Partnership Value Modeling

In partnerships, end-client value shapes and defines partner programs.

Value modeling is a framework that formalizes how a product or solution creates value for a customer (or group of customers) relative to an alternative.

This is how myself and my team use it:

I get the partner team to I.D. factors that can be measured that show not only the promised value a potential partner can deliver to our org, but also the tangible value we can deliver to the partner and their customers, ahead of defining the ranking priority of each factor.

For our program, it helps us understand and quantify the value—or benefits—each partner brings to the channel and ecosystem alliance.

We use the following structure:

ID our stakeholders: this is everyone involved in our program (internal, external, etc).
Define our program objectives: We clarify exactly what we’d like to achieve with that partner in our program. Is it access to new tech? Increased revenue? New market penetration? Lead share? To cut costs?
ID our value drivers: We then assess the key value drivers of those program objectives that will help us reach our goal. These are the specific aspects that will contribute to our program. Is it expertise, market access, capabilities, resources, etc.?
Quantify their value: We then assign measurable metrics to each of these value drivers. Are they macro—i.e. partner LTV, VS, CAC—or are they micro, such as integration adoption or revenue by partner? This helps quantify the impact each partner has on the success of the partnership.
Evaluate partner contributions: We assess each partner’s contribution using the identified value drivers. This helps ID the value of our partners' contributions, and how their strengths align with the end goal of the partnership objectives.
Develop a value model: This is a model that adequately represents and clarifies the relationship between our value drivers and our objectives/goals.

The value proposition canvas

Remember when using this process that it is likely that your framework can be similar or completely different.

As a guide, I've recently adapted and tested a popular working value modeling tool invented by Alexander Osterwalder and Yves Pigneur called “The Value Proposition Canvas”.

I love it because I am a visual learner, so I can have it up on the smartboard and plaster sticky notes all over it if necessary.

It is traditionally known as a customer-facing framework, but can be just as easily and effectively adapted to the channel and ecosystem space while keeping the end client central to the experience.

Here it is in more detail.

It can also be structured to suit almost any program and the partner value you need to identify to be successful.

Example workflow for leveraging the Value Prop Canvas

Here’s how you can use this framework to drive more impact with partners:

Choose a partner segment/profile.
Identify the goal—the objective the partnership will bring to your partner's customer.
Create a list of jobs and prioritize them according to how important they are to this outcome.
Identify your partners' customers' pains and prioritize them.
Identify all of their gains and prioritize them.
Pick the top 3-5 pains and gains that are the most important and relevant to the success of the partnership and outcomes of their client’s needs that relate to the most important jobs.
Create a list of all the benefits your product or service offers to your partners' customers.
Create a list of pain relievers—things that your product or service can do to alleviate your partners' customers' pains.
Create a list of gain creators—ways in which your product or service creates partner gains for their customers.
Pick the top 2 or 3 (gain creators and pain relievers) that make the biggest difference to your partners' customers.
Link the value your products or services created to your partners' customers and choose the most compelling value generators.
State clearly how your alliance solution is better than your competition.
Are there any pains or gains that your product doesn’t address with your alliance?
Strategically, are these important for you to compete? If yes, then begin to innovate; understand how to create the offer.
Test your partners’ value proposition(s) with your partners' customers.
Create a focused value statement that is free of jargon or gimmicky semantics. You want your partners and their clients to believe and trust your 'why'.

Here’s what that framework would look like when applied, for example, to a mobile App solution.

Outcomes and benefits of the Value Model

Using this structured approach will allow you to:

Monitor and adjust the performance of the program
Easily identify any discrepancies
Enable continuous lifecycle improvement
Clearly communicate the value proposition to all stakeholders involved
Enable partners and leadership teams to gain a clear insight into the measurable benefits and impact of your program on their org

In that sense, it acts as an excellent internal partner program communication tool.

This becomes an iterative process that remains effective, fuelled by mitigating the risks via impactful contingency plans to ensure your program remains effective and aligned with your company objectives.

When you deploy this framework, three things should happen -

You will know the exact value your current and potential partners can bring to your customers.
Your team will know the contextual benefits your program brings to their department, your customers, and your internal and external stakeholders.
You’ll be able to gain clarity of objectives, assess contributions, and quantify benefits throughout the partnership lifecycle.

Final Thoughts

Value modeling can be a powerful tool.

If understood and adopted effectively, it provides a systematic approach to building, managing, and optimizing partner programs.

Because you're building a common-language bridge.

And it’s only ever a good thing when you’re able to speak the language of data-driven decision-making and able to clearly and confidently answer:

But why?

Happy modeling.

If you’d like to find out more about how to apply this framework to your partner program, and other B2B channel partner strategies to your business, visit Arys @ www.arysconsultants.com

We look forward to hearing from you!