The Partnered Podcast

061: Selling with Partners with Rich Gardner

Episode Summary

Welcome to The Partnered Podcast Episode 061 with Rich Gardner, VP of Global Strategic Partnerships at Klaviyo. Enjoy!

Episode Notes

Join host Adam Michalski as he interviews Rich Gardner, VP of Global Strategic Partnerships at Klaviyo.

Rich and Adam discuss transitioning your org from direct selling to selling through/with partners. We get into the weeds on how to minimize channel conflict between sales and partnerships and even how to set up compensation for long-term success.

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Episode Transcription

Welcome to The Partnered Podcast, the podcast where we interview enterprise partnership leaders from the world's best SaaS companies. The goal is to give you an inside view on how leading organizations drive the most partner sourced and influenced revenue out of channel sales, partnerships, and alliances. 

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Adam Michalski: Welcome back to The Partnered Podcast! Extremely excited to have Rich Gardner on today, VP of Global Strategic Partnerships at Klaviyo. And Rich, just to kick things off, can you tell us about your professional background and how you got started at Klaviyo?

Rich Gardner: [00:01:13] Sure, Adam, thank you for having me first, a really pleasure to be on the podcast.

Yes, certainly. So my professional background actually has had some interesting chapters. I actually practiced law and worked in politics many years ago, Adam, which might not seem like an obvious start to someone now in strategic partnerships, but, but actually there are a lot of commonalities between what you do as a lawyer.

And even as someone on a political campaign to find consensus and to sometimes serve as a diplomat and an advocate. So anyway I have been at Klayvio for about two and a half years, and I joined Klayvio at a time when they were, the company was just starting to think a little bit differently about partners and the ecosystem around it.

And I'm excited to dig. With you and your audience on that today prior to Klayvio, I spent five years at an HR marketplace, a company called Catalent, which is like an Upwork for high-end consultants, kind of a strategy consultant profile. And before that I was in a tech enabled services company called Gerson Lehrman group, which is an expert network marketplace.

So all of that was post lawyer. Lots of tech enabled services businesses. Very 

Adam Michalski: [00:02:28] cool. Very cool. And I mean, I'm particularly excited about this episode because I know that the partnership organization at Klaviyo seems to be a very well oiled machine. Right.

Rich Gardner: [00:02:37]  It seems that way on the outside. 

Adam Michalski: [00:02:39] But yeah, I mean, just to set the stage, but I'd love if you could just give a little bit of a background on what exactly Klaviyo does, what problems you guys solve? And what the partnership organization looks like from a structural perspective? 

Rich Gardner: [00:02:50] Sure. So Klayvio is a marketing automation software company. We are used by out 75,000 e-commerce businesses. So folks who are selling online and when you're selling online, you have lots of data about your end customer. So if you're, you know Adam's bow

Adam has a lot of information about his customers in lots of different places, the way. Adam's bow in this example would use Klayvio is as the hub for all of your customer data. So where's that one place, Adam, that you can go to design marketing experiences, leveraging all the data you have about your customer.

So before you send that marketing email, before you send that marketing text message or whatever you're doing on the marketing front, how are you leveraging data? To make that marketing experience really personalized and. That's what Cleevio does for our customers. We capture the data about their end customers in a single place and give folks the tools to build marketing experiences using that data.

So that's what the company does based in Boston, headquartered in Boston about a thousand employees. Now fast growing e-commerce has been riding a wild wave of growth over the last year and a half. I mean, I don't think anyone would trade a pandemic. Business results. But the fact is that e-commerce has grown a ton as a result of, of the pandemic.

And so that's, that's, Klayvio in a nutshell, 12 years old as a company, roughly recently raised money in as part of a series C round of financing. So partnerships at Klayvio when I joined. Klayvio two and a half years ago, I originally started at him as a consultant here. So I had, I had left my position at Catalent was consulting with them and taking on a couple of other consulting clients, mostly focused around business development, go to market kinds of projects.

And I really enjoyed that work. That's when I met the founder and CEO of Klayvio, we were introduced to each other. An investor in Klayvio. And at that time, Andrew the CEO was starting to think differently about the role partners and the ecosystem could play for Klayvio in the long-term at that time partners at Klayvio, mostly men.

Agencies and agencies, marketing agencies who were referring customers, referring leads to Klayvio Klayvio sales team for the most part would take those leads, close the deals and pay a rev, share to the agency for the most part. That's what partnerships look like at Klayvio. And that was. I think that there's some value to what was happening with partners at that time.

But today it looks, partnerships looks very different. I know we'll talk about that in a minute. I met Klayvio just as their mindset, just as the philosophy around partners was starting to change and they were looking for help in driving some of that change. Anyway, so that's what partnerships look like here.

Two and a half years ago, there were four or five channel account managers who were new. In seat. When I joined the company, the channel account managers were taking leads from agency partners, qualifying leads, passing them to the sales team and then paying rev, share to the agency pretty basic. Classic rev share model Adam.

That is common in certainly in this industry and many others. But I know we'll talk a little bit more about how that's evolved since those early days. Yeah. I definitely 

Adam Michalski: [00:06:39] want to get into the weeds there. And for any of our listeners, I can, if you go to Adam's bow, we'll give you 15% off.

No, just kidding. But exactly ABC, right? But no, in all seriousness. So let's, let's start high level. Cause I think. Really well, they're on the transition. You know, going from just kind of agency partnerships to really a more robust partner program. And I think a lot of companies and a lot of our listeners are in a similar situation where they may be stepping into an organization that really hasn't been thinking partner first.

They've been largely direct direct selling. So could you just kind of share a little bit about how you transition the org from really being, you know, direct focus to really selling more with, or through partners? 

Rich Gardner: [00:07:20] I think the key, the key moment, the key question to ask when you are either launching a partner program or partner strategy, or looking to pivot your partner program or partner strategy.

The key question to ask is what are we trying to do? Why do partners matter? You know, what is it that's driving us to build this program or change our approach. That is the key first question, because there are lots of different answers to that question. Adam, one answer is, you know what partners matter because they're our lead gen source for the business.

They, they generate leads. They bring us business and that's really important to our growth. Okay. If that's your, why. The reason why you're building this partner program and organization, you will then go about building it in one way and you will build structures and programs and hire people that fit that profile.

Okay. But what if your answer to the question, why is different, like partners are an extension of Klayvio in the marketplace? Well, okay. That has more than just sales components to it. That has. Maybe customer support or customer success components to it. It has marketing components to it, right? If partners are extension of the business, that means they're an extension of your brand and extension of your messaging and extension of your design.

Like all the things you care about, maybe they are an extension of your product. As well. So Klayvio marketing software automation, as we talked about, we we have email, we have SMS, but we don't have loyalty software and review software and payments software, and all of these other things that partners maybe could do to extend our product.

My point is only that you got to start with one. Adam and that starting with Y starts at the top of the company. It is very important that the C-suite CEO CRO chief revenue officer or whatever your C-suite looks like at your business, there has to be alignment. With what you're trying to accomplish with a partnerships strategy and then everything can flow from there.

That is my, that is my core piece of advice. And I am very fortunate that at Klayvio I met the company at a time when they knew that the, their approach. Partners historically had been limited and they wanted to figure out what more could we do. And that's what I was able to, to help the company do.

But they had already started to, they had already realized the philosophy was more limited than it needed to be. I think that, 

Adam Michalski: [00:10:02] yeah. Really great point, because I think what's really unique about partnerships. We talk about this frequently on the podcast is that it's not one size fits all. Like it really could mean a completely different thing depending on your organization, depending on your goals, kind of what you outlined, but just to press you a little bit further on that, like how did you go about prioritizing, you know, where like, where you wanted to focus because at the end of the day, partnerships are unique and that they could add a lot of value in different ways.

You know, your C-suite particularly is going to want to see results in X timeframe. Somebody might want to see revenue. Somebody wanted to, they might want to see marketing benefits. Somebody wouldn't want to see product like product KPIs. How did you go about, you know, managing that or prioritizing, you know, the benefits and really making sure that you could use your limited resources in like the most effective way 

Rich Gardner: [00:10:52] possible?

Yeah. Good question. So the, what I did and my, my advice. Two others would be to start with what's most familiar or most core. So in Klaviyo's example, as I mentioned a few minutes ago, there have been agencies bringing Klayvio leads for years long before rich gardeners showed up and there had been account executives and then channel account managers taking those leads and rupture being paid out to the agencies.

So that was already happening. It was very transactional. And we knew, and I believed very strongly that we needed to build more of a relationship with our partners to unlock all of these other things that they could do for us and that we could do for them. But I started there. I started with what was familiar.

How do we take this? Agency program and build it in a way where we were building relationships with our partners, rather than just taking leads and giving them rev share. So specifically, what does that mean? It means incorporating some incentives, rev share incentive for partners who don't just bring us leads, but then actually manage that customer.

They actually manage their Klayvio service. So. Rewarding a partner, not just for bringing us the business, but then also for their willingness to build services around Klayvio that was a huge unlock for Klayvio and adding to the revenue benefit, the revenue incentive to drive that behavior is well worth Klaviyo's money because it saves us customer success, customer support.

Because partners are starting to build services around. Klayvio that, that's just one example of what I mean. And so we started, I started with what was core already, which was this agency lead flow rev share program. And we started to build around it. What more could we be doing? How could we provide benefit back to these partners beyond just revenue?

Adam, if they're going to be extensions of Klaviyo in the marketplace, what kinds of enablement materials are we giving them? Are we really investing in them being knowledgeable about our product and how to differentiate Klayvio are we co-marketing with them? Because They want access to our audience, but maybe they provide us with access to new markets, you know, as we expand geographically or to different types of customers, like just thinking about additional ways to build mutual value into the program.

Back then a couple of years ago, that was the focus. But we started with what was core because you have a very good point, Adam measurable results. And revenue is easy to measure. So we didn't want the agency rev share model to just be transactional, but we still wanted to be able to measure the revenue that was coming in through partners.


Adam Michalski: [00:13:53] yeah, I think that's such a great. Point because most folks and most organizations will basically just, you know, set up the partnership, go ahead, put a rev share in place and be like, all right. You know, like this thing is going to start spitting out money. And the reality is so much farther from the truth and that investing, you know, in that enablement, investing in that partnership is what really is going to make it free.

So at the end of the day, it's I mean, you're, you're asking a lot of your partners, they have to understand what your organization does. They have to really support what your organization does. And I do think the best companies are the best partnership folks really emphasize, like treating their partners as an extension of their own company.

So like understanding how, you know, like the new product updates, everything that's happening within the organization. Like if you don't keep your partners up to date on all of that, they're not going to be as effective as they possibly could. And one point that I wanted to discuss too, is you know, when you're talking about that transition to being more partner focused, I'd imagine like one of the things that I think a lot of organizations struggle with is you have sellers, you know, like the SDR, the account executives who are out there.

And they're just very, very used to doing their direct motion, you know, like they want to break a tax YZ. In your case, e-commerce companies are trying to focus on and you know, they have their traditional toolkit of, you know, cold outreach or like tried to break into the account, using marketing account based marketing, stuff like that.

How did you see that transition? From the direct selling? Like where were the pain points that those sellers had faced? And how did you go about making that transition as smooth as possible for the sellers so that they understood that. Partnerships could effectively be, you know, a great way for them to enhance their go to market rather than like another potential way in which like that relationship could go wrong or adding another variable into the sale that they may not necessarily want to add, because they've just known the direct motion for 

Rich Gardner: [00:15:42] so long.

Yeah. That's a really good question. I would say that Klayvio, we've had relatively. Small amounts, modest amounts of like traditional channel conflict between a partner team and a direct sales team. But we're not perfect, right? Like I just don't, I don't know that any organization is perfect. What happens here at Klayvio is our partners help at different points in the sales process that I'll walk through first, they bring us really good leads.

So an account executive who has to hit a quota and tackle fill a number every month or every quarter who's being fed really warm, qualified leads from partners tends to be a little more open-minded about incorporating partners into their sales process. And so not to sound too basic, but, but that is part of what happens here.

Like we're very fortunate. To you know, we have 250 new partners join our program every month. They represent a pretty significant amount of our sales enabled lead flow. And so account executives start with a little bit more open-mindedness about working with partners because they see the benefits on the leads front.

Then I think what we've learned is that some account executives. Are really excited to look for partner involvement in a deal because they know how to leverage that partner to move the deal forward. Like they're proactive. About asking their prospects. Are you working with an agency or you're working with a consultant and when they have that kind of information, whether that agency is in our program or not, if they're not, we try to get them in that account.

Executive knows how to work with the consultant to achieve the outcome that they both want, which is clear. Working for that customer. We have some account executives that take that approach very, very proactive. And we have others, Adam, who are used to dealing with a high volume, short term deal cycle who would rather skip any agency or consultant involvement.

So the reality is like everybody else. Lots of different types of personalities here. And and so those account executives won't be quite as proactive. They'll discover a consultant or an agency along the way. And then my team might get pulled into that deal cycle halfway through. It's always better for us to have as much information as early as possible so that we can leverage these partners in the right way to move the deals forward.

But we have account executives who take different approaches. I will say Adam, that at the, at the highest. At the enterprise level. So we have the bulk of our e-commerce customers are in the SMB or or even like entrepreneurial stage of their business. So they're relatively small. They're selling under a million dollars of GMV gross merchandise volume at the high-end though.

Mid-market enterprise. There's always, almost always going to be a consulting firm, an agency of some kind involved with those brands. They sometimes they're multiple. And so at that end, the account executives here, the direct selling team, they look at our agencies as co sellers. We have to have consultants alongside of us at that high end.

It's in the lower end where sometimes people have a different approach. 

Adam Michalski: [00:19:02] I feel like I could talk about this for the entire duration of the podcast, but I just, for sake of time, I will continue to move on. I think so many good points there let's talk compensation. So I think that this is a unique one that we touched on when we first spoke.

And thinking about like compensation in terms of longterm success across the partnership team in the sales team, because ultimately, you know, the buck stops with like how folks are getting paid out. So can you share a little bit on like how you think about setting up compensation for longterm?

Rich Gardner: [00:19:29] Yeah. So I'd, Klayvio partnerships is an, is an overlay model. And by that, I mean we're not another sales team, so it's not like that there are three direct sales teams and then partnerships is another form of direct selling where my team is closing its own quota and therefore leads that would be coming in could be fought over between the partnerships team or the direct selling team.

That's not our setup at Klayvio Klayvio partnerships is an overlay, which means my team has a revenue goal. So the company has an overall revenue goal, some percentage of which is attributed to my team. And then my team goes out and builds relationships with partners that hopefully yield that amount of revenue every year.

Now that revenue Adam, whether the deal is closed. By an account executive or aunt closes on its own, or it is closed by someone on my team, which does happen. Sometimes it all counts towards the revenue target. And so there's no, there's no fighting over credit. What's important is that partners are a source of a certain percentage of revenue here at Klaviyo every year.

Every quarter every month, whether that revenue is ultimately closed by an account executive or closes it on its own or by someone on the partnerships team doesn't matter. 

Adam Michalski: [00:20:56] And does that include influence revenue as well? That number or, okay. So if like an agency or somebody helps further down like the deal cycle that would still be included.


Rich Gardner: [00:21:06] The question we try to, this is, look, this is like, there's, you know, this, you live this every day. There's some gray area here, but the question that we ask at Klayvio is, but for this partner's help, would we have closed this deal? And if the answer is no, we would not have, then that partner should be credited.

And whether there are some situations where the partner might get. Credit towards their tier, but we can't pay them rev share for, for whatever reason or they get both. But either way, Adam, we want that partner to feel good because they helped us close the deal. So one other point on compensation is that an account executive that closes a partner sourced deal, an agency source deal, they get quota credit and they get.

So the only difference from a direct sole deal versus agency or partner attributed deal is that if there's rev share paid to the partner, which there almost always will be for an agency, the ref share averages when the payouts are 10, 15 and 20%, but most of our partners get paid in that 10 to 15% bucket.

The sales person's commission is on the net. Revenue. So the rev share gets deducted. From the sale and the commission is paid on that reduced amount, but I mean, it's a modest reduction in the light of the warmth of the lead in light of the partner's help along the way, like whatever the case may be. So the important point is an account executive doesn't feel like.

Either they get credit or the partner team gets credit, the salesperson gets paid no matter what. 

Adam Michalski: [00:22:45] And I think that that's, I mean, the core, the core thing, because otherwise, I mean, you could really, you know, notch up the channel conflict there, where if, especially if it's hurting the bottom line for each individual seller, like it can't be a competitive, like our combatitive.

So I think that that's such a smart way of going about it rather than doing like, you know, either or type, or I've seen a lot of different structures, which don't necessarily incentivize the best dynamic across, you know, the partner ecosystem. Very cool. I guess you know, if we zoom out a little bit here, 40,000.

Yeah. Let's talk about the future. Yeah, I mean, you've seen a lot of a lot of different, you know, partner ecosystems. You see, you've obviously, you know, seen Klaviyo grow as well. Where do you see the future of partnerships going more broadly or even at Klaviyo 

Rich Gardner: [00:23:27] more specifically? Yeah. So I would say starting with Klayvio because it's the world that I know the best.

You know, a lot of my time and focus and a lot of the organizations interest in partnerships over the last. Two years has been on the agency side, or if you use the term, you know, a services partner side, right? These are humans. These are consultants. They might be at an agency or they might be a freelancer.

They might be at a big systems integrator, but a lot of our focus has been on that side. Why? Well, it gets back to your question, where do you start? Will you start with what's most known, like what's core, where does what's most measured? And like the revenue that comes through those partners is, is Signia.

In the future though, like actually probably starting over the last several months and looking forward, I'm really excited about our tech partners. So these are in MarTech. The space that Clearview you could consider Klayvio is MarTech company. There are 9,000. Solutions software solutions in MarTech, Adam 9,000.

And they'll probably be 10,000 by the time we finish this podcast. And so what I'm excited about is thinking more proactively about how we can work with those other solutions to build out, you know, tech stack. For our customers, because our customers, aren't just thinking about marketing automation.

They're thinking about payments and reviews and loyalty and logistics and all these other things that they need. And so what can we be doing together with a lot of these. Complimentary technologies to deliver more data to our end customer, to deliver a better experience to our end customer, to extend Klayvio as a product for these customers and to open up go-to market opportunities for each other.

So it's not quite the same as it is on the agency side in terms of how we would think about leads and rev share and all of that. But a lot of our technology partners. Compliment us in the markets they serve. So maybe there are ways for us to grow through partnering with each other. So those are the kinds of things that I'm excited about.

Plus in SAS, Adam, like it's the dynamic in SAS is that on any one day technology company could be your partner, your competitor, your customer, and following the. Trends and those dynamics is just, it's the, one of the most challenging and interesting things about my job. So those are the kinds of things that I'm thinking about for here at Klayvio.

And, and looking into the future. I'm really excited to see what we can do on the tech partner. Very 

Adam Michalski: [00:26:06] cool. Very cool. And that's a great transition for my last question is for anybody who actually wants to partner with with Klaviyo and be part of your partner program, whether that be an agency or, you know, the tech partners now that you will be focusing more there.

Many of which are probably listening. How should 

Rich Gardner: [00:26:23] they get in touch? Yeah, I appreciate the question. So. Two things. One is you'd go to and we have information there both about our agency partner program in our integrations partners, or tech partners. The other thing I would say is you can email me

And I'm happy to respond directly on how to 

Adam Michalski: [00:26:42] get there. Fantastic. And for our listeners, I'll go ahead and I'll link out to both of those in the show notes, but rich, thank you so much for taking the time. This was extremely insightful. You've definitely shared a lot that you know, unfortunately we only have 30 minutes here, but we'll have to have you on again to get a little bit more into the weeds on the, on that transition.

And have you done it? So successfully, especially as you can, you know, continue to build out your tech partner programs. So thank you again for joining. I really enjoyed 

Rich Gardner: [00:27:04] it, Adam. It was my pleasure. Thanks for having me on and a lot of work to do, but I'm happy to come on at anytime. All right, I'll talk to you 

Adam Michalski: [00:27:12] soon.

Rich Gardner: [00:27:12] Take care. Bye-bye

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