1. Revenue Sharing Models: Create a revenue-sharing model that fairly compensates both partners. This could involve commissions, profit-sharing, or other financial incentives that align with the partnership’s goals.

   Note: Be sure to shape this around an undeniably reliable attribution model.

2. Balance Effort + Investment: Some of the most frustrating partnership experiences come from one side being generally interested, but not willing to allocate resources or invest in making it happen. Scope the strategy upfront and align on who is doing what, how much is being funded, etc.

3. Increased Customer Value: The partnership should enhance the customer experience and increase the value they receive from your products. This requires thoughtful design when integrating, clear messaging, and smart segmentation. Don’t go into it assuming your entire customer base will find it relevant. Do the upfront work to understand who is going to receive the most value from it, and focus on reaching them.

Craft Your Strategy

Shaping a successful partnership strategy requires careful planning, cross-functional collaboration, and a deep understanding of both the product and the customer journey. Here’s a step-by-step guide to help you execute a well-rounded strategy that maximizes the impact of the partnership:

1. Nail Down Messaging and Positioning

Clarify the Value Proposition: The first step is to articulate the core value of the partnership. What unique benefits does this collaboration bring to the table? How does it solve customer pain points or enhance their experience?

• Actionable Steps:

  • Work closely with your partner to develop a clear and compelling messaging framework.

  • Ensure that the messaging resonates with both your customer base and your partner’s audience.

  • Test different positioning statements to identify the one that best communicates the partnership’s value.

Outcome: A unified message that clearly conveys the partnership’s benefits and sets the stage for all subsequent marketing and sales efforts.

2. Identify Key Moments in the User Journey

Map the Customer Journey: Understanding where and when the partnership will be most relevant in the user journey is crucial for effective positioning. Identify the touchpoints where the partnership’s solution can add significant value to the customer experience.

• Analyze customer behavior data to pinpoint key decision-making moments.

• Identify pain points or gaps in the customer journey that the partnership can address.

• Determine at which stages of the journey the partnership will have the most impact.

Outcome: A clear map of the user journey that highlights the most relevant touchpoints for introducing the partnership.

For example: I know that users who are creating a website or a link in bio are either going to think about their domain as the very first step, “I want people to go to “something.com” and see my information” OR they are going to focus on creating the site and not think about their domain until they are ready to publish it. That’s why many web hosts and site builders have entry points for domain sales and for site building.

3. Evaluate the User Interface for Integration Opportunities

Enhance the UI/UX: Once you’ve identified key moments in the user journey, the next step is to evaluate your product’s interface. Look for opportunities to seamlessly integrate the partnership’s solution in a way that feels natural and adds value to the user experience.

• Conduct a thorough review of your product’s interface with the partnership in mind.

• Identify where the partnership solution can be surfaced without disrupting the user experience.

• Work with your product and design teams to create mockups or prototypes that demonstrate these integration points.

Outcome: A user interface that effectively showcases the partnership solution at the most relevant moments, enhancing the overall customer experience.

4. Collaborate with Design for Value-Driven Presentation

Design with the User in Mind: Collaborate with your design team to ensure that the partnership solution is presented in a way that feels like a natural extension of your product, rather than an intrusive add-on.

• Engage with the design team early to brainstorm how the partnership can be visually integrated into the product.

• Focus on creating a seamless, user-friendly experience that highlights the added value of the partnership.

• A/B test different design approaches to see which resonates best with users.

Outcome: A visually appealing and intuitive design that communicates the partnership’s value without overwhelming the user.

5. Identify Opportunities for In-Product Messaging and Lifecycle Emails

Targeted Communication: Use in-product messaging and lifecycle emails to promote the partnership at key moments when users are most likely to benefit from it. This ensures that the right message reaches the right users at the right time.

• Segment your user base to identify those who are most likely to benefit from the partnership solution.

• Create in-product messaging that is contextually relevant, appearing at moments when users are most likely to engage.

• Develop lifecycle email campaigns that introduce the partnership, offer tips for getting the most out of it, and remind users of its value over time.

Outcome: Effective, targeted communication that drives awareness and adoption of the partnership solution among your most relevant users.

6. Identify the Most Relevant Channels and Segmentation Options

Channel Strategy: Determine the best channels for reaching your target audience with the partnership solution. Consider which platforms your users frequent, what types of content they engage with, and how they prefer to interact with your brand.

• Analyze past marketing data to identify high-performing channels for your target audience.

• Segment your audience based on behavior, demographics, or usage patterns to tailor your messaging.

• Collaborate with your partner to leverage their channels as well, ensuring a broader reach.

Outcome: A channel strategy that maximizes the visibility of the partnership solution among the most relevant customer segments.

7. Plan the Initial Launch and Ongoing Marketing Mix

Strategic Launch and Sustained Effort: The success of a partnership doesn’t end with the launch—it’s sustained through ongoing marketing efforts. Plan a comprehensive go-to-market strategy that includes both the initial launch and continued promotion.

• Develop a detailed launch plan that includes a timeline, key milestones, and responsibilities for both partners.

• Plan a mix of marketing activities, such as press releases, co-branded content, social media campaigns, and webinars, to generate buzz at launch.

• Establish a schedule for ongoing marketing activities post-launch, ensuring that the partnership remains top-of-mind for users.

• Monitor the performance of your marketing efforts and adjust the strategy as needed to maximize impact.