Christopher Smith on The Financial Model Behind Great Partner Programs

All right, welcome back everybody to another episode of the partnership mastermind podcast. I'm your host, Chris LeVois. And I'm here with Christopher G. Smith, who is one of a kind partnership leader who actually treats a partner portfolio like a portfolio, not a popularity contest. And we have a lot for you on that regard. Chris has led partnerships across multiple SaaS contacts from building partner success into your programs at Open Sesame to now leading channel partnerships at Gusto with one very clear mission, turned channel into a predictable accountable growth engine with the same rigor we expect from sales and marketing. Today we're going to go deep on a killer reframe that Chris rarely gets asked about. Channel as a trust distribution mechanism, which I'm really excited about. Chris, welcome to the show. Hey, I am super pumped to be here, Chris. I'm a big fan of the show, big fan of yours for a long time. Obviously, see a lot of your content, unlinked in just a ton of respect for the work that you've done and just excited to be here. So I'm happy to be on. Well, I appreciate that. Kudos to you for investing so much on the teams that you've led and having them come through the mastermind community. And look, this is the first time I've had a fill of Chris on the show. So I've been looking forward to this all day. So stay everyone you're getting a double dose. So let's get into it. So first things first, every episode we do a fast five segment. We call it where quick getting questions meant to let you warm up and give our audience an opportunity to get to know you a bit better. So just first thing that comes to mind, you ready for that? Let's do it. Okay, cool. So in our prep, we were just kind of going back and forth and you had mentioned some of the whiffs maybe earlier in your career and we've all had these mistakes. And there was this email campaign story, right? So to speak. And that's all I'll say. So set the scene for us. Like, what happened? What was the situation? What did you think was going to happen? What actually did happen? Yeah, I think many of us have all had been in the situation. Chris, you probably have been in the situation as well where at the time I was working with a very large HRS provider. I'll leave them unnamed. You don't know if you'll need to be innocent. We'll just say a large provider. And we're getting in the Alliance role and they have a very rigid and defined part of program. And I wanted access to their field team. And they weren't really super forthcoming with giving the access to their field team. And this was a year's during COVID where like face to face time was very rare. So I had to get really creative with how do I get myself in fund of their field team when they're not getting it to me. And so I got a little scrappy, a little creative. Chris, I scraped every go to market contact from the company that off of LinkedIn. I concadinated and built an email database for everyone, validated those emails and then put them all on an email group campaign that I wrote. And let's just stay within about 48 hours. I got an angry phone call saying, what? I love that. Well, first of all, great use of the word concatenate. I never knew how to pronounce that verb, so to speak, in Google and Excel spreadsheets. But I have done exactly what you're describing many, many times getting access to the field teams because it looked in a lot of these referral and coastal relationships. It's the customer client facing reps who are like the most important stakeholders, but they're guarded. And so you got to earn your way to them, but sometimes it's easier to ask for forgiveness than it is for permission. So I have felt that slap many, many times, but you got to do what you got to do. So I appreciate that scrapping this. Yeah, cool. All right. Cool. Second question for you is whenever I prepare for these interviews, I always creep people's LinkedIn profiles and I always look for testimonials that people have because it gives me a glimpse of the people in mood to interview. So in as many words, someone described you as operating really well when things are quote "urgent" and "political," which I was like, "Wow, like, I'm jealous of that." So I'm curious, what's your playbook for staying effective when alignment is messy and the stakes are high? Yes, but now I know where you got that from, as I was wondering, where do you Chris get this from? It's clearly one of my, yeah, it's been a while back. And here's what I'll say. I was thinking about that question, Chris. And thinking about like my approach to a situation like that one, honestly, I wouldn't call it very bespoke or unique, but I would say blows down like three things that I try to do when those two, when something's urgent and political. And the first one is around, really, let's just take the temperature down the room. A lot of times things are, what gets very heated. And so what I try to do is come at it from a perspective like, let's actually reduce the intensity if we can have a rational conversation. That's not always possible. But I certainly try to get there. Yeah. And after something is urgent and political is really around, let's get to a first principles perspective. A lot of times things get cloudy and murky. Yeah. We can just dispel of the notion of like a lot of the ambiguity around a problem, just strip it, just gaffling off it and get to the root. It certainly kind of, it bunks a lot of like the, like the, like the blocks around the certain issue. And the third one I try to do a lot, and I do this with my team, even when things aren't urgent and political, is I invite to set really early on. I want people to actively disagree with me and tell them it's okay. And if someone disagrees, I'd rather know about it in the room than find about it out about it in the Slack thread later. Yeah. Or not find it better at all until the tension kind of, you know, happens like mold, so to speak. And it's too late to kind of like solve the problem. So I think that's, that's a really great framework for any leaders listening. But anyone who's, and I see, right, there's no reason that you can't operate with those same principles. Like cool the temperature down, get yourself into a rational headspace. You can think clearly, anchor the situation around good first principles. So you have a framework. And then ultimately, you know, beat challenge directly, respectfully but challenge directly. And I think that's a great way to build a culture, which is not a surprise that you've had such a great career doing that. All right, cool. Now we have always had some spicy, spicy questions, right? Because to your point, we like to, you know, be candid and direct, right? So you're not afraid to speak your mind, so to speak. So the first question is, what's a hill you would die on as a channel leader, even if it makes you unpopular within the kind of channel world? Yeah. Here's what I'd say, especially in organizations that are medium to large size, because it really depends on like where you're coming at, your partnerships, you're from, and what kind of, what company, what company are you representing. But in the companies that I've had the pleasure to work with and for, especially in a channel-type role, I feel very strongly that channel is the front door to every other partner motion at a company. And truly channeled the ecosystem of channel partners we have at a company is the store shelf that other partner teams of the company should be shopping from. Whether that's product teams and bedded partnerships teams or corporate dev functions, they all shop from the shelf that is channel partnerships. We want to build an effective partnership flywheel, channel is what starts at spending. I love that. You have a knack for really strong analogies. And so we're going to tap into more of that kind of the way you phrase that later on today. But I love that kind of phrasing at all. So one of the next questions is related to another topic that I know you're passionate about, which is kind of being more ruthless and disciplined in deciding on which partners to invest in and place bets on, which is something that's like very near and dear to my heart. And I'm like, one of the biggest dominoes that you set off into motion is deciding which partners to invest in. Because then they're kind of like these children you have to take care of and you have resources you have to commit. You have stakeholders you've got to pull internally to like maintain a relationship. So it's such an important thing to get right. So this next question for you is, let's just say you get a new partner intro call, right? And they say what's some of the things that they might say or show that will instantly tell you this is going to go nowhere. And while you think about it, Chris, I find that too many partner managers early on in their career, they haven't developed enough skill and maturity to kind of fluff out the BS and have this anti BS detector where they're able to make sounder decisions on who might be a good fit and who might not be a good fit. So like what are some of the things? If you say, I know you're not really managing partners directly now in your role, but say you did go on a net new disco call and someone's pitching you, right? And becoming a partner, what are some things that you might see? It's like, uh-uh, this is not going to be a good fit and I need to like, you know, not pursue this any further. Yeah. I mean, there's a lot of red flags that they occasionally get. Sure. But I think you want to come to mind. And I do, you know, by the way, I spend some time on the root side and our management side in terms of getting our actual calls and partners. But it's one of the best ways to still maintain a beat on what's actually happening out there. Sure. It really sets off my like BS radar is when we get onto a call with a partner. It's an intro call and it's, it comes off pre baked pitch. It comes off as more of a stage of a wire. A little to slide deck. Yeah. And it's not bespoke or custom anyway. It's just a, let me, let me pitch you and maybe throw your logo into a slide. And that to me is like right off the bat, your BS antenna should be going up saying, hold on. Part should start from a place of curiosity about how we serve each serve the customer, not from a sales deck. Like sales deck is not a way to get things done in my brain. Yeah. I love that. I mean, I totally agree. I honestly could spend an entire hour just on that topic because it is so important to get right. Like, think what the friends you invest in, think the relationships we invest in. Like, you get those wrong, which we all have. Right. It's costly and it's hard to reverse. Same thing for the partnerships you stand up. So I think that's a really great way to frame it. So the final quick hitting question for you, which is related to another topic I know you're interested in, which is building trust with sales, right? Especially in the channel where it's critical. It's, it's make or break. But even if you're not, you're not going to be able to do it. if you're not in pure channel roles, but more pure partner kind of alliance roles, you need the trust so that the final question for you in this segment is, what's the quickest sales trust test for a partnership team? What's one thing you can look at and know of sales actually believes in your team? And in partnerships? - Yeah, Chris, I find a lot of partner teams who sort of have a bit of a cross they bear as far as, like does sales understand the contributions that we truly made to this business? The sales understand the value we bring. And like, I get what I understand the desire to wanna feel like you're mattering to the overall go-to-market motion, but I would actually challenge the listeners here to the opposite of that. It's not about whether sales knows partner numbers, it's about whether the partner team knows the sales numbers. What's their target? Where are they at to goal in the month or the quarter or the year? How does partnership contribute? If you can't answer those things, you haven't really earned the right to expect their trust. - Yeah, I mean, we are vibe in Chris, not a surprise with the same name, because this is exactly right. I mean, look, at the end of the day, if you're to strip down what our job is, is we're here to create pipeline and move revenue through partner companies, period, and the people within those companies, right? Not to oversimplify what our job is. So at the end of the day, you're right, the average sales rep, say you just join a company as a partner, Pam or Cam, and there's maybe 10 to 50 AEs at your company. The average AEs is not waking up on a Tuesday and saying, "Wow, I wonder how partnerships can benefit me today." For the most part, obviously you might be at an org where you're at that level. So they need to feel what it's like to win from partnerships. They need to know that you sourced or influenced some major deal that either wasn't gonna get created or wasn't gonna close without your actions and a specific partner's actions. And until a specific rep and obviously the team at large feels it, really feels it in their bones, why are they gonna wake up and care about you, right? So is that kind of resonate with you, Chris, on that point? - It does. And I was studying a lot of our sales leaders recently and he used to phrase that I'll repurpose here, which really kind of angers when you just said, sales wants to feel like you're in the fight with them. - Yes. - You don't feel that, like there's not a lot of trust. And so you have to get into the fox hole, get your hands dirty and roll up your sleeves and feel like you're in the fight with them. - Exactly. And the final thing I'll say on that is a lot of pams, cans, et cetera, will be like, why, you know, but I have the same type of quota as sales. Like why don't they, they should just work with me better. Like meaning you might have, you might have closed one source revenue as a quota and eighties obviously have closed deals as a, and revenue as a quota, but that's not enough, right? Like you need to actually build the trust by like delivering the goods and you need to avoid doing things at burn trusts like, source, you know, passing them on qualified leads over, over inflating how warm a deal is when they know it better than you do. So, anyways, we have a whole segment on trust, but I'm glad we touched that a little bit. Cool, so let's get into the second segment now, which is we start every episode off with a really quick segment on an origin story. Because what's cool about partnerships is we all have totally different paths into partnerships, some of us come from the business world and other worlds. So let's talk about you. I know you started at, you know, in Cisco and then the VMware private cloud era before ecosystem was really a buzz word. So I'm curious, like what were you actually doing day to day? That later clicked as partnerships to kind of get you, get everything rolling for you. - Yeah, it's funny. I was thinking about this question, Chris. And honestly, like, I would describe myself as back in those days, a slide jockey. And it's funny, these days, the slides hold themselves. Like, they don't have to do that anymore, but in the before times, when you had to actually build your own slides. And I was like, "Jockey, I would, "my job was to sit in the executive meetings "with people from EMC, which is now Dell Technologies, Cisco VMware, where they were way more important than I was, "and just listen. "My job was to listen." And then essentially build sliding content around what we decided to come up with as meetings, they helped drive actions and activity after it. Essentially a lot of program management internal consulting. - Wow, super cool. And so then, fast forward a bit, and I ask this question every guest, like, do you remember a specific moment or a specific period of time where you realize, like, "Oh shit, like, this is something "that I could potentially see myself doing "the rest of my career, that being, you know, "partnerships, channel, et cetera?" Was there a specific moment or a period where that really clicked for you? - Yeah, I mean, there was a period where I went from just listening to getting thrown in the deep end in a lot of working sessions with that team, to actually deliver on joint services across three different Fortune 500 companies. It was really a sink or swim moment for me, Chris, which is like, "Hey, figure this out. "We haven't done this before. "We need to get this done. "Can you, Keral, three different teams "with three different companies "and get them on the same page "and what we want to go deliver "and on what timelines we want to go deliver in?" So the moment that I was hooked was, you know, I fell in love with this idea, like, the alchemy of combining multiple partners into something greater than any one of us could build alone. And I had this moment of like, wow, like that's really exciting to me. That was a real, aha moment. - Yeah, you know, something similar for me, I just, you know, I don't have ADHD per se, but I, you know, I can get bored and want change in my life. I like a dynamic lifestyle. So for me, you know, if I had to think about doing a job where it was like 100% within the confines of my own company entity, I don't know if I'd do so well. With that, but the beauty of partnerships to your point is like, you get exposure to so many of these great companies. Like you've worked with so many, so many great companies indirectly and as of I. So I definitely resonate with that, the diversity, the dynamics of it also, something similar for me as well. So now you said something, you know, in terms of we always ask like, what was one big early mistake that ultimately you learned from and were able to parlay kind of for the rest of your career. For you and our prep, you said that one of your early mistakes was being unwilling to say no, which I've definitely heard that plenty of times on this show from leaders like yourself. And not having a strong perspective on who to say no to. So I'm curious, can you unpack that a bit for us? You know, what felt risky about saying no back then and what ultimately changed when you finally got disciplined? - Yeah, I mean, I felt like I had to earn my seat at the table to be able to say no. And I had to essentially have a higher degree of, I'll call it competency to be able to say no. - Of course. - And the reality is like, you know, that isn't a mistake. It starts from a place of like having to first understand and align with what are the motivations in the room or at the table, what are people trying to get out of things and what are people's goals and aspirations and how they measure for them on a success perspective. And finding that zone of mutual agreement were the three, two, three, four power many parties were talking about can kind of come together and all agree on what good looks like and work outwards from there. And the discipline around that came later. Yeah, I've built a lot more competency. I've built a lot more confidence. I'd be able to say no and lean into it. But a lot of that early kind of awkwardness was me just saying, I'm not sure I have the gravitas of the seat at the table to be able to say no. And you know, since then, Chris, what I've learned, especially watching people or what's more junior than I am now, is like the folks who are willing to take a stand whether they are right or wrong or the folks who are oftentimes find themselves on that faster track to like more leadership rules and really develop that competency a lot faster than I did. So it was an awkward period. I was like, yeah, this is, wasn't ready to say no. I just want to stick my neck out and, you know, in reality, the coaching moment was like, mm, gotta be willing to be wrong. Yeah, well, look, we always appreciate candidness and vulnerability on the show, especially from visible leaders like yourself. And to anyone listening who's early stage or even later stage, learning the power of no is incredible. And for me, you know, I was humbled in one of my last roles I was leading a global partner team. And I was reporting directly to our CEO and we were on site together and he took me for this walk. He was giving me like an informal six, first six months kind of evaluation feedback session on this nice, beautiful walk. And he was giving me a lot of positive feedback but then he stops me dead in my tracks. He said, Chris, I want to tell you the one thing that you absolutely need to get better at. And it was saying no. Right? He said, do you know what the most expensive word in the English language is? It's yes. Because as soon as you say yes, you've committed something and other people's time and resources, et cetera, et cetera. So you have to appreciate the power of no. He's like you're saying yes to too many partners. You're saying yes to too many things internally from other leaders across the leadership team. And you're stretching yourself then and it's starting to show a little bit. So that was a powerful moment for me. I was like, oh, crap. I thought I was pretty good at saying no and I certainly had no problem speaking up and speaking my mind. But I was saying yes to too many things. Because I think we naturally, we feel like it's our job. Like we always want to feel like it's like sometimes we think saying no is a reflection of our inability, right? But and that's how you think early on. But as you get more experience and more confident to yours your word, you start realizing, well, no, to make the most of my abilities, I need to say no more so that I can focus on the high moments for the things that I will actually say yes to. Does that kind of meta, kind of solidly que resonated all with you, Chris? It does. I wish I had as great of a singular experience and a story that you have as far as how I do that. But fundamentally, I think we partner leaders are natural connectors. And sometimes that can be conflated for also having a hard time saying no. You want to say yes because you want to be light by and connect with other people. And the reality is you'll be more respected if you have the discipline to be able to say no occasionally. 100%. And you'll be also be a lot more productive, right? So just because you have a partner who wants something for you, you don't have to say yes to everything. You're gonna ask yourself, you know, Every time you say yes or something, you have to say no to something else. And you don't want to have to say no to the things that really matter. Awesome, cool. And now let's get into segment three, which is talking about partnerships and partnership operators as a chief capital allocator. Right? And one of the things that you're known for is treating partners like investments, which I really love that analogy. So let's just start from the beginning. When you say partners should be an investment thesis, so to speak like, what does that mean in plain English to you? - Yeah, it's funny. This is a hypothesis that I've been refining for a long time, Chris. And in fact, the earlier last year, I've wrote a LinkedIn article and this I'm happy to share with you, we can put it in your show notes, perhaps on read- - We will. Strategy and tight economy. And it really is built around this notion of partnership leaders are by definition, in my opinion, they are first and foremost capital allocators. And what does that mean? See a lot in the LinkedIn circuit, like this buzz phrase around partnership professionals being many CEOs. And I do think there's a lot of truth to that as far as we have a lot of many hats to wear. But I think the most truth is related to this topic is with respect to this idea, a CEO's job is to allocate capital. And the question is, well, how and why? And fundamentally, a CEO's job is to essentially take the capital available to them, allocate it in the areas that have the highest ROI for the business. And then we have a lot of fiduciary and fiscal responsibility to do that. So if you kind of parlay that kind of line of logic and that thought process down to the partner level, what we have is at the partner leader of the partner and manager level, the same sort of set of tools that you have available, just on a smaller scale. You have a number of different tools and resources at your disposal, whether that's product or engineering resources, whether that's marketing resources, whether that's MDF, PDF, like you name it, tools at your disposal, but all of them cost money in some form of fashion. And obviously MDF's a great example where specifically, there's a dollar amount associated with that, and you're giving it to a partner. But I'm here to tell you that everything cost money, including allocating your own engineering or product resources, there's also a dollar amount associated with that, everything cost money. So the question that I want to show ourselves as partner leaders is where should I most effectively allocate those funds in order to gain an ROI back from them? It's a lot like investing in the stock market and trying to decide, maybe you want to have a more diversified portfolio, and have a little bit in large cap, but a little bit international, so on and so forth. We need to diversify and try to figure out where the best places we can gain ROI from. And within that bucket of how we then spend that investment thesis, if you will, one of the things I put forth and I'd love your reaction to this, Chris, the partner manager's time is also capital. Just the ability to spend time on something, back to your earlier statement about being willing to say no or yes, large percentage of your time, any given week, month, quarter is spent towards, partners that frankly probably aren't generating a ton of return. So we have to have clear ROI and signal on where are we spending time, IE money, and what is the return on the investment for that money? Where should we double down on that investment? Where should we automate? Where should we look to exit from that investment and get out? We have to be able to measure the time to revenue, also revenue per after E as well. I'm going to pause Chris, I want to get some reactions from you then. No, I mean, I'm just my head's bobbing up and down. I'm going to have to put a brace on my neck because I'm agreeing with so much of what you're saying. But no, this is brilliant. I have so much non-pack, I'll try to keep it coherent. But first reaction is like, I've always taught this exact concept, but I always use the phrase resource allocation. But I actually like the phrasing capital. I'm going to update all of my content, all my slides, accordingly, because I think it creates a more visceral, intuitive way of thinking about it. I agree with timing, one of the more precious pieces of capital. But not just your own time. We all know that you need pull and contributions from cross-functional stakeholders to stand up and get these partnerships going. And that is time from them as well. So resources in capital isn't just monetary to your point, but it's also heavily time. So I totally agree with you on that piece. I have one comment and then a question for you. One thing I think that really makes us a challenge for a lot of, say, partner manager type folks is they might understand this at a surface level, but they literally don't have-- not the cap table in front of them, but they don't have the capital layout in front of them. They literally don't know literally how much MDF do they might have, how much cross-functional pull and availability that they have, how much budget they might have for this and for that and the other. So does that resonate with you in terms of your level and your experience? If I said, hey, Chris, go map out literally. How much capital so to speak do you have to deploy across your partner function? You could probably within an hour come back to me with something very coherent that we could riff on. But I don't think the average partner may not actually do that quite yet. So what's your reaction to just the struggle of, well, first, you need to know what is your cap sheet, so to speak, even look like before you can start to think about deploying it strategically. You know, Chris, this might be a good example of where we might-- we can actually actively disagree for the first time in this part. Because I think I'm on a challenger list. I think partner managers can do this. And then let me explain how and why. I think maybe two or three years ago, if we had this exact same conversation, it would have been a lot harder for partner managers to do this. And these days, especially with AI and obviously have tools like GPT available to us, Cloud and Cloud co-worker now, live in a lot of places, you can use those tools to actively prompt yourself to how to be able to track some of those things and really get to an investment thesis. So my advice to the listeners is, let's build a prompt. I'll help you do it quite frankly. I know you and I have to do it on how to ask yourselves the introspective questions on where that time and other capital is going and then be able to track it on a more effective basis. Or another way you could crack this not rather than trying to bite off the entire base of partners when anyone might be managing is, let's just focus on one partner and try to test the investment thesis. Not for all the partners, one, especially when you think of one of your bigger partners that's viewed as a really top contributor to your business, let's build an investment thesis for that partner, be diligent about how we spend an allocate capital with that partner, and then tie that back to the revenue coming off that partner. And ultimately you're going to get a thesis that says, okay, I invested X and I got Y back. And then we start to develop baseline of what good looks like. We can apply to other partners and do that more at scale. So that's my kind of gentle person. I think the listeners can do that. I think they can, especially the children. - You don't, I appreciate that. You don't have to be gentle. We love, that's what the show is all about, right? It's bringing fresh perspectives and challenging things directly. And I respect that. And just to clarify one point, I definitely think you should be able to do it. I guess more where I was coming from is my observations about what's hampering so many folks is this perception that I don't have visibility on what capital I have in front of me. And therefore it makes it difficult to deploy, but you're totally right. Everyone listening right now should be able to kind of put together this like capital exercise of like literally, how many horses do I have in the barn? What resources do I have in front of me? And then it's like, what are my objectives in target outcomes? And then how can I make strategic bets? And how much capital does each bet cost? And the thing I also coach all the time with people on my team and the community is like, everyone should be thinking about themselves in your partner program and your partner portfolio as like your own P&L, your own balance sheet, so to speak, right? And you cost the business money, your salary, every time you fly to an event or go see a partner when you spend them DF, you cost the company money. And obviously you wanna be in the green and bring the company money back. But so few partner pros, especially at the I.C. layer, have any sense at all of the unit economics, right? They don't understand, and when you set your quotas and you set budgets, they just think it's arbitrarily made up, right? But it's like, no, no, no, no, no. There's actual financial operating models that govern how we kind of provide you capital. And so I think the last thing I'll say, Chris, and I'll get your reaction is like, I would really challenge partner pros to not be ignorant when it comes to the financial discipline that we should all be operating with. And one of my mentors, now president of Pavilion and former SVP partnerships at Clavio Rich Gardener, I remember I met him for the first time a couple years ago in Chicago at an event, and I was really excited to talk to him, and he said, hey Rich, I wanna get to your position one day. What's one tip you have for me? He's like, know the balance sheet cold for your partner program, and then he just walked away. And I was like, amazing, right? And so what's your reaction to this need for us? I don't care if you're a leader or an I.C. to improve your financial discipline because it's gonna matter, either now or certainly later in your career. - 100%, I think there's a lot of listeners out there who are like, hey, I don't know where to start with that. And let me just tell you, start with your finance person. - Yeah. - Just by them launch into our consent, my star boys gift card and hang out for a while and just listen. - They'll be happy to talk to you. - Yeah, they will talk. And I'll give you, here's an anecdote I'll give you on this, before we wrap up this segment, Chris. I have a lot of folks who come to me, and they'll ask me for approval for funding on stuff. And I get it, we all wanna go spend money and then do some things with partners. And but there's not always like this hypothesis that if I get this money, I'm gonna get X dollars back. - Yeah. - Just that we miss that threat of like, I want X, I'm gonna get Y back, excuse me. And so with regard to that statement, what I would say is like, sometimes I also hear, hey, if we spend this money, we'll at least be, we'll make this money back then. it will be all break even. In my reaction to that is we're not in this business to be break even break even as they keep the lights on like we have to be well beyond break even and so just building the rigor and the muscle around what do I expect to get back from this whether you're right or wrong and your finance person can certainly help you dial that that skill in. How them gets better over time you start to get more comfortable and constantly like okay I've done this before now I can kind of forecast this a little bit more appropriately. I think that's really great advice and then as a kind of a top up on that when you do get budget and you do get support and investments from your company or your boss or whoever and you run an experiment or you go through the whole motion follow up and write a post mortem and share it I don't care if it bombed it was a disaster or it was the best thing that you ever did share the results that's a big mistake when people ask for resources and approvals and you don't follow up and close the thread it doesn't make you look good you burn a little bit of trust but on the flip side if you do close it out good or bad outcomes that is what an executive level person does and there's no reason that everyone listening can't do that as well just as a top up. Chris I know you know that well and so this is a nice segment so the next many segment is like CFO language and partnerships and so that's something you're clearly really strong it is like speaking CFO level when it comes to all things channel partnerships. So the first question for you here is when you're pitching internally what are some of the metrics or language in your experience that actually lands right like maybe maybe you're discussing budget for the next fiscal year or it's just there's some legitimate investment maybe a specific tool or you want to create an MDF fund so to speak like what are some of the metrics in language that you found to personally translate and resonate well that our audience can learn from. I'm going to throw a couple of acronyms out there and we can talk about definitions around them but sure reality is it's not that complex it might be a little onerous to folks and they might be like I'm not sure what that means they haven't used that before especially again in this day and age GPD can certainly teach you some of those things on the fly it's not that hard and what I'll say is that there are operational metrics we're all very familiar with and then there are financial metrics and the financial sub but I'm talking to my finance partner it really defeats is around like the cack of the overall channel the cack of individual partners customer acquisition possible for your listeners who maybe aren't as familiar the cack of individual partners the individual motion cack and then also the LTV the long term value of a deal that we acquire through partner the cack to LTV ratio and then the ROI are on that whole thesis as well and so for me it's really a conversation now one first and foremost aspirationally we want the channel business to be one of if not the best methods of acquiring new customers in the overall business right it should be one of the lowest cost of customer acquisition out there now first and foremost we have to get clear reporting visibility on that I'm sure some folks are listening saying I don't have that data fair well I push back on that as you can still kind of aspire to get close to that and that's probably a good follow on conversation how to manually calculate your own cack same concept with LTV and understand the long term value one of the former CEOs I used to work with talk a lot about the partner tax chris and tree heard that phrase before by hey we have to we're paying like revenue share on this oh the long term that it impacts our LTV sure yeah still should be offset by cost of customer acquisition of my opinion yeah and the broader thesis that we talked about a few minutes ago is this idea of like being able to underpin that with what is my ROI so to put it quite simply you mentioned earlier like each one of us on the call has a salary we we at we get paid and we also my team as a whole has a whole p&l and also a salary line item in our in our finance balance sheet if I'm going to spend X amount of dollars for my team for next like next year how much do I expect to get back what is the like say revenue per head count I'm expecting to generate relative to the rest of the business and what's that rate of return when I think about okay I'm going to spend X I get Y back as a business with the number I'm signing up for next year might be the X number of millions of dollars how much am I making back and it can't be let's break even and keep the lights on it's got to be something three five extra beyond so those are a few things I think about but really just put a ball on it cack LTV ROI cable and then having that intelligent conversation with our finance partners about what matters to them and making sure we're seeing things the same way I mean that that was beautiful that was definitely my love language and it was great to see you light up in this segment I think you can honestly teach it whole course on like the economics of of channel and partnerships because that you were written your comfort zone there lots don't pack there and get your reaction to so first things first on like the cack and LTV thing you may sound like that's not something I need to understand but again going back to like that feedback from like rich gardener to me and what Chris is saying like the more you understand this you're going to be so much better off so like a simple example in the cack side right like a lot of us say on the agency or channel side you might have a rev share incentive structure with your partners right well that's a part of of acquisition cost to generate revenue through your partnerships right so a simple thing like you might you might be negotiating with partner and let's just say you offer 10 to 15% commission on all revenue generated uh for for one year and the partner pushes back and it's like we want that for two years where I see crazy stuff like in perpetuity as long as that referred customer stays a customer viewers and you might be like oh come on boss let us do that it's like are you like extending it from one year to two years rev share commission owed has crazy impact on your margins right and so simple things like that you might think are subtle but when you have the financial rigor that say Chris does you'll understand that like there's a massive difference from promising a partner two years worth of rev share uh commission versus one year and on their retention side the LTV side you know companies hate when you're spending all this money to like stand up a partnership and they refer maybe a couple batch of deals and then they largely go inactive right and therefore you're not really getting a lot of lifetime value from it so um those are some of the things that I think about when it comes to um that and then the final thing I'll say Chris and I want to get your reaction to is uh one time uh I was maybe 12 months in to leading this global partner program one of my last roles and I uh we we initially had a quota model it was all closed one source revenue for our partner managers and we at the time we were on a 4x quota model which was whatever your OTE was let's just say it was 150,000 us your quota annual quota was 4x that so say 600,000 in annual realized revenue um so that was what we started with to kind of get people comfortable but then as we started to scale we had to like up that to say 5x and that was like a huge shock within the team like why are they doing this you're just raising our goals arbitrarily and so what I had to do is I had to sit them down and I walked them through our entire P&L right I said okay you know what I understand at your frustrated because we're increasing quotas so to speak but we've ramped up now expectations are there and right now we're like barely breaking even as a department but getting going from 4x to 5x is all the sudden going to make us a profitable function and we can reinvest those profits into more headcount more MDF more aggressive things on the partner side so the point blank question for you Chris is how do you think about kind of communicating and educating and enabling your own team on kind of why certain decisions are made at a high level kind of backed with financial principles yeah I mean it probably comes as no surprise to you based on the conversation being earlier but it starts from a first principles perspective somewhere what you just said of outlining the brass tax of like first of all we're not we're not running a chair we're not here break even we want to make as a as a as a line of business the partnerships function also can't be a loss later it may start off that way but it needs to eventually prove out the overall investment thesis and so starting from a place of understanding of like we are working towards a level of profitability above me on break even and to get there we have to get greater efficiencies from the team and as we all know we are in this day and age we also have AI as a huge tailwind to help us achieve some of those things as well so that really helps our ability to be able to manage partners and manage them especially at scale and so I think starting from a place Chris is like yeah practically what are we trying to accomplish why are we trying to accomplish that and how does it trickle down what's that waterfall from the top line of the business to the department level all the way down to the IEC level and making sure that we're connecting the dots along the way I think most folks when they hear that line of thinking it starts to click for them or as when disconnected or broken they they kind of lose the narrative and ultimately it might become a little bit disenchanted with the process I totally agree I think that's one of the most important excerpts for this entire episode that will make sure to emphasize but if you have a firm understanding everything that Chris just walked through you're going to think about your role and your kind of place in the org and your own kind of P&L in a totally different way and you'll start thinking differently about how you make decisions how you make bets how you say yes to who you even decide to partner with which brings us to one of our last segments which is on calling we're calling the volume trap why more partners is often negative ROI and this is again something that you've already spoke about and our passion about so first question is you've called it you know 200 dormant partners is worse than 20 deeply integrated ones which I personally resonate with so help us understand why is it worse like where is that hitting cost walk us through kind of that anecdote yeah I mean I think when we're faced with a situation like that when we first have to start from a place of understanding that volume trap like that is what happens when you optimize for you know being it being almost every room with the every type of partner instead of the right rooms the right types of partners and so presence to without proximity to a real decision is just noise and so we think about how How do we find ourselves in a position like that one? We find ourselves in a position like that one first and foremost, because we probably don't have a clear and demonstrable view of what our ideal partner profile is. And I'm sure you've been there. I've been there. I've probably committed that transgression at least a few times myself where I'm a little loose and lax on ideal partner profile. And it ends up rating this trickle-down effect of, okay, now I've got a bunch of partners. And the reality is a lot of them are not doing much. They're very dormant and are underutilized in a creative of challenge because now we have signal and we have noise. And we cannot, we have to separate signal from noise in order to be more efficient and actually generate the returns we're trying to try and to generate from a business perspective. So I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm on record. I think the biggest mistake that partner programs make in partner operators make is other investing in too many partners, which just dilutes everything, you're stretched in and or investing in the wrong specific partners. I think those are just death knels, right? Like it's, I've made that mistake. And you make a big bet. You write a big check that other people have to help you cash and it can be disastrous. So I'm fully with you on that. And then to, to, to kind of follow on to like the partner life cycle journey. So, okay, I think we're, we have clarity now on like, be careful about who you partner with and how many people you're partnering with and like make sure you kind of go through the right stage gates to make sure that you're actually ready to take things on. So now let's go to the next stage in the partner life cycle, which is kind of the activation piece of it as well, right? Which is another, I don't want to say everything's important because then people are going to think nothing's important. But picking the right partners, getting them going is great. But then activating, like we're doing this huge survey right now with HubSpot and Crossbeam. And by far, one of the biggest bottlenecks that we've uncovered, maybe not surprisingly, is just a lack of activation, right? Like just poorly defined activation, who's responsible for it, et cetera, et cetera. I know you have some thoughts on this. So can you help us understand like, what, what does activating a partner literally mean to you in your own definition? And maybe what are kind of some of the stages that go into the activation? Because this is definitely a major, major topic right now. - I wish I had like silver bullet answer for you on this. Because if I did, I think that we probably do in town because the revenue we're doing right now. It is, it is for real. It is an area of focus for B by team. It's been an area of focus for every team that I've had the benefit of being a part of for the last 10, 15, 20 years. Activating partners is like, we too often sign a partner and there's not enough thought put into what happens next. And the reality is that we first at the start from the place of understanding what is activation. And this is where like we as partner professionals are somewhat challenged because we have a different, like you can go to five different partner people, ask them what is partner activation and how do you get five different answers? So about what does that mean? How do you define that? Whereas if you had a similar conversation than marketing yourself, they have a lot more clearly to find metrics than they can rely on. - Right. - From my perspective, the way I have tried to define it is that activation for a partner is what happens when they actually perform the action that you have signed them to grow do. - So so, in my line of work as generating inbound like referrals for the business. And the reality is until that happens and it happens predictably and repeatedly, they haven't really activated. And so we have to ask ourselves a question of, well how do we then get that to happen? And I think there's a lot, those lots of, you have to go into that answer, especially if we go back to your earlier point of like, when you have 200 different partners, there's a lot of noise there. So how do you get them to activate effectively? There's so many ways we could take this course. One piece of this I look at it as like a, we have to fund them and lead into like, I'll call it programmatic activation. It really mapping out that partner journey of saying, okay, for this portion of the partner journey, what are the things that we know are proven to have success with partners? And a lot of folks listening, I'll be like, I don't know, I can't demonstrably say that. And my challenge back to that, someone who thinks that way is, if you're sitting here, you probably already have a handful of partners who have activated correctly, right? Like they are producing revenue for you. And if so, inadvertently already done this successfully. So doing the forensic analysis on what worked there and trying to develop a thesis on why, then gives you the tools to be able to say, okay, now what can we apply at scale to the rest of the partners we have? And where we have to start to bifurcate Chris, is like the high touch partners where we can afford to be more hands on and more custom and bespoke. And then down where a lot more partners, how can we do that in the more automated? And as Darry say, in a more PRM layered, there were UPM layered fashion to do it in a automated more automatic fashion, to be able to give them the right tools, the right resources of the right time during their journey. So there's a lot to unpack there, but the reality is there's not any single one answer because we have to start from the first place to say, what is activation? I bet folks on the list are saying, well, I know what that is, it's different for me and here's why. And like respect that, where partners is a partnership is a funky business for that reason. We all have kind of slightly different flavors in some of the same metrics. But I'll pause again and talk about this for another hour. What are those? Seriously, I seriously could, we need to hold serious, but I want to double down exactly, we just said like definition of activation. And I don't want to talk about like a qualitative definition. I want to talk about like a concrete definition because I think this is really, really material, which is to say that like a lot of the orgs that I've worked at, you know, we all have our like partner pipeline staging setup in like your CRM, right? Sales has their pipeline and then partner team has their pipelines, maybe agency pipeline, tech pipeline, et cetera. And then most of the orgs that I've worked at were observed into their activation pipeline is like, hey, like you have a partner in the onboarding stage and they have to complete all these things. And then in the activation stage, as soon as they say, refer one close one deal, right? That's kind of their definition. And that way it's like trigger based formulaic, right? It's block or white. My issue with that, and it goes back to something you said, you said, what is the thing that I'm hoping this partner will deliver us, right? And you did reference say delivering a close deal, but you said with regularity and predictability, which is my love language. And so that's what I want to ask a point blank. I think it's a huge mistake for the bulk of partner programs to have your formal activation exit criteria within your own staging as like one referred deal, right? You know why that's a problem? Because doing something once doesn't tell me much, right? Because that's the honeymoon phase, right? You're in your-- you've just got married, right? That's the easiest time in the relationship, typically, because it's the simplest, right? There's the most excitement level. So show me it more than once, and then I'll really believe that you're activated. And we know this because in this report we're building right now, we ask like, hey, if you had 100 partners in your portfolio or of all the partners you have, how many of them do you actually consider active at this very moment? And the average right now is 25%. So if you've got 100 partners, only 25% of them are active, so answer that, react to that, Chris. Like, how important is it to have specificity with respect to like literally what your activation exit criteria is? And would you agree that having something as concrete as, hey, just refer us one deal or one closed deal, and then, oh, you're activated, and we're just going to take care of you for life. Do you agree with that being maybe an issue? I do. I'll start off by saying like, I think this-- the phrase that comes to mind is like, you can't improve, but you can't measure. For us to get a predictable, efficient, scalable, with this kind of motion, we have to first be able to measure. And to be able to measure, we have to have a defined metric. So yeah, it cannot be a qualitative-- do we feel like we'd like to be at the part of-- has to be a quantitative here is the criteria by which we are saying the partner has been activated. To your point about the criteria being not just one thing, one time, again, we're in the business of making this as efficient, predictable, and scalable as possible. So we're going to prove it mode until they do that. So yeah, I fundamentally align and agree with your sentiment that we're seeking greater signal there, not just a one-time event. The reality is that it's a path to house of cars. You build your business on top of it. It could topple over at any minute. If you're saying it would be a bunch of activated partners that truly are at risk, they're not actually doing something. Yeah. Extremely well said, again, that's another topic we go for a long time on to. But I think the key takeaway there is you have to be really careful as you define staging. What does it mean for a partner to pass discovery phase? We're letting too many partners through there. You have to aim to disqualify and be pleasantly surprised that they qualify versus always trying to qualify. Same thing for onboarding. You need to thread the needle there, you have to be very intentional and careful and get the advice of other people at your company, who might be involved downstream. So it sounds like we're in line there. Cool, but we're at time, Chris, so final question for you to get you out is if you could give one piece of advice to any channel leader trying to operationalize partnerships with real rigor that clearly you have in 2026, what's the highest leverage move that you would advise them on? Yeah, here's what I'd say, Chris. Start from the customer and work backwards. Understand the customer journey, not the partner journey, the customer journey. That might mean getting close to your sales day. It might be getting, meaning getting close to your CSD. It might mean getting close to your product team. Understand the customer's motivations, their journey, the moments where they have to make a decision during that customer journey. And there's more than one. There's multiple. And then find the partners that are already at those moments. Build a defensible ideal partner profile around those moments on that journey, not around the partners who are knocking [BLANK_AUDIO] your door, pitching you, saying, hey, we should do these two things and be awesome again. That's a sales pitch. Find a follow-up for your journey. Yeah, I love that. We've had numerous leaders on the show, index on like customer's interest, like Nelson Wang. And I totally agree, you can learn so, so, so much by obsessively studying the customer because mapping the partner journey, how the hell are you even supposed to do that unless you really understand your customers journey? And if you really understand that, you can work backwards, so to speak. Which channel partners, which service partners, implementation partners, tech vendors, so to speak, if you're an integration partnerships, go study the tech stacks of your top, top customers, right? That's a really great clue of maybe some of the ISVs that you should be partnering with as well. So, look, Chris, this was, I could honestly go on for hours, really appreciate you having on the show, and we'll be sure to link some of the articles and whatnot that you would reference the show. So, thanks so much, Chris. Ben Pleasure. Thank you, Chris. All right. Well, until next time, if you like what you heard today, be sure to subscribe to the partnership mastermind podcast and we'll see you next time.