How to Co-sell with Your Ecosystem Partners

A study by IDC estimates that by the year 2023, there will be a $7.1 trillion investment in digital transformation (DX) across the globe. In addition, according to a survey by Accenture, 76% of business leaders agree that current business models will be unrecognizable in the next five years; and ecosystems will be the primary change agent.

To gain a competitive advantage over your competitors, your business needs to be agile to provide the “value-based” complete solutions that customers are looking for today. Business ecosystems have made this agility possible with seamless partner collaborations and connections across industry verticals and technology expertise. In addition, in today’s world of subscription pricing, partnerships in your ecosystem need to be fully aligned to help you ensure that customers are engaged throughout their customer lifecycle and increase the chances of renewals and retention.

A few years ago, organizations used to focus on growth through direct sales and marketing. Today businesses are meeting these needs and expanding their growth by teaming up with their ecosystem partners, co-innovating to bring solutions to market faster, and co-selling collaboratively to accelerate deal closing and increase win rates. In fact, innovative companies are partnering with several co-sell partners to offer a satisfying whole lifecycle experience to their customers. With the rapidly changing partner landscape, adapting to evolving customer needs is crucial to building your revenue. Co-selling with partners by focusing on delivering the best customer experience can help you win in the market and achieve outsized returns.

In the Technology Industry, co-selling relationships are commonplace today between complementary partners assembling an overall customer solution that could include hardware partners, software partners, systems integrators, hyperscalers, managed services providers, cloud solution providers, technology partners, and others. Read More: Partner Co-Selling: Gain the Edge with Modern Ecosystems.

Recommended Watch: WorkSpan’s Co-founder and CEO Mayank Bawa speaks about Ecosystem Business Management and the New Era of Partner Co-Selling.

Co-selling is entirely different from reselling. In traditional reselling models, partners resell your company’s offerings. Thus, you have minimal or no participation in the sales cycle that your reseller partner leads. However, in a co-selling model, each partner has its own set of solutions or services to sell to the customer that comes together as a whole solution for joint customers. Therefore, active collaboration and an aligned sales process are required between the ecosystem partners’ sales teams in a co-sell motion.

Fig 1: Difference between Reselling and Co-selling – In a resell model, partners resell your company’s offerings, while in a co-sell model, each partner has its own set of solutions or services to sell to a shared set of customers.

As you set on a journey of co-selling with your ecosystem partners, it’s crucial to start by understanding the “what” and “how” behind the process. In this section, we take you through the collaborative actions needed to create an end-to-end strategy for co-selling with your partners and succeed together.

Partner co-selling is a massive opportunity as companies co-selling with ecosystem partners are estimated to be generating over $300 billion in revenue. Using co-sell to grow your business and foster long-term relationships through partner-aligned goals has never been more critical. Co-selling can roughly be broken into three major processes:

Figure 2: Types of Co-Selling Activities – Co-selling can roughly be broken into three major processes: Co-Sell Joint Account Plans Management, Co-Sell Marketing and Leads Management, and Co-Sell Referrals and Opportunity Management.

Co-selling with partners is not as straightforward as traditional reselling models, where a partner simply sells your solution. When partners are co-selling together, a partner’s contribution level can vary from one deal to another.

For example, on one deal, a partner could be the source of the deal, bring the right resources to the table to build confidence with the buying team, have significant executive relationships to help influence a buying decision, and be a substantial part of the overall solution that you both will deliver to that customer. In this situation, you’ll want to recognize the considerable contribution that your partner has brought to your ability to close that revenue.

But in another deal (even with the same partner), you may have already known about the deal; your sales team has been working the deal, that partner may not have a significant contribution to the overall solution and has not been intimately involved in closing the deal. However, at a critical moment, they may have given the customer an endorsement of your capabilities or helped validate your ability to deliver on the customer’s requirements. This also is considered a “co-selling” activity but is not as valuable as the example above. Again, you’ll want to recognize and credit that partner with the appropriate level of contribution they made to bring in that revenue.

Before you jump into partner co-selling, it’s critical to think through which partners you want to work with and how you want to go to market together. Some key factors to consider include:

Once you are clear on these factors, you’re ready to start focusing on a set of partners to build your broader go-to-market with the right highly competitive solutions with the right reach, influence, innovations, and capabilities to be unstoppable in your market!

Now that you’ve identified the target customers & partners for co-selling, you are all set to drive your partnerships. There are three significant steps involved in co-sell processes – Joint Account Plans Management, Marketing and Leads Management, and Co-Sell Referrals and Opportunity Management. We’ll take you through each one-by-one.

In Joint Accounts Plan Management, you and your partner organization’s partner managers work together to map accounts that they will jointly prospect to develop co-sell opportunities. These opportunities become referrals on either side to jointly co-sell. We discuss the steps involved in this process below:

If you are structuring a plan to work on co-marketing plans with your ecosystem partners and manage the leads involved, here are the significant steps involved:

In this final step of the co-sell process, each stage has a set of tasks that need to be performed by your team or by your co-sell partners. We explain each of these to you one by one:

1. Identify Opportunities
2. Accept Referrals
3. Engage with Referrals
4. Close Deal (Partial Deal Win/Loss)
5. Close Deal (Complete Win/Loss)
6. Collect Incentives
7. Discuss Discontinued Referrals

Fig 3: 7-Step Process to Drive Co-sell Partnerships: Execution of co-sell partnerships is a seven-step process starting with identifying opportunities, accepting referrals, engaging with referrals, closing the deal (partially and wholly), collecting incentives to finally discussing the disposition of discontinued referrals.

This phase is the right time to get clarity on these crucial factors with your ecosystem partners:

To understand this step, you first need to understand what a referral is. A referral is an opportunity in one company that is being tagged for co-sell with a partner company. A referral is more valuable than a lead as it is an opportunity that is qualified and developed by the source partner.

In this step, you take the referrals identified in the previous step and run them through a marketing and channel sales qualification step. Your partner is expected to do the same.

This stage comes when one of the partners has registered a win, but the other partner has not – either because the deal is not yet closed for them or because they lost the deal.

This is a stage that’s unique to co-selling. In reselling relationships, your reseller partners are selling your product. You both win, and your partner takes a cut of the revenue. But in co-selling, you are each selling your product or service combined into an overall solution. Each partner that’s co-selling together can either win or lose. For example, the customer may choose your software but decide they want to implement it independently, reduce the scope of the services, or award the services to a different partner.

After the sales team has closed a deal, inform both partner teams, sales teams, sales management & your management. Remember that collecting the right incentives increases profitability for your company. This requires multiple interactions with co-sell partners. So, do not move opportunities to this stage until all work is completed.

Your partner or your company may be offering incentives over and beyond deal commissions and rebates. These could be reimbursement of POCs and trial costs, consumption incentives, and more. For smooth channel management, ensure that these incentives are applied. In addition, watch out for activity questions or proof of performance questions that may be asked in claim review.

Suggested Video: Watch Bronwyn Hastings (SVP of Worldwide Channel Sales and Ecosystem at Citrix) and Amit Sinha (President and CCO at WorkSpan) talk about Stimulating Growth Through a Highly Agile Partner Ecosystem Model.

Once all partnering post-pipeline work has been completed, move the opportunity to the “done” stage. As you work with your partners, there will be leads and opportunities that you decide to no longer work with your partners, or they choose to no longer work with you. Your channel sales team may continue to work on these opportunities alone or with another partner. Mark these leads and opportunities as discontinued in your working environment, but still record them to track your contributions and work. Read More: How to Drive More Revenue with Your Ecosystem Partners

Fig 4: Co-Sell Referrals and Opportunity Management: This business process comprises six key steps between you and your partners.

To maximize your co-sell revenue and scale up your partner activities, you must ensure active partner collaboration – only possible with modern partner ecosystem technology. Partnering has changed dramatically from reselling to co-selling, and the time is now that the technology reflects and supports the new market requirements.

As Jay McBain, Principal Analyst at Forrester, said in a recent blog, “ecosystems don’t run on spreadsheets!” To scale a co-selling business, an ecosystem platform is required. Trying to run a business on spreadsheets is not scalable, data is always incorrect and out of date, reporting is manual and prone to error. Finally, it’s time-consuming with unsustainable operational costs.

Fig 6: Disadvantages of Managing Co-Sell Processes Manually – The manual management of co-sell partnerships is chaotic, expensive, time-consuming, and has lower revenue potential.

Conventional partner portals or PRM (partner relationship management) tools can’t handle the new co-sell motions, and your company is missing out on all the opportunities and potential revenue created by active partner co-sell collaboration and co-solutioning. PRM or partner portals don’t support co-sell opportunities with your partners. To learn more about why PRM platforms don’t support co-selling, here’s a blog for you: Why Your PRM or Partner Portal Won’t Cut It.

Fig 7: CRM and PRM Platforms Don’t Support Co-Sell Motions – Conventional tools like CRM and PRM were not architectured to manage the unique requirements of modern co-sell motions.