#Partnerships can do much more than just generate new leads.They can effectively 🎯 halve your cost of go-to-market (GTM).
Curious how? Let's delve in.
A study by Deloitte revealed that leading Enterprise SaaS companies attribute 2X+ more of their sales to partner-sourced leads vs their less successful counterparts.
This has a significant downstream effect, driving their GTM costs down by 2X and reflecting in 3X growth.
What's the secret? These leaders are transforming their operating models and redefining partner relationships. They are embedding their digital presence across the entire buyer journey - from initial exploration to ongoing relationship expansion.
💡 But how exactly can partnerships drive down GTM costs so significantly?
✔️ To begin with, partnerships can amplify your win rate
For instance, HubSpot recently found that partner leads are 26-50% more likely to close than average. (see slides)
Sellers on Amazon Web Services (AWS) marketplace, in another research, close 27% more deals vs in other sales channels.
✔️ In addition, partners can boost retention significantly
Atlassian users with at least one integration experience 50% less churn.
Working with service partners or marketplaces reduce churn significantly too.
📊 Now, using these two variables, let’s paint a picture with two hypothetical scaleups.
Both companies are with a $5m ARR aiming for $9M in ARR next year.
To hit the target, both need to close $4M in new and upsell bookings.
Company A, perhaps savvy with partnerships, has a 30% win rate and 92% retention.
Company B? Not so much - with a 15% win rate and 75% retention.
💰 Given the different win rates:
Company A needs to create $13M in pipeline
Company B has to work twice as hard to create a pipeline worth $27M.
Now, looking at churn, the companies also face vastly different challenges:
Company A only needs to close extra $400K in new sales to offset churn, whereas
Company B has to scramble for extra $1.3M in new sales - 3X more!
When we take into account both the win rate and churn, the difference is staggering.
To reach their $9M ARR targets:
✔️ Company A needs a $15M pipeline [(4m +0.4m)/0.3] {new revenue + churn/win rate}
❌ Company B must generate an overwhelming $35M pipeline – that's 📍 2.5X more. [(4m +1.3m)/0.15 ]
This is how improvements in Win Rate and Retention can halve your cost of go-to-market (GTM). How are you leveraging your partners?