Partnerships and Marketplaces are now driving ⚡️ 3X leads compared to Product (PLG), reveals a new study.
It turns out, PLG companies are not anti-partnerships, after all. Let's delve in.
OpenView’s 2023 Product Benchmarks Report, surveying 1058 respondents, has revealed the primary growth drivers for SaaS companies today.
Intriguingly, these insights come from the same VC that coined the 🗽 ProductLedGrowth framework in SaaS. OpenView, with $2.4 Bn under management and investments in companies like Calendly and Datadog, is uniquely positioned to shed light on what's working in the SaaS ecosystem.
🤝 Partners and marketplaces are contributing 14-15% of leads
As sales from organic sources decline YoY, partnerships are stepping up, sourcing 11% of leads or 14% if we include leads from third-party marketplaces.
Although still in their early stages, marketplaces are emerging as distinct revenue sources within the SaaS GTM strategy, contributing on average 3-4% of revenue.
Simultaneously, companies generate 5% of leads from PLG, which include in-app invites, product viral loops, etc.
📊 Total partners and marketplace contribution is consistent across monetization models
The total contribution of 14-15% from partners and marketplace strategies remain consistent across Free Trial, Freemium, and Sales-Led models.
Within this mix, Sales-Led companies generate more leads from partners (12%), with a Partners to Marketplace ratio of 6:1.
Freemium businesses, on the other hand, get a third more leads from partners (8%) vs marketplaces.
Companies with Free Trial models fall in between these ranges.
🎯These findings confirm shifts in user behavior
Organic sources are becoming saturated, and buyers are increasingly relying on trusted sources like partners and referrals, as opposed to engaging with sales teams.
Simultaneously, the role of cloud marketplaces like AWS, Atlassian, and Shopify is growing, as the next generation of companies build and distribute products where users already spend their time.
💡 Learn more about Partnerships vs PLG
A few months ago I delved into the dynamics of Partnerships vs PLG with Kyle Poyar, Operating Partner at OpenView VC and one of the authors of this report.
We discussed the balance of direct and partner-led growth in the early stages, how to leverage Cloud Marketplaces to boost enterprise sales, and partnerships/marketplaces case studies from Supermetrics, Grammarly, and Shopify.
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