Maximizing Your Co-Sell Potential: The Importance of Standard Ecosystem Metrics
In the current economy, revenue forecasts are sluggish, win rates are falling to no decisions, and deal cycle times are getting elongated with additional approvals. Revenue leaders need a new growth engine, a helping hand.
Suggested read: How Partner Ecosystems Can Help You Navigate Tough Economic Times
Co-sell with your top ecosystem partners, especially hyperscalers, GSI, ISVs, and MSPs, has emerged as a MUST HAVE revenue growth initiative for 2023, as it provides more opportunities into the pipeline, improves win rates, increases deal-size and increases deal velocity as partners combine their influence to win at a lower cost/effort.
In last week’s blog we explored how co-sell ecosystem automation will drive Ecosystem Led Growth. However, while co-selling is gaining in popularity, many organizations are struggling to effectively measure it, to review and iterate on it for success.
In this blog post, we will break down ecosystem growth into contributing factors and arrive at the MUFASA Metrics for Ecosystem Led Growth (borrowing Marketo’s term for important metrics in Marketing Automation).
Why Metrics are Essential to Ecosystem Led Growth
Without proper measurement, you may be left in the dark, unsure of whether your efforts are achieving the desired results.
Metrics allow you to identify trends, patterns, and areas for improvement in ecosystem performance and processes, leading to enhanced automation opportunities. In fact, data analysis is an essential part of business process improvement, as you can’t improve what you don’t measure at an operational level - An area which Chief Revenue Officers are most concerned with.
For instance, in the B2B SaaS industry, Marketing Automation tools often use metrics such as MQLs to refine their strategies. By analyzing the volume of MQLs, the leads that were accepted or rejected, and the total win rate, the marketing team can make changes to their approach, such as adjusting how they qualify leads, to improve results.
Therefore, co-sell programs should also be tracking relevant metrics to ensure ecosystem automation effectiveness. Despite the obvious benefits, many co-sell programs still fail to do so.
Which Co-Sell Metrics to Track for Ecosystem Led Growth (ELG)
To truly understand the effectiveness of co-sell automation to ecosystem led growth, it's essential to track relevant metrics and how it contributes to Revenue Growth.
I will focus on the top 5 Co-Sell Metrics every partner ecosystem leader must measure to harness Ecosystem-led Growth.
#1 Ecosystem Sourced Revenue (ESR)
Ecosystem Sourced Revenue refers to the dollar value of referral opportunities that are won together with your co-sell partnerships. This is a co-sell output metric that ultimately drives Ecosystem Led Growth. It is an important metric to track because it provides insight into the effectiveness of your co-sell program in closing new business opportunities.
By growing ecosystem sourced opportunities, you can identify the partners that are generating the most referral opportunities and focus on building stronger relationships with them.
Furthermore, tracking ecosystem sourced opportunities enables you to identify any gaps in your co-sell program and take steps to address them.
For instance, if you notice that there are certain areas or industries where your co-sell program is not generating enough leads or opportunities, you can work with your partners to develop targeted campaigns to address those gaps.
#2 Ecosystem Sourced Pipeline (ESP)
Knowing the number of closed won opportunities is not enough to evaluate the effectiveness of your co-sell program. It's equally important to track Ecosystem Sourced Pipeline and the impact of co-sell in growing the number of opportunities in the pipeline.
Pipeline is a critical metric that allows you to forecast the revenue generated from your program.
By tracking the overall # and dollar value of pipeline generated by your co-sell partners, you can better predict your quarterly revenue and set an appropriate budget for your program.
Furthermore, pipeline tracking enables you to identify any potential bottlenecks in the sales process and take proactive steps to address them. For instance, if you notice a drop in the pipeline generated by a particular partner, it could indicate that they are experiencing challenges in qualifying leads or closing deals. This insight enables you to work with your partner to overcome these challenges and improve the effectiveness of your co-sell program.
#3 Co-Sell Win Rate
There is no point in having a massive pipeline if deals don't close. Co-sell win rate is typically higher as each partner brings its influence with multiple decision makers in B2B purchasing process, utilizes a relevant and better together story and the joint solution itself lowers customer risk cost, and the need for faster innovation.
Co-sell win rate is the percentage of deals that are won out of the total number of co-sell pursuits, especially in comparison to traditional win rates.
Tracking this metric can also unearth some interesting data points that can be used to optimize how you sell with certain partners.
For example, if you notice that the Co-Sell win rate with a particular partner is lower than average, it could indicate the need for a better joint solution, sharper “better together story” and better enablement of mutual sales teams. This would be an opportunity for your partner managers to work closely with the partner to improve this metric.
#4 Co-Sell Deal Size
Although you care about net revenue for your partner program, it is also worth getting more granular and looking at their overall size. When you and your partner sell a product as a Joint Solution, it results in larger deal sizes. For example, every cloud provider marketplace sale drives co-sell deal sizes up as it includes both ISV license and cloud consumption from Cloud Providers.
Understanding the average deal size, in addition to flagging any aberrations, will help you identify trends and patterns in the types of deals that are being closed by your co-selling partners.
This data can be really helpful, for instance, if you notice that a particular partner is consistently closing larger deals than others, you can explore why this is happening (for example #1 solution in this space is with you and your partner together) and try to replicate the same success with other partners in additional verticals or regions.
Similarly, if you notice that larger deals are common for a particular vertical or geography, you may want to double down on the partners that operate in these areas and commit additional marketing efforts to drive more of these larger deals.
#5 Co-sell Deal Cycle Time
The final metric that is important to track for your co-sell program is how long it takes to close deals.
It is an essential metric to track because it provides insight into the efficiency of your co-sell program, how quickly co-sell opportunities are accepted (or declined), and how efficiently your sales teams bring partner value into the deal to sell higher, bigger, and quicker.
Shorter cycle times typically indicate that your co-sell program is well accepted by sales teams, there is account coverage from partners (“No Naked Deals without Ecosystem Influence”) and deals are closing quickly.
On the other hand, longer cycle times may indicate that your program needs improvement, and there may be issues with ecosystem opportunity qualification, sales enablement, or ecosystem-friendly culture in GTM teams.
Tracking this figure again will give you key indicators that your partner managers can use to support your partners more closely in certain areas.
Current issues with tracking co-sell metrics
With the tracking of key metrics a standard business practice, why do co-sell programs not prioritize the collection of this data?
The main reason is the lack of ecosystem automation, a standard co-sell process, shared data, and the ability to measure metrics for each partner.
There are many issues with collecting co-sell data including:
Lack of Shared Systems
Collecting and consolidating data from various partners in a co-selling program can be a significant challenge. Often, data is siloed within each partner's CRM or sales tools, and it can be challenging to bring all the data together to get a complete view of the co-selling program's performance. It's essential to have bi-directional CRM connectivity that each partner in the ecosystem should own and manage. Data privacy concerns should be addressed with appropriate tools that provide each partner to control what they share and keep private.
Lack of Partner Attribution
Another major challenge with tracking co-selling metrics is limited visibility into the customer journey. When multiple partners are involved in the sales cycle, it can be challenging to determine the specific impact of each partner on the customer's decision to purchase.
This can make it difficult to assign credit for a sale or to identify areas for improvement in the co-selling program. Quantifying partner impact by assigning percentages to each partner based on influence (e.g. sourced by partner, the role the partner played in bringing new buying center) is essential to not over-count the ecosystem sourced revenue and lose credibility with sales.
Lack of Co-Sell Workflow
To track co-selling metrics effectively, organizations need to have a cross-company workflow to identify, accept, engage, and win co-sell deals with each partner managing business actions required at their end of the workflow. The lack of such a workflow makes it challenging to collect, consolidate, and analyze data from various partners.
One Co-Sell App to Track it All
Fortunately, there exists a solution designed to efficiently track these essential metrics for you.
WorkSpan is a purpose-built ecosystem business management solution that addresses the many challenges of tracking co-selling metrics we discussed earlier.
(Read more: Ecosystem Business Management Best Practices)
WorkSpan provides a centralized solution for partners to share data, making it easy to capture and consolidate information from various partners.
With WorkSpan, partners can seamlessly integrate their CRM or sales tools, eliminating the need for time-consuming manual data entry and reducing the risk of data errors.
With the WorkSpan Co-Sell App partners can get full visibility into the customer journey enabling partners to share data on deal progress, and revenue.
As mentioned above, net revenue is not the only metric to track, and with WorkSpan you can easily see the true health of your co-sell program.
WorkSpan to the rescue.
Benefits you can expect from tracking co-sell metrics
By tracking co-sell metrics, organizations can expect a multitude of benefits.
First and foremost, tracking these metrics provides a comprehensive view of the effectiveness of your co-sell program.
It allows you to identify gaps in your program and make necessary improvements to optimize results.
Furthermore, tracking metrics such as ecosystem-sourced opportunities and ecosystem deal size allows organizations to focus on building stronger relationships with partners that are generating the most leads and revenue.
It also acts as a way for partner managers to assign their time effectively.
Instead of being spread thin, and trying to allocate equal time to all their partners, they can use key metrics to decide on the highest potential co-sell partners and double down.
Finally, tracking pipeline enables organizations to forecast revenue and set appropriate budgets and resources for their co-sell program.
This not only comes in handy for whoever owns the co-sell program, but also from an org-wide perspective as now you can accurately forecast co-sell revenue and enter it into your overall company forecast, which will make your finance team happy.
“WorkSpan is making it easier and faster for us to improve the trackability of multi-partner motions across all the four capabilities [business process, data, access control, and intelligence.]” - Akbar Hasan, Senior Director, Co-Sell Acceleration Group, Cisco
In conclusion, co-selling can be a powerful strategy for businesses to maximize their potential, but measuring the right metrics is essential to ensure success.
Tracking metrics such as ecosystem-sourced opportunities, ecosystem pipeline, ecosystem win rate, ecosystem deal size, and ecosystem deal cycle can provide valuable insights into the effectiveness of your co-sell program.
However, tracking these metrics can be challenging, which is why WorkSpan offers a purpose-built co-sell platform to address these challenges.
WorkSpan provides a centralized platform for partners to share data, allowing for better visibility into the customer journey and accurate tracking of co-selling metrics.
By using a platform like WorkSpan, businesses can overcome the challenges of tracking co-selling metrics and ensure the success of their co-selling programs.
To see how WorkSpan can help you book a demo.