The economy is soft, budgets are tight, and convincing your CEO to invest in partnerships is difficult. For partnerships, today looks a lot like two years ago.
In 2020, we were all dealing with the new normal and the business setbacks from COVID. Some companies were doing exceptionally, and some were failing miserably. Those reading this know the feeling. Let’s look back at 2020 and let the data speak for itself.
In 2020, companies with high-performing ecosystems experienced higher average growth and net profit margins than those without the channel's power.
Additionally, companies with high-performing ecosystems drove an average of 1.5 times the cost reduction and generated 2.1 times the incremental revenue growth compared to low-performing ecosystems.
Remarkable, isn’t it?
Some thought it was a terrible time to invest in partnerships. Now we know better. It's Q4 2022, and the market is down again; what will you do?
It’s time to get partnerships right. Let’s learn the why and how of partnerships.
Three reasons partner programs are needed in a down economy
1. Partner deals have a higher win rate.
There’s conflicting data out there on this, but all the surveys seem to come back with something like a 40-50% increase in win rate for deals with partners involved.
How many other tactics in your toolkit can move win rates like that? Partners aren’t a fun little side project. When done right, partners are an integral part of every step in the buyer journey. Sales teams that coordinate with partner managers and partners reap the rewards.
2. Partnership ecosystems are less immune to loss.
Partnerships are like a living ecosystem that is resilient against loss. When one part of the system stops producing, there are other parts to pick up the slack. By embedding your product into the partnership ecosystem, your offering finds its way to customers through various partner channels.
For example, one study found that businesses that leveraged at least one ecosystem gained an average of 13.7% of their total annual revenues from the ecosystem. This drove a 12.9% cost reduction and generated 13.3% in incremental earnings.
3. Partner deals have the potential to be larger.
I’m going to sound like a broken record, but deals involving one or more partner often lead to bigger deals. Again, customers who already trust a partner are further along in the journey and tend to be ready for bigger steps.
Whether integrations with tech partners or packaging your product with a service agency for implementation and maintenance, when you reach customers together, you drive higher ROI for every deal.
I know what you’re thinking.
Ok, cool. Got it.
Partnerships are awesome. They have great ROI.
But that assumes scale and effectiveness. How do you get to that point without tons of up-front investment? Maybe the time to build a great partner program that keeps on giving was before the recession. Isn’t it too late now?
Purse strings are tight. Partnerships take time to get large and mature enough to drive these results. Can we afford it?
I think you can grow and sustain your partner program without spending two years only planting seeds. You can make your partner program, and by extension your business, more resilient now, without breaking the bank.
Three ways to cost-effectively future-proof your partner program
1. Don’t grow headcount; get smarter
A lever lets you lift more weight with the same amount of effort. Automation works the same way.
If you want to grow during a recession, you’ve got to leverage automation to manage more partners - and more diverse partners - for less. Fortunately, the partner-tech market is growing fast, and there are excellent ways to up your ops game without growing headcount.
You can use technology to improve the partner experience and deliver efficiencies. Everything from partner onboarding and training, partner lead management, deal registration, and performance analytics can benefit.
2. Don’t cut out the long-tail
The first instinct in tight times is to go all-in on the 80/20 rule and shift all your focus to just your top handful of partners. While there is some necessity to do this with individual manhours, don’t make the mistake of neglecting your long tail of smaller partners until they atrophy.
The best companies are those who can harness the power of the long-tail. You don’t know which of those currently small partners will become your best partners in the future. Nurture and love them all, because when the economy gets even tougher you will want those relationships to bear fruit.
But again, you’ve got to do it efficiently and leverage tools tailored for the job of engaging your entire ecosystem in a sustainable way.
3. Get personalized (but at scale)
Partners are people too! To win, you need them to feel more excited about working with you. To do this, you need to make them feel special. You need to show you care.
If your partner program feels like a cut-rate bare-minimum experience, begging them for leads and offering only stale one-pagers from sketchy portals, you’re gonna struggle. You’ll be the first vendor they ignore.
Remember, your partners face the same economy. They’re making tough decisions too. They need to see immediate value from working with you. That starts with building trust and showing them they are more than a number in your program.
It’s only counterintuitive at first
It might sound a little crazy to focus on building a world-class partner program at scale in the midst of a recession. But the reality is, it’s crazy not to.
The companies who survive and win the future won’t do it through ever bigger armies of direct sales teams or ever larger ad spends. They’ll do it through an ecosystem of influencers, integrations, agencies, and other partners that love their product.
You don’t have to break the bank, you just have to do it right. Partner ops may be the lowest-hanging fruit available right now. The way that CRMs changed the game for direct sales at scale, PRMs, and other tools are changing the game for partnering at scale.
Leveling up your game with duct-tape solutions can seem scary, but it more than pays for itself. In our global survey, Impartner customers saw a 32% increase in channel revenue and a 29% decrease in administrative costs.
It is time to do better with less.
That means relying more on your partner ecosystem, and less on internal resources.