27 - Partner-Led Growth Report: Results + Key Takeaways - Kelly Sarabyn, HubSpot, and Asher Matthew, Partnership Leaders

This production is brought to you by Magentrix. Magentrix is a pioneer in platforms for partner ecosystem management and partner relationship management. This is Partner Relationship Management, the ultimate channel sales podcast. Welcome to another episode of the Ultimate Channel Sales Podcast. I'm your host, Paul Bird. In today's episode, we have some familiar faces making a reappearance on the show, Kelly Sarbin and Asher Matthew. A few months ago, Kelly and Asher brought to us the insightful report, The State of Partner Ops and Programs. This time, their efforts continue to shine as they unveil their latest report. This report promises to shed light on the power of partner-led growth strategies, showcasing real-world success stories, and a lot of interesting partnership insights from sales and marketing leaders, and tips to drive business through partnerships. Stay tuned to hear some valuable insights from this dynamic duo. So for those who aren't familiar with our guests, Kelly Sarbin is a platform ecosystem advocate at HubSpot, and Asher Matthew is a co-founder and the CEO of the Partnership Leaders Community. They're both here to talk to us about the key insights from the State of Partner-Led Growth Report. Welcome back, guys. It's great to have you here. Thank you for having us. Super excited to dive into these conversations. Fantastic. So let's start with the basics. Tell us what motivated you guys to put this report together. Whose idea was it, and what did you hope to accomplish with it? I think the origins go back a while, but I remember I was talking to Chris Samilla about it, who is the other co-founder of Partnership Leaders, and really what prompted it is the partnership community. It's a great place to start. It can sometimes be an echo chamber, right? Even though we're such a cross-functional discipline and really need to have the buy-in of other executives, but a lot of the conversations become kind of insular, and people are incredibly bullish on partnerships, which is great, but what we wanted to do is really take a step outside of that conversation and ask marketing and sales leaders who are looking at the big picture. They may often, you know, CROs often run partner teams, but they're also running the sales team, potentially CFOs. And they're really looking at it differently. So, we wanted to do a survey that was drawing out that perspective and trying to understand what their view today is of partnerships instead of just hearing what heads of partnerships think about partnerships. Perfect. Net, net, net, net. This was Kelly's idea, and then she made it our idea. So, how and why did you choose the key players that were involved in putting the report together? So, we reached out to Pavilion, which, you know, Partnership Leaders has a relationship with them. They have 10,000 paid members, essentially, of marketing and sales leaders in the space. That's kind of how they've evolved as a community. So, we knew that they would have access to the type of people that were trying to survey and be able to engage them to get their take. So, that's really why we reached out to Pavilion to partner on this report. And then, of course, for the contributors, we wanted to reach out to people who, again, were providing the outside of partnerships perspective. So, we reached out to CMOs, chief sales officers, CROs, and then we got people from the Boston Consulting Group. We got people from top VCs because investors, obviously, are looking across the market and really seeing the big picture, and we wanted to have that represented as well. Perfect. So, Kelly, maybe you can outline a couple of your favorite standout insights from the report, sort of a high-level overview. Yeah. So, I think what was really interesting was that we had a lot of people who were trying to and this wasn't even our intention, but what happened is the people who took the survey, there was really two distinct buckets. Now, there were more people who took it who just have what I would call pure marketing and sales roles, like they're the VP of marketing, the CMO, the CRO. But there was a subset of people who rightfully consider themselves either marketing or sales leader because, say, you're a VP of channel sales, right? You are very much in partnerships, but you're also a sales leader. Same thing with, say, a VP of partner marketing, right? Yeah. So, you're in the marketing org, you're a VP, but at the same time, you're really focused on partnerships. So, what we did is we segmented out those results afterwards to take a look at those two different groups and see what the differing perception is. And what was really cool to see is that marketing and sales leaders who don't specialize in partnerships were very bullish on partners. I think the way I look at it, we asked, is this channel growing in significance? And a third of them said it was significantly growing. And then the next one was, is this channel growing in significance? And I think the next most common answer was slightly growing. Almost no one said it was staying the same. And when you look at the people who specialize in partnership, they were sort of one degree over. So, it's probably double that thought that it was significantly growing. So, I think that kind of dovetailed with why we did the survey, which is there is somewhat of a perception gap between people who specialize in partnerships and the other executives. And that definitely came across all the answers. I think the other super interesting finding was that other than professional network, and customer referrals, sales and marketing leaders, regardless of whether they specialize or not, thought partners were sort of the best source of impact and influence across the entire deal cycle, right? So, even before you're talking, people thought professional networks, which kind of aligns with the community growth mentality SaaS companies have right now. And then trusted vendors, partners, people they have relationships with, those are the people influencing the sale. So, I think that was a really powerful and interesting point. And I think that was a really powerful and interesting result and something that partner people can kind of lean into. Perfect. How about you, Asher? What do you think? Would you agree or do you have anything else you can add to that? So, I had a couple of different takeaways. One was the conversation around partnership people trying to access budget. So, you remember last time we came on the show and even all through Q4 when planning was taking place, there was big concern in the entire partner community around like, how do we access budget? Why are the leaders not able to get budget and all those things? And so, I think that was a really powerful and interesting point. So, the opening stat of the report is about over 42% of marketing and sales leaders say that they would give between 10% to 25% of their budget to partnerships. So, now that we have that in a report coming from sales and marketing leaders, we at least have an idea of what a North Star for asking for looks like, right? And the next part is, I would say, where we take this data and put it into action is say, well, how do we go now as per that 10% to 25%, but more importantly, what do we do with it, right? That's one big piece. The second big piece was around how little people thought that analysts can affect buying decisions these days, where you still have research reports and you still have all these things out there. But I really thought that the analyst report or the analyst influence would be much, much, much better. And so, those two things were very surprising for me, but definitely the fact that sales and marketing leaders are willing to give 10% to 25% of their budget to partner leaders, I think is a really good benchmark to start the conversation with them. Interesting. So, let's get into some of the survey results. Now, you guys interviewed revenue leaders who were primarily focused on partnerships, as well as revenue leaders that were not focused on partnerships. Were there any commonalities that you noticed between these two groups, the ones that were focused and weren't focused on partnerships? Yeah, I think the results were surprisingly consistent, and really, it was just a slight magnitude difference, right? So, I think if you look at almost all of the answers on the survey, then people who aren't in partnerships are still very bullish on the value. But they might say, for example, one of the questions was, prior to talking to a sales team, so early in the customer journey, what has the biggest impact on the purchase decision? And for sales. For sales leaders in partnerships, it is more likely to be the partners, and then they put in second professional networks. For people outside of it, it's flipped, right? But there's still one and two. And as Asher said, they were asked to compare that to social media, review sites, industry analysts, content and events, blogs, articles, and podcasts. So, they're asked about all the channels that could potentially influence a buyer before they start talking to your company, which, as we know, more and more of the purchase decision has changed. It has gone before sales. Like, sales often only has 5% of the whole purchase decision. And so, I think that was really interesting. I would say the answers were very consistent. It would just be one order of magnitude more that partner people think partnerships are driving the decisions. So, of the revenue leaders that were not focused on partnerships, why do you think their organizations just don't have a partnership mentality or partnership focus? So, I think the. The survey said that they intellectually actually do have a partner focus because they do think it's really often either the most important thing or the second most important thing. Because another example is what referral source is going to be the most likely to bring the most value to your organization. And that would be. We asked about marketing lead, a sales lead, a BDR, a partner lead, a customer lead. And other than customer lead, they agreed that partner lead was the most valuable lead. But why they actually don't execute it? I think is a bigger shift and a bigger part. problem, right? I think it's a lack of knowledge. There's a lot of operational problems that came out in the last survey that we did. But also, you know, I think a lack of education and the sort of transformation of how partnerships have worked the last five or 10 years, there's like a lag. Like, for example, one of the contributors to the report was John Miller, who's the CMO of Demandbase. And Asher asked him, like, what would it take for you to invest more in partnerships? And he essentially said it would have to dominate the narrative in the marketing world in the same way that product-led growth had started to dominate a narrative. So I think part of it is an exercise in storytelling that hasn't been successful yet from partnership people to the conversations that CROs and CMOs are having amongst themselves. So I think there's an awareness. It just hasn't gone to the next level of this is the playbook, right? Because to be a playbook, you have to have that. buy-in and really that part of the conversation, but some way to execute, right? If you don't have the, what Asher calls rigor behind it, then it's not going to work because people are interested. It's the same thing. They're open to giving the budget, right? But if the partnership leader doesn't come with a very coherent, rigorous case as to how they're going to use it and how that's going to drive ROI, then it just remains a thought that they're open to. Now, it also says in the report that marketing and sales leaders believe that partner leads are more valuable than average leads and that partner attached deals are more likely to close and partners have a strong impact before and after a prospect starts speaking to sales. While there is absolutely no doubt that partners can help on the process, I think it would be interesting to know more about the profiles of these companies that express this kind of sentiment. In terms of the survey, like who took the survey? Yeah. The ones that were really focused on believing that the partner leads were more valuable than average. Yeah. We didn't look into like breaking down the answers by technographic. I will say that 67% of the people who responded worked at a SaaS or a tech company. So these answers are more reflective of people in tech than it is, say, in people in the services industry. I think 19% of them came from services. So there's some representation, but I think that this is definitely overall more capturing the SaaS community's perception and tech. And I think that it would be interesting to break out the answers and say, hey, the people that answer to these questions, are they in particular industries, right? Because if you look at different sectors, like cybersecurity is kind of fundamentally based on a certain partner structure from day one. And I think that we might see some nuances there if we pulled out the answers to see who's the most bullish. Are they have a particular job title and are they in a particular industry? It would be interesting to know. Just a quick comment on the previous question around the why, isn't partnerships more readily being accepted, right? So one thing is there are some businesses out there where partnerships just don't have a place, right? We just need to acknowledge that. And actually, based on the tours that we've done, it's absolutely true. Even today, even though all of us think that partnerships can be applied everywhere, while that may be true, but what we found is there's some businesses where the business just needs to go direct. And it's okay to accept that. In the other businesses where the partnerships are not really being accepted, but they're readily being implemented. To Kelly's point, there's an education component, but there's also realization because we can educate the company and the leaders. And then when they go and ask their leaders and the customer says, actually, we'll just prefer to buy direct, right? That's where the disconnect happens, right? So there is the, as new forms of buying emerge, whether it's to marketplaces or it says to like interactive offers or like all the different ways that we all working on innovating our partner programs, right? I think over time, I think this will become very clear that it's very easy to use the partnerships programs versus taking a lot of time to even like get into market. For sure. Absolutely. So there's actually a chart that you have in an area that's covering partner source leads. And I find it really interesting because for the vast majority of sales and marketing leaders, they believe that 25% or less is coming as a partner source lead. So do you have any insight on, is there a difference between the organizations that are completely partner focused? And is this a mix for everyone when it comes into partner source leads? And the other part I would like to know is I'd like to know the company that had a hundred percent of their leads coming from partners. Probably a cybersecurity company for sure. So why do you think there is such a heavy focus on the kind of 25% or less when these leads are so valuable? Yeah. I mean, I do think that part of it ties back to the operational problems that companies just haven't worked out in the lack of the consistent playbook. I think the reseller motion, right, has been going on for decades and, and that's, does have a particular playbook, but I think that the buying journey has changed in the last five to 10 years. And I just think that the operational component around partnerships has not caught up. So to scale it out successfully, especially if you're a company that's more than a couple hundred people, it starts to get infinitely more complex, right? Because you have these large sales teams, these large customer success teams, and then you may have hundreds and then thousands of partners. So the operational component around that is very difficult. And I do think the lack of investment, right? Like a lot of, especially in SaaS, you still have these direct playbooks and that's how companies start out. And then the more you transition over to bringing partnerships in, right, which makes it honestly even more complicated, both from the technology partner side, where if you didn't design your product from day one, keep thinking about interoperability, you're going to hit a lot of technical problems. And you'd see a lot of partnerships, people frustrated because they're being blocked by a lack of interoperability. So they can't even get the partnerships really off the ground, no matter what the go-to-market side is. So I don't know. I think my take is that people recognize the value of the product, but they don't realize the value of the product. But they haven't learned to operationalize it. I don't know. Asher, do you have other thoughts on that? I think the key here is what's the goalpost, right? And in January, February, when I went full-time on PL, I actually went and asked a bunch of CFOs, why don't they recognize more of an impact from partnerships? And it's because I also found a lot 40%, and 50%, and 60%, and like, you know, like there's inspiration, aspiration, ambition, whatever you want to call it, right? The answer that I actually got back was actually much simpler from the CFOs, which said, look, if you are going to just go to 20% and go all the way to 40%, you're going to land somewhere in the middle, right? We actually don't care that you figure out how to do 80% like partner sourced. What we actually care about more is that whatever you say, just do it consistently so we can depend on you. So given this data right now, now I'm going back to even our community members and saying, hey, look, just to 25%, it's great. Because over time, what you'll see is the folks that have built repeatability in their processes and are consistently showing up with 25% are going to be cherished way more than the volatile sales leaders. So one quarter hit 160% and the other quarter hit 20%, right? And so to me, the interpretation of this was actually more around what's the goalpost? Because if most of the people are looking at it from a 25% level, then trying to go ahead 40% and create more friction in the process isn't actually helping anybody. For sure. Now, in addition to the sales side of things, I thought there were some really interesting parts about the partner marketing. There's an area where you cover. Co-marketing specifically saying a significant minority of marketing leaders, however, see co-marketing campaigns as performing the same or worse in those dimensions as other campaigns they run. And then I think the number is 28.1% of respondents say they perform slightly worse and 17.2% of leaders say they perform significantly worse. Let's talk about the reasons behind this. Can you tell us more on why this seems to be the case? Yeah, I thought that was a really interesting finding. And another thing from John Miller's interview that he called out was what he called the planning tax, right? So I do think, and also you'll notice that people asked more broadly, the customer acquisition costs for co-marketing campaigns was flagged as in general being worse. And I think that when you think about customer acquisition costs, you're not just thinking about how engaging this campaign is and how people are responding to it, but also the costs that it took to put it together. So I do think a big part of it is lack of knowledge and expertise in running co-marketing campaigns, but also the ad hoc nature it often runs in organizations, right? And I think these campaigns are, if you want to really work into somebody's marketing calendar, it has to be an ongoing thing or it's going to be costly, right? To like do one-off collaborations with people outside of a few examples, like potentially around live in-person events. It does take a lot of work and a lot of back and forth, right? And you have two different teams trying to collaborate who might have different working styles. They might be in different time zones. So when you take the time to have more strategic relationships around co-marketing so that you have repeatability, and you also put in place processes that you understand, and you're not constantly reinventing the wheel, right? You're not constantly saying, oh, we need to go back to legal and sign more legal agreements. And I think that that is something that makes the outcomes worse and more expensive for organizations. So that's definitely something that I think is playing into it. I think the other thing is a lack of substantive knowledge on what it means to kind of go to market together and how you take two brands and effectively tell a story around a joint value prop. I just, I'm a marketer, and that's just not something that's talked about a lot. You have all these clear disciplines, you have product marketing, you have demand generation, and you have field marketing, like these disciplines that teach marketers how to market. And it's really, rarely talked about across the marketing field. If you join marketing associations, it's just not a big point of conversation or this established playbook. How do you do this really well? How do you identify what makes a good co-marketing partner? Because a lot of times people will just look at a potential partner's reach, right? They'll be like, oh, that's a really well-known brand and they have a huge social media following. So let's team up. But that doesn't really work. That is one thing to consider is what their reach is going to be. But there's other things to consider, like what joint story are you trying to tell? Like, how is it going to make sense to the customer to hear about these two products or this product and this service together? So I think the other thing that we should call out is when companies do decide to do partner marketing, they don't necessarily resource a partner marketer first. They just say who else is already on the team that maybe knows somewhat of it and just go do it, right? But they don't actually do that for a partner manager. Because if they are going to go down the partnership route, they are going to go find either a partner manager or a VP of partnerships, depending on like where they are in their cycle, right? And so I feel like the same thing now actually needs to happen on the partner marketing side because the partner marketers already know how to take care of this planning tax, right? Because they've done it so many times, right? And so that to me is like a big, big, big opportunity in the market for all of us, by the way, to take now, partner marketing seriously, and then try to get it to the same level of partner management rigor, right? Which again, has to get to the same level of rigor as like the sales and marketing process that already exists, right? So it's like, if you can just bring partner marketing and partner success to the same parity, and then move from there, you'll have much better results. Well, there's also a part about coordinating concerns around brand misalignment and saying that's the second biggest rigors in that campaigns never really get off the ground. Do you guys have any thoughts on that? Do you guys have any insight on the specific concerns around brand misalignment and that issue? Yeah, I think marketers are always attuned to how they're coming across to the market because they both know on an unconscious and conscious level, it's going to impact the potential buyer and prospect. And brand misalignment can be a very jarring experience and it can cause a negative impression because presumably if you've done a good job building a brand, that's sort of your personality, right? And that's how prospects and customers think of and see you. And they also like that brand, right? If you're a successful company and have built a successful brand, then they have an affinity for how your brand is today. So if you team up with someone who has a very different brand, it's definitely an alignment issue. It's not judging the other brand and saying the other brand is somehow worse, but something like Red Bull, for example, that's a consumer brand, but it has a very brash, like, let's go hit thrills. That's not going to team up with something like Harry and David, which is, Hey, buy high-end fruits from us. We're very classy. Like that would be, if they tried to team up, it would be now some few times people intentionally do that because they're trying to up their image. Like I know back in the day, American express kind of teamed up. I think it was four square or one of the like more innovative FinTech companies because they wanted to update their brand, right? And it was an intentional, how can we team up with these innovative startups to make ourselves look more cool and hip? We want to move in that direction, but that should be very intentional. And I think that you definitely need a structure for assessing is this co-marketing partner have a brand that is going to cause a jarring sort of impression in the market for people who have an affinity for who I am today. And so it's definitely something that needs to be tackled and can be a problem. And if we start looking at the partner's sales results on page 25 of the report, the report mentions that the majority of sales leaders surveyed who were using partner data reported it was more accurate than third-party data. Can you provide some insight on this on first, what it means to be more accurate? Okay. It might be more accurate. That was actually, yeah. Yeah. Go ahead, Kelly. So I think this was really interesting. The whole second-party data thing was interesting. And just for anyone who's listening, second-party data is when you're sharing accounts directly with your partner. So if you're sharing accounts directly with your partner, you're sharing accounts directly to SaaS companies might team up. And then there's tools called Reveal and Crossbeam that make it kind of secure to share your customer account list with each other. And so we do know that many companies have bad data hygiene, right? So I think it's another interesting point where you have to do some due diligence, right? You can't just assume because it's a partner that they have good data in their CRM. Now, if you do do that due diligence, then one would expect it to be more accurate than third-party data because third-party data, often transfers through many hands. There's a lot of uncertainty. It's very difficult to stay on top of it. Often they're scraping websites, which can have like legacy information. But the survey definitely said that a lot of organizations just aren't seeing much results from second-party data at this point. And it partly it's an accuracy issue. Partly it might be they don't know how to deploy it. But this was a surprising finding to me that it still seems early days in the use of second-party data and that it just hasn't really. had that much of an impact for most organizations. And in some, they've seen worse results with it. So super fascinating. I think it might be reflective. I will say like Reveal and CrossFeed are both new tools, very new to the market. Not a ton of businesses are using those even in a paid capacity, right? And if you're serious, if you're doing it at scale, you're going to be using it in a paid capacity. So I do think part of it is that this is just a newer motion to scale. And so practices around it are still being built. And I will say that it's a new tool. It's a new tool. It's a new tool. The tools themselves are being changed quite rapidly because of how new they are. Yes, absolutely. Asher, you're a data person, though. So I feel like you're the person to take this question. I was just waiting for you to finish your answer because I would say before we did this report, and even actually all last year, I've been saying, yes, second-party data is great, but it doesn't actually get to the promised land if you don't use it with first and third-party data together, right? And you need to have a solid data strategy if you're going to use this data at scale, right? And the issue is sales leaders and marketing leaders are basically going to say, help me understand how I can use this data for better territory management, right? That's a very different use case than partner managers trying to understand, should I partner with you or not, right? It's like two different questions, right? One is actually more about capacity planning, right? The other one is just, should I partner with you or not? I would debate that if you get your capacity, planning wrong, you're going to get fired, right? But if you got your partnership wrong the first time, you're going to get it right the second or third time. You're going to get it right, right? As long as you're right. So to me, this is like the second-party data and the third-party data and the first-party data, like we need to take all this data to RevOps or if there's a partner, there's got to be some operational skillset in the organization to tinker with this and fit it into the other places where data already exists, right? And so that's why I think it says slightly more accurate than the other forms of data that exist is because there's no dedicated owner of this data. I'll tell you, marketing will not give away first-party data, no matter how much IP wants it, right? And then data science teams will not give up on third-party data, no matter how crappy it is, right? Because data science teams all believe in having the widest data set to mankind known, right? I mean, if you tell them, can I give you more data? That's like, the answer is always yes to that, right? Like there's no data science person going to be like, oh yeah, no, no, I won't take this data, right? Like the answer is always going to be yes, right? And so regardless of the quality, because they know they have their ways to like figure out, is this going to help me with like accuracy? Is this going to help me with like coverage? Is this going to just fill gaps? Like I just need, is it helping with completeness? So the second-party data problem I think is more about who's the owner of the second-party data because that person, will then actually deliver the outcomes from it versus just fitting it in. So as we leverage this data, there was another, I believe it was on page 26, where you say that, what do you think the difference between the sales leaders who'd reported that partner-attached deals were less likely to close versus the ones that thought they were not less likely to close? I would say bad partner rigor. Yeah. And not the data. Yeah, because it's like, to me, this is like, again, this is my view. right? Because I stand for elevating partner leaders around the world, right? And whenever this type of stat comes up, I love the stat, but I also believe that we as partner leaders could do better to explain what happened and like, how do we get it there, right? But go ahead, Kelly. For people listening, provide some more detail around that, which is 20% of those sales leaders outside of partnerships said that they are less likely to close and then other deals. And then honestly, even 14%, almost 15% of people in partnerships said they were less likely to close. So I just wanted to explain that. Yes, that's the minority, right? That means 80% are on the other side, but that's not a small number of organizations. If we have 20% of organizations are saying, hey, these are less likely to close. So it is very interesting. So we think of this again, it's a partner program maturity issue, at least in my opinion, right? Because if the vast majority saying yes, and then there's 20% that say no, I'm pretty positive something is not gelling in the whole thing. Or it's just like a bad fit, right? Like partnerships is a bad fit for the company. But I will call something else too. And I think this is in an organization that is potentially, it's certainly not as mature on a partner program level. But one reason you could see this, that's actually kind of not a knock on partnerships is people who bring in partners when the deal's going wrong, right? So like, often you'll see direct sales teams who aren't used to working with partners. One of the first things I'll do is like, oh, you know what? I see that this is a customer or the partner. I'm going to reach out when this person is ghosting me. If they're not ghosting me and it's full speed ahead, I don't want to mess with the partner. You definitely see that attitude. So I think if that's the case, then the ones that are being attached to partners, they're going to close less, but it's not because of the partner. And in fact, it could be the opposite that you had 90% of these were going to fail and the partner came in and maybe they saved 15%. And then you're like, oh, I'm going to close this. And then you're like, 20% of them. But then if that's the only reason they're being brought in, they're being attached to a bunch of loser deals, essentially. So as we start to wrap things up, Asher, if you had to boil it down to just one thing in this report that truly indicates the future of partnership leaders, what would it be? It would be that there is willingness to leverage partnerships for growth, right? But you ask, and you have to go with the straw man plan, because if you go with no plan, the answer is always no. No, for sure. Absolutely. And Kelly, what is kind of the one key takeaway that you have that most embodies the sentiment of sales marketing leader? In the role of partnerships within their organization? Yeah, I think it boils down to they're very open to it and see the value on an intellectual level, but they haven't gotten to the deployment phase. And it's on the partnership leader to tell the narrative and to move it forward. Fantastic. Well, it was an extremely insightful report. I thoroughly enjoyed it. I'm a data geek myself. So I want to thank you both for being on the show today. And it was great to have you here. Thanks so much. All right, guys, thank you for listening to the Ultimate Channel Sales Podcast. Please don't forget to join us next time. 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