As 50% of SaaS have 💊 changed their Go-To-Market recently, leading companies use partnerships to improve sales efficiency while boosting growth. Let's explore how partner-led strategies can expand businesses at a lower cost, increase deal sizes, and lower churn.
"Sales closure cycle has been a problem; however, we have focused on maintaining a low CAC by implementing strategic product partnerships, increasing product associations by building end-to-end customer-centric solutions." - CXO, Leading CRM company - more below.
🎯 Half of B2B SaaS changed their GTM strategy, focusing more on customer retention over acquisition and experimenting with new pricing strategies such as upselling and add-ons.
1 in 3 SaaS companies say that efficiency is their top priority for bolstering growth in 2023. This includes cutting costs, improving churn/retention, and reducing cash burn/low customer acquisition cost. By contrast, only 1 in 4 leaders are focusing on customers, and 1 in 5 on product.
📈 Long-term success in SaaS is a combination of top-line growth and operational efficiency.
The spend/revenue ratio on the graph above by ICONIQ Capital shows that businesses need to push this ratio to 1 and below to scale.
One of the efficient ways to achieve this is through partnerships, as Jay McBain, Chief Analyst in Canalys, emphasized in our recent episode:
"It's never been a technology company in history that's reached the highest level without partnerships. The early days of IBM, SAP, Oracle, the newer days of Salesforce, HubSpot, Workday, ServiceNow, Marketo, NetSuite. Every single successful company, which has hit 10s or 100s of billions of dollars in valuation, has done it with partnerships. Every company CEO knows this - it's not a question of if; it's a question of when."
How are companies doing this today? Here's what consulting firms advise their clients:
🍀 Accenture: ecosystem-led expansion is among four keys to unlock profitable growth.
Accenture recently named four priority areas that all B2B SaaS companies, regardless of their stage of maturity, can prioritize to approach the market landscape differently:
"Strategies for profitable growth should incorporate product-led & ecosystem-led expansion; exploration of new channels & markets; improved customer net retention & expansion."
💰 Deloitte: SaaS companies use partners to help with low-margin services and to develop highly profitable industry-specific solutions.
"In addition to building a network of Professional Services partners to supply low-margin implementation capacity, we see [SaaS] companies embracing partners to develop industry-specific solutions that are valued at a premium by customers, thus increasing the overall marketing and sales capabilities for product license growth in addition to services."
🙌 EY: 2x more capital-efficient Indian B2B SaaS prioritize partner-led expansion.
EY discovered that in Indian B2B SaaS companies, 60% of CXOs report product innovation, pricing changes, and partner-led expansion as their top strategic priorities. These companies are 2x more capital efficient compared to global firms.
"Trailblazers adopt product innovation strategies to win niche market opportunities and drive capital-efficient growth. Dashers invest in sales leadership and build partner-led expansion strategies to scale enterprise accounts and optimize their sales and marketing operations."
"Sales closure cycle has been a problem; however, we have focused on maintaining a low CAC by implementing strategic product partnerships, increasing product associations by building end-to-end customer-centric solutions." - CXO, Leading CRM company.
⚡️ Insight Partners VC sees companies boost efficiency with partnerships.
79% of their surveyed portfolio companies planned on developing a partnership program. One use case they observe is leveraging partners for customer implementation at the stage when “Are we hitting that point where it's becoming a challenge or causing friction in our growth motion and leveraging partners can really help unstick some of that?”
Refer to the graph above on the share of customer implementations in Insight Partners portfolio already managed by external partners.
This is just the beginning of the trend - TBC.