Microsoft, Salesforce, Canva…most major SaaS brands depend on partnerships to bring in amazingly high percentages of their revenue.
In 2019, Microsoft reported $32.5 billion in revenue and attributed 95% of that revenue to growing partnerships with leading companies. That’s some major dough!
Partnerships are a big deal, and that’s why you’re here. You want to understand how you can get partnerships to work amazingly well for your SaaS org in the same way they work for these larger companies.
Here’s the deal.
For instance, salespeople spend at least 21% of their day writing emails, but only a small portion of these emails lead to follow-up calls. Even fewer lead to actual sales.
Partner ecosystems provide the best solution to these outdated prospecting strategies. But before I explain how you can get your partner ecosystem to work effectively, I’m going to explain what a partner ecosystem is.
Let’s dive in.
Understanding Partner Ecosystems
Here are some stats that prove partner ecosystems make a difference.
- The average business gets 18% of its revenue from paid search, but mature partner programs can generate 28% of revenue.
- “High-growth brands are three times more likely to use marketing partnerships as part of their overall strategy than no-growth firms. These high-growth firms grew 3x faster on average, and were 2x more profitable than their no-growth counterparts.” (Hinge Marketing)
- About 57% of companies use partnerships to acquire new customers. (BPI Network)
- “By 2025, nearly a third of total global sales are predicted to come from ecosystems.” (McKinsey Quarterly)
You need to start thinking about your partner ecosystem as a network, a network of interconnected companies and people who influence your prospective buyers. If you’re not engaging with them, you’re holding your entire organization back - networked selling (i.e. Account-Based Networking; ABN) is the future of sales.
But this isn’t a one-sided relationship. Your partners scratch your back, and you scratch theirs.
It’s a win-win situation fundamentally based on strong account-based networking (ABN).
What is Account-based Networking (ABN)?
Account-based Networking encourages your partners to become selling allies. In this role, your partners are an extension of your sales team and become another direct line of contact to your customers (effectively multiplying your sales organization by up to 100X). And you do the same for them by helping them influence people within your network who matter to them.
The prefix “account-based” is key. You and your partners are collaborating to better sell your products to specific prospective buyers. But what does this collaboration look like? Here’s an example. Hubspot and Salesforce are members of each other’s partner ecosystems. Hubspot’s Salesforce integration allows users to pass their data from Hubspot to Salesforce. Users can then use Salesforce to get a clear picture of how customers have interacted with the brand from a marketing perspective.
In this relationship, both Hubspot and Salesforce would upsell and cross-sell their solutions to their customers. So, a Salesforce partner would recommend Hubspot to a CMO who’s looking for marketing automation software. A Hubspot partner would recommend Salesforce to a CMO looking for a holistic way to view customer interactions with her organization.
Both brands are working together to sell their solutions. It’s also easier to sell because of the influence each brand has on its users. A Hubspot user is likely to trust a Hubspot employee’s recommendation. But the success of this account-based networking collaboration depends on how well both groups of partners understand each other’s products and how they help customers. Educated partners are the foundation for great account-based networking.
A well-developed account-based networking partnership improves close rates, fills product gaps, increases deal sizes, and gives your brand a competitive edge.
What is a Partner Ecosystem?
Whether it’s in relationships or business, partners work together and support each other to achieve a common goal. The same is true for a partner ecosystem. From the lens of ABN, partner ecosystems are a connection of influencers who work together and support each other to increase sales.
Influencer here doesn’t necessarily mean a celebrity or someone on social media with a whole bunch of followers. The influencers in a partner ecosystem are those people who impact the purchasing decisions of key decision-makers (e.g. C-Suite executives).
As an experienced revenue executive, you know that it’s often difficult to connect with these decision-makers. You could send cold emails and LinkedIn DMs until you’re blue in the face, but few C-Suite executives are willing to spend organization funds with a complete stranger without being strongly convinced.
The influencers in your partner ecosystem help bridge the gap. They already have relationships with the people you need to reach, and they’ll help you connect with these decision-makers. You reciprocate by connecting your partners with the decision-makers you know, and the cycle continues.
There are three main types of account-based networking (ABN) partnerships in SaaS: tech or integration partnerships, channel partnerships, and agency partnerships.
Tech/integration partnerships involve two software vendors targeting similar customers with their tech solution products. Think of Salesforce and Snowflake, the latter of which is available in the Salesforce AppExchange. This is a paid integration that helps Salesforce users efficiently and conveniently extract data from the Snowflake database.
An agency partnership is when an agency and a software vendor join forces to ensure all client requests are met. For example, HubSpot is an all-in-one software providing inbound marketing and sales tools. Additionally, HubSpot has agencies they work with that offer partners training, guidance, and support to grow their business and retain clients. This is a win-win for both the agency and the ISV.
Channel partnerships include a reseller and software vendor working together with their sales teams to identify suitable customers and close deals. Shopify is a prime example of this. Leveraging channel partnerships, Shopify made $673 million in revenue back in 2017, while its partners made $800 million.
For purposes of account-based networking, we’ll stay focused on Tech/Integration partnerships since these are the most common type of account-based networking partnerships.
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Why is a Partner Ecosystem Important?
Partner ecosystems are important for two main reasons. First, it is hard for any single company to reach all its potential customers. Partner ecosystems better position your brand to reach more customers.
Second, it can be even more challenging for your business to offer an end-to-end solution to your customer's pain points. A great ecosystem will fill the gaps in your product and service offerings to provide a comprehensive solution.
Examples of highly successful partnerships include:
- Apple and MasterCard: Apple revolutionized mobile payments, but to do that, Apple had to partner with MasterCard to integrate technologies. Apple got to be an innovator, and MasterCard improved its competitive advantage and attracted new customers.
- Airbnb and Flipboard: This relationship helps Airbnb users receive lifestyle content from people with similar interests. In turn, Flipboard receives a bevy of new users. Airbnb and Flipboard pride themselves as curators of great experiences. While Airbnb empowers travellers to see the world under their own rules, Flipboard helps travellers share their experiences through engaging mobile-friendly content. The partnership led to the launch of Airbnb Experience Magazines on Flipboard, where travellers could share information about their experiences in different parts of the US. Flipboard got to attract more readers to their app, while Airbnb got a marketing channel that could redirect anyone who would love similar experiences to their website.
- Salesforce and Slack: Thanks to this partnership, Salesforce users can seamlessly share Salesforce data on Slack and import Slack conversations to Salesforce. This partnership worked so well it even wound up in an acquisition! Both companies get users that are interested in their services from each other. It is also harder for users to leave either of the two if they're still using the other due to the seamless experience.
What are Surround Sound and Multi-Threading?
I described a partner ecosystem as a sphere of influence where each influencer has connections with key decision-makers in an organization. Sales teams often depend on building a relationship with one key decision-maker within an organization.
That’s risky since, for one, people don’t stay at companies forever. Some people retire; others leave their jobs for one reason or another. Also, your initial point of contact may not play a role in the final purchase decision. An expansive sphere of influence makes it easier to build relationships with multiple decision-makers within an organization.
The best part? Your sales team already has members of your partner ecosystem that can help them with surround sound and multi-threading. Sounds fancy, right?
Look at it this way. You can’t have a surround-sound experience without multiple speaker boxes. You also can’t create most clothing without using multiple threading techniques. Relationship building with key decision-makers functions the same way.
Surround sound within the sales context is all about influencing prospects or customers by getting multiple voices in the mix. Partners within your ecosystem provide multiple voices that help you reach more than one person in an organization. They’re your surround sound.
But who are you really connecting with within the organization? Your ideal prospect may be the CMO, and one of your partners may be able to connect you with that person. But you may have another partner who knows the product manager or the CFO. That’s where multi-threading comes in.
Multithreading is being able to involve multiple parts of your prospect’s organization into your existing sales process. Through your partner ecosystem, you can get access to a range of connections within the same organization.
How Can a Partner Ecosystem Help You Prospect More Effectively?
The best way to explain how a partner ecosystem can help you prospect more effectively is to look at a real-life example. I interviewed Eric Stein, Head of Partnerships at Branch, on the Partnered podcast. In that interview, Eric revealed the impact partnerships have had on Branch’s growth. Branch has thousands of tech partnerships and closing on $100 million in revenue.
Eric explained that there are three important things to understand about partnerships.
- First, you need to be clear about where your company is going.
- Second, you need to understand how partners can help.
- Third, there needs to be a joint value proposition with partners. That third point is crucial to the development of effective partnerships.
Branch had an interesting problem in its early days. It’s essentially a linking platform. Initially, it had some great adoption from developers but the market was changing and they needed to reach more enterprise players. The problem? Few companies have a linking platform on their tech stack wishlist.
But companies do need the capabilities Branch provides to engage customers. So, Branch needed to build into leading technology players that prospects were already using. They started co-building and account-based networking with email integration partners and then they entered the ad partner space. They then started offering customized integration solutions for brands such as Airbnb. These crucial relationships wouldn’t have been possible without their partner ecosystem.
The ROI was clear. Branch groups partner interactions into two buckets: sourced and influenced.
Bucket #1: Sourced refers to opportunities directly brought in by partners; e.g. an introduction.
Bucket #2: Influenced refers to endorsements/ and recommendations or even information from partners.
Branch uses Partnered to track the number of sourced and influenced opportunities they receive so that they can determine the right mix for their partner ecosystem. Tracking these partner activities at the beginning of the sales cycle helped them better track the dollar value of their partnerships which led them to invest heavily in partnerships.
I hope this story helped illustrate the power of a partner ecosystem. There are other ways that a partner ecosystem can help you prospect effectively. They can help you build a sales team network and increase your attachment rate across multiple partners.
You’re Building a Sales Team Network
What’s important to note here is that partner ecosystems help you connect with partner sellers who have already closed the deals your sales team wants to close. In short, by our building your ecosystem you are building your sales team network. In fact, in the example above, when Branch built out their ecosystem they built a sales team network that became their go-to-market secret weapon.
You can think about investing in your sales team network as essentially giving your sales team “cheat sheets” to each prospect. Your team learns how to sell to them, who to sell to, and what to avoid in the sales cycle. This allows your sales team to cut the sales cycle by up to 50%.
Partnerships and Attach Rates
If you’re just starting with partnerships, you can’t expect one partner to dramatically increase your business revenue. This only happens in rare cases.
Some companies may not even want to add you to their partner ecosystem because they feel your attach rate would be too low. The attach rate is where the overlap lies of your ideal customer profile (ICP); i.e. your prospects/partners customers and your partners' prospects/your customers. So, if your solution only benefits a small percentage of their customers then it will have a negligible impact on their bottom line.
That’s not all, though. For most B2B SaaS companies, the attach rate is low on a partner-by-partner basis, which further supports the need to have multiple partners in your network. It could also be true that you have a higher attach rate with a smaller startup that integrates well with your product. So, it’s not only important to have multiple partners, but it’s also important to carefully evaluate how well partners integrate with your software. Better integrations bring in more revenue.
Going back to the Branch story, let’s say Branch has a 1% attach rate with each of its 1,000 partners. This hypothetically leads to 200,000 more new customers who each bring in $2,000 of annual contract value (ACV). That’s $400 million in annual revenue. That figure would be far less if Branch depended on one partner.
A partner ecosystem increases your attach rate across multiple partners. That’s a big plus! So, what can you do to increase the chances of everyone in your ecosystem being happy and feeling empowered to increase company revenue?
Let’s dive in.
9 Tips for Creating an Effective ABN Partner Ecosystem
Many opinions exist for creating an effective partner ecosystem. With a focus on account-based networking, I’ve grouped this list into three categories based on my experience and the experiences of partner ecosystem leaders with whom I’ve interacted.
My aim here is to give you a blueprint you can share with your sales team. Partner ecosystems are a company-wide effort, but getting your sales team bought into leveraging your partner ecosystem in each of their deals is of critical importance. These tips will help your sales team create a thriving partner ecosystem based on connectivity, trust, and reciprocity.
A. Effectively Connecting Teams
- Share information in advance.
Partners need context if they’re going to help you build relationships with company influencers. It helps to share the context of the company you want to connect with so that partners are crystal clear about what you’re seeking. Some details you can ask for here include:
- Relevant news
- Compelling events
- Upcoming events
- Key contacts within that company who have already been contacted
The details you ask for here really depend on the company influencer you want to connect with, your organization’s goals, and whether you already have a clear understanding of how your company clearly solves the prospect’s needs.
[Want email templates that can help your team better navigate partner relationships?
Download all email templates and agenda tips to help lead you to success with your partner interactions] 👈Link to Gated Asset here.
1. Communicate frequently.
Developing a partner relationship requires more than reaching out once, getting the information you need, and calling it a day. You need to increase the frequency of communication touchpoints with partners, customers, and the internal team. Decide when you’re going to have regular check-ins between your team and partners related to each account.
B. Practicing Reciprocity
2. Share tips and information even when you don’t need anything.
A partnership is a mutually beneficial relationship. It’s based on the principle of reciprocity where you give as much as you receive from your partners. Also, it’s through doing favors for each other that you’ll grow to like each other more. So, you’ll find it much easier to work together and will build a strong long-term partnership.
Collaboration can take on many forms in a partner ecosystem.
But let’s look at collaboration from the perspective of co-selling (i.e. account-based networking). In this context, you should share meaningful notes and context on the account. You should also follow up on your commitments. For instance, if you promised to meet with a partner about the deal cycle, do it.
4. Stay true to your word.
Keep your promises. Write them down or set them as reminders on your phone so that you don’t forget. Make those introductions. Provide the information your partners need about a call or deal cycle.
It may seem obvious and simple, but it’s easy to get caught up in the whirlwind of things you have to do that you forget these basic things. You lose your partner’s trust if you don’t keep your promises. It’ll seem like you’re trying to get more from them than you’re giving to them, which isn’t the case.
5. Create recurring calendar blocks.
Block time in your calendar each week to check in with your partners. This way you’ll make a deliberate effort to follow up, communicate, and develop ongoing relationships.
C. Do’s and Don'ts
- Don’t think your partner ecosystem is a short-term project. It takes time for partnerships to bring in material revenue.
- Do approach a partnership with a mutually beneficial motive, not a transactional, selfish motive. I’ve said this several times because it’s a very important point. Partnerships aren’t only about your needs. The needs of your partners should also be considered.
- Don’t take and ask for more without giving anything in return. Be generous with info without expecting anything in return.
- Do focus more on connectivity—sales networking is what will level you up to become a top seller. Don’t share confidential information.
Next Steps After Your Call With a Partner
- Send a follow-up email thanking them for their time.
- Keep them updated if you hear something relevant to them.
- Schedule a call in three months to reconnect and continue pushing the ball forward from a relationship perspective.
- Send a thank you message when closing the deal and offer to work with them again.
Partnership KPIs for Sales Teams
So, how do you know your partnership program is performing well beyond closing deals? Here are the four KPIs that you should pay attention to.
- Partner-Sourced Revenue: The direct revenue from a deal that can be directly attributed to one or more partners that brought the account into your sales pipeline.
- Partner-Influenced Revenue: Partners who help you make a deal or increase the deal size.
- Number of New Partnerships: The number of new partners you add to your partner ecosystem.
- Number of New Leads Generated: The number of new leads resulting from partnerships.
Sales Team Networks — Key Benefits of Partnered
Partnered is where you can connect your sales team with your partner sales teams to exchange customer introductions. In just a few clicks, you can 100X your sales team's network.
With the best practices for leveraging partnerships and insights learned in this guide, combined with a powerful sales team network like Partnered, you will be on your way to achieving or exceeding your goals with ease.
Our platform will help you:
- Identify which accounts/partners to focus on
- Unlock relationships you didn't know existed
- Proactively identify which contacts to go after
- Get alerts on any relevant partnership updates
- Navigate every deal like a pro
Times to use Partnered:
- Account Planning: when sales reps are putting together their plans of action, partner needs to be part of those plans.
- Prospecting: when sales reps are prospecting, Partnered should be the first place they look to find who to sell to.
- Active Deal Cycles: insulate your deals by using the surround sound and multi-thread tactics outlined above.
- Renewals: make sure you give your renewals the best shot possible by connecting with partners who are also working with the customer.
- Weekly Check-ins: your sales directors should be reviewing the partner ecosystem in every call. If they’re not, they’re missing some of the best paths into their prospects.
Partnerships are a powerful tool for establishing relationships that can mean more profit for you, better service for your prospects, and a better understanding of your customers and prospects for your company.
Want to learn more? Chat with a Partnered professional today to gain further insight on how to best set up and take advantage of your sales team network at your organization so you can create a partner ecosystem that fuels growth. Schedule a free strategy call!