When companies asked a year ago, "What's your strategy?" 75% responded, "To grow." 💡 However, historically, only 14% improve growth and margins, because it's not trivial in a downturn. How can we join that successful group?
✂️ Cost-cutting alone doesn't work
Companies that maintained their brand spending during COVID saw a 2x growth compared to the average (BCG).
Cutting tech spending doesn’t work either.
In a world where 81% of buyers demand AI-powered software, that's a definite no-go. (G2 2023 study)
While 75% of 1400 companies, when asked by BCG, wanted to use uncertainty as an opportunity for growth, only 14% historically grow and improve margins during downturns.
The biggest group, 44%, typically experience falling growth and margins.
📑There are two playbooks to achieve efficiency and growth
Defensive - protect your top line
focus on customers with high churn risk
price up selectively to boost your margin
prioritize retention to enhance satisfaction and LTV, etc.
Offensive
personalize communication with AI
invest in new channels
push customer LTV via engagement, etc.
🤝 Can partnerships merge both strategies?
Top-performing companies today use partnerships as a smart way to combine both playbooks.
Case study after case study shows that partnerships double retention, fast-track deal closures by 50%+, and boost growth in existing accounts.
While average tech companies drive ~15% revenue from partners and marketplaces, the top performers net over 30%.
📍 Importantly, the opposite is also true. You simply cannot win today in tech without partnerships.
To win with partners you will need conviction and it may require more time and effort upfront, but eventually you can set them on autopilot.
🎯 Let's look into two real-life examples:
I recently spoke with a Chief Ecosystem Officer of a billion-dollar ARR tech company. His growth mantra? Partner attachment.
By achieving a high partner attachment rate (>70%) to deals, their deal sizes multiply. He insists his sales team attach partners to deals and he carefully curates partners who are eligible to be attached.
And the clincher? Partners must bring leads to be selected.
Simple, yet ingenious.
✔️ Or take Rippling vs TriNet Zenefits
Rippling’s CEO and CRO came from Zenefits, so market and team are comparable.
Rippling CRO learned hard way that Zenefits' anti-channel strategy didn’t work:
“In Zenefits, our experience was that the entire broker community hated us. We were direct competitors [with them], so not only did we NOT get referrals from brokers, but we also had all this friction in the market…”
Rippling chose to focus on partnerships early on and they are crushing it. Today at ~$200M ARR and 200% Net Dollar Retention, "huge" chunk of Rippling's revenue comes from partners.
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