Last Updated on January 9, 2023
As the global economy faces challenges and uncertainty, companies are looking for ways to weather the storm and come out on top. One proven effective strategy during an economic downturn is building and leveraging a robust partner ecosystem. Partner ecosystems, also known as partner networks or ecosystems, comprise companies that work together to offer complementary products, services, or technologies to a shared customer base. By building and maintaining strong relationships with these partners, companies can access new markets, technologies and expertise and ultimately drive growth and resilience in times of economic difficulty. In this blog, we’ll explore the benefits of partner ecosystems and how companies can effectively build and manage them to thrive during an economic downturn or recession.
Chief Analyst, Canalys
Below, we’ll explore tactical ways to keep revenue growing during recessions with a strong partner ecosystem.
- Lower your customer acquisition costs
- Gain market share in new industries or geographies
- Increase reach into new clients/ buying centers
- Obtain net new customers from partner referrals
- Build credibility and legitimacy working with successful partners
- Focus on your core business when partners drive lower priority business areas
- Share development costs to reduce expenses
- Explore co-branding opportunities
- Explore opportunities for M&A or strategic investments
Let Partners Help You Lower Your Customer Acquisition Costs
With customer acquisition costs going through the roof, companies don’t want to spend their limited budget on leads that may not even have a high chance of converting, let alone a high lifetime value. Collaborating with and executing co-marketing activities with partners can ensure you’re generating high quality leads at minimal cost to you. And when you align sales teams with your partners to co-sell, you’re leveraging both company’s influence in accounts, improving win rates, and landing larger deals. Partner ecosystems that use co-sell management platforms to orchestrate their execution have seen as much as 20% revenue growth rates with no increase in sales resources.
Cross Promote with Partners
This is the simplest, easiest recommendation on the list – it’s always a great time to cross-promote your partners’ work. When the right pair partners together, it can enhance both partners’ brands. Try co-hosting a webinar with your partners and watch the leads come in!
Explore Co-Branding Opportunities
Co-branding during a recession can be a powerful way for partners to explore new opportunities, reach new customers, and increase brand awareness. It’s important to carefully consider the benefits and potential risks of co-branding and to develop a clear strategy to ensure success. The simplest initiative could be creating a co-branded website or landing page to showcase your partnership and promote your products or services. When targeting common customers, it is important to have early lock-in and close collaboration with partners to ensure you are able to convey the joint value to prospects. Leveraging specialized tools that allow early visibility to such joint opportunities can increase your win rate by up to 25%.
Keep Driving Innovation with Partners
Organizations should develop ecosystem-related innovation processes that use techniques like incubators to nurture and launch promising co-innovation products. Choosing partners that increase the perceived value of your product is the right approach since value, quality and durability tend to be critical attributes customers seek out during hard times. Our customers have demonstrated 6X faster time to market using WorkSpan to bring co-innovation solutions to market.
Put Your IP to Work for You and Your Partners
Many companies own intellectual property (IP) that deliver no direct financial benefit because they have not been monetized. Tapping into your existing IP – and opening it up to innovation from partners – can lead to highly valuable solutions and new potential revenue streams.
Share Development Costs to Reduce Expenses
Bringing internal ideas and projects out to your partner network has the practical benefit of shifting costs outside the organization. More importantly, opening projects to partners stimulate participation by the much more expansive community and potentially accelerates progress that advances the overall market.
Let Partners Develop Your Non-Strategic Initiatives
Challenging economic periods call for focused execution and eliminating distractions or projects not generating a significant return to the business. However, killing innovation projects that haven’t yet proven their potential – or that lie outside the core business – makes it easy to refocus but decreases the company’s long-term growth prospects. A better strategy is to offload certain projects to eligible partners.
Offer Joint Discounts to Customers with Partners
Strong partnerships open opportunities to offer strategic discounts to customers during tough economic times. These discounts can be monetary (on monthly recurring fees/ payments), soft payment terms (delayed payment timelines for customers), or can take shape as a discount on complementary joint solutions. When used correctly, these discounts offer benefits to customers and also help them reduce expenses on solutions when their resources are limited.
Leverage Partners for Getting Access to Credit
It’s a good idea to do some pre-work on getting financing before you even need it. Companies can appraise assets that might be used as collateral, discuss trade credit options with their vendors, improve their business’ credit rating, or renegotiate extended payment terms on existing loans. Some partnerships will have opportunities to secure low- or interest-free loans or capital from private equity firms and/or multinationals with solid balance sheets. In exchange, those organizations might get additional interest in the venture, preferred returns, or increased control.
Explore Opportunities for M&A or Strategic Investments
During a recession, partners may want to consider exploring opportunities for mergers and acquisitions (M&A) or strategic investments. These types of transactions can provide access to new markets and customers, help diversify product or service offerings, realize cost savings, increase bargaining power, and access new talent and expertise. While M&A or strategic investments can be a way for partners to achieve growth during a recession, it’s important to carefully consider the potential benefits and risks of these transactions and to develop a clear strategy to ensure success.
To exercise these options, companies need to have an on-going active and quality engagement with partners. With reduced team sizes, achieving these objectives will also require a considerable amount of standardization and automation of processes. Leveraging ecosystem management platforms can help cut down manual tasks by as much as 90%, opening up valuable time spent by your teams to focus on quality engagement with clients. Investing in solutions that help manage partner ecosystems offers great advantages in leveraging the above listed steps to counter the effects of the recession.
WorkSpan is the only Ecosystem Business Management platform that allows partners to manage the complete flywheel by developing and refining offerings for the future, co-marketing with partners to identify and create markets, by co-selling with partners to generate revenue and by co-investing with partners to augment sales.
Request a demo today to learn how leading partner ecosystems like SAP, Microsoft, Google, Cisco, ActionIQ, VMWare, and others are leveraging WorkSpan to drive co-sell revenue.
To learn more about WorkSpan, visit www.workspan.com.