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September 7, 2018

Why it's time to reconsider joining an agency partner program

Mike Sędzielewski
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Change is coming for agencies. Digital transformation is pushing them into the arms of marketing technology vendors. To woo local experts, SaaS MarTech giants are coming up with partner programs full of financial and branding incentives. But what's on the first sight looks like a win often hurt agencies, business relationships in the long run. Why so? And what marketing agencies can do to stay relevant in the digital market? Read on.

Change is coming for agencies. Digital transformation is pushing them into the arms of marketing technology vendors. To woo local experts, SaaS MarTech giants are coming up with partner programs full of financial and branding incentives. But what's on the first sight looks like a win often hurt agencies, business relationships in the long run. Why so? And what marketing agencies can do to stay relevant in the digital market? Read on.

Photo by rawpixel on Unsplash

Substance or suspect?

On the face of it, a partnership with a large Martech vendor brings an agency great profit. New leads, cross-promotion, affiliate fee, discounts, exclusive knowledge resources and better support for the end-client. Its enough reason for management to consider enrolling in such a venture. All the more reason to do so, when competitors have already published their partner certificates and badges.

But before you catch fire, let's go through the points which massive Martech vendors don't publish in their polished offers.

Massive investment

Before you can tap into partnership fruits, large marketing automation vendors require agencies to get certificates. Taking courses and exams costs time and money. And it gets worse if you want to step up in the partnership ladder. To get more brand exposure or extra streams of revenue, more employees need to graduate from the vendor's "academy". Besides the required effort, this is an easy road to becoming dependent on the vendor in the long-run.

But there's another type of unhealthy reliance on the line. Becoming a certified agency partner force you to sell only that software and don’t recommend or implement any other competing platforms. This might be a ball and chain when you face a lucrative client which doesn't use vendor's products.

Less control

When you recommend a marketing automation platform, be sure your client will hold you accountable for things that won't go right. As the company your client trust, you should guarantee the budget for the new marketing solution won't swell up like a balloon. There are two issues that may cause such bloat:

  • Tech/data/process requirements mismatch - marketing automation platforms work only if you feed them with data at the right time. If such an infrastructure isn't ready yet, then the project budget and timeline sheets will be smashed with "development services" items. And they can become pricey as ****there's little chance that a vendor will provide custom development services to ease the integration for a specific setup.
  • Pricing - often marketing automation platforms charge based on usage. But to enable some enterprise features the pricing doubles or triples (take Hubspot's pricing for example). You should ensure you have evaluated client's requirements in breadth and depth, otherwise, it may happen the bill will soar a couple of months downs the road — when you realize that the cheapest option to satisfy the client's need is to upgrade to a much more expensive plan.

Ultimately, when your brand around a single software vendor, you better be sure that it's still going to be around for some time. Otherwise, your client will need to reinvest all that time and money in deploying and learning the new platform — which will lead to a trust crisis between you and your client.

Uncertain future

What can be heard whispering in backchannels is that some partnerships might turn not as profitable as advertised in the long run. The reason for this is the voracious appetite of some of the Martech industry leaders. Their goal is to transform their products from being just a handy tool to a marketing beast. The beast, which is going to replace the majority of your agency tasks. It's not just about AI which is still early stage and doesn't bring much value for an average company. You should be afraid of battle-tested features that are taking more and more of your land, but also good quality professional services they've recently started to provide.

Finally, marrying to a vendor and making it a big part of your offer means you'll face a whole new level of competition. Marketing automation leaders have thousands of agencies, with some of them having to resell, consulting, and integrating the vendor's products at its core. And big vendors won't be skewing the playing field in your favour, it's the other way around — you have to fight with your elbows to get more of this deal.

So what can a forward-looking agency go about it?

API-first marketing tools to the rescue

I don't want you to avoid technology partners at all. There's a growing evidence that because of technology investments CMO's budgets are overtaking CIO's and you surely want to take a piece of this cake, right? The alternative gospel I'd like to preach relies on marketing technology too.

Rather than giving away the majority of revenue to Martech giants, you can extend your offer with marketing technology integration services. As McKinsey says, you can become a "hybrid, who speaks both marketing and IT, and naturally see the connections between them". "But becoming a Martech integrator needs plenty of developers!" - You'll say. Yes, you need to invest in technical knowledge, but with the birth of API-based marketing tools, the must-have requirement for a sizeable development team doesn't hold true any more. So how is it done?

Let's start with what an API-based solution, Ed Shelley from Chart Mogul defines with these features:

  • There is NO user interface (GUI). Or in some cases, there is a GUI, but it’s secondary to the core product.
  • Interaction with the service is through a web-based API – a programmatic way of connecting services and transferring data across the web in a machine-readable way.
  • The value of the service is usually in the data that’s delivered (through the API).
  • Pricing is often usage-based, meaning that the cost is based on the number of requests made to the API.

(I've elaborated on the introduction to API-based solutionson ChiefMartec blog)

How can you use such a creature to overcome the problems we've talked about?

Flexibility, credibility, control

First of all, API-first platforms don't offer A-Z solutions in a particular marketing area. Instead, they offer building blocks. And it's your role to put them together to satisfy a client's need. Yes, your developer has to understand the platform, it takes time and money. But the overall solution achieved by connecting your knowledge with technology will be much more suited at the end of the day.

This is because you can roll out the solution iteratively — you have full control over the software and you pay for usage. You can also easily integrate with existing infrastructure, no bottlenecks cause by format mismatch or mundane and costly import/export processes.

And even the "learning part" is more pleasant with the API-based solutions. First, the API-first platforms I know don't enforce any certification if you want to become business friends. Second, to please developers (who don't buy or use things if they're not blatantly clear and transparent from the get-go), they go extra miles to explain the platform capabilities in details to the users and convince them they can quickly bring themselves up-to-speed. So, all the materials on the plate (see Contentful, Twilio, MailChimp resourceful knowledge bases), no exams, no paid training, no strings attached.

Instead, they provide pre-built software components, tutorials, and interactive guides to develop a custom solution in no time. With such setup, your development team doesn't really have to be big!

There's one more shade of flexibility which comes with an API-based tools. You can use building blocks to create a solution branded as your product. Some providers even allow for white labelling of every part of the platform. Being recognised as a solution provider or a know-how owner will definitely help you improve your margins.

This all constitutes a lightweight form of partnership you engage in without risking your position and clients' trust.

API-based partnership programs

API-first platforms offer partner programs too. Enrolling in such partnership not only will allow you to satisfy clients requirements better, but you will also avoid some risks related caused by going all-in with Martech giants. And you can still get the perks like discounts, better support, exclusive materials, and ultimately new leads.

Tapping into the digital world and staying solution-agnostic at the same time sounds like a good long-term plan for becoming a successful marketing agency, doesn't it?

Voucherify has just announced a partnership program for agencies which want to offer 1:1 marketing personalization services. Contact our partnership team.
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