Keys to Marketplace Success in 2021
If getting listed or growing on Cloud Marketplaces is one of your new year’s resolutions, you’re in good company.
More than 35% of Forbes’ Cloud 100 companies are active Marketplace sellers, and our State of Cloud Marketplaces survey found that 70% of sellers plan to invest more into Marketplace as a go-to-market strategy in 2021.
While the enthusiasm around Cloud Marketplaces is encouraging, the channel isn’t a one-way ticket to easy sales. Getting your Marketplace strategy and workflow right takes some effort, but you don’t need to do it alone.
In our recent webinar, Keys to Marketplace Success in 2021, Don Addington of Tackle, Udi Nachmany of Snyk, and Michael Musselman of Lacework shared tips and tricks from their experiences getting started and transacting on Marketplaces. We talked about:
- What you and your team need to know as first-time Marketplace sellers
- Which KPIs to focus on to convey Marketplace’s value to leadership
- How to educate and empower your sales team
Here’s what we learned are some of the keys to successfully kickstarting Marketplace sales:
Understand everyone’s role in launching your Marketplace listing
Don Addington, Tackle’s CRO, has spent his career in software sales and has helped sellers transact on Cloud Marketplaces for years. One of the challenges he sees new Marketplace (MP) sellers make is underestimating the work that comes after the listing is live.
“I just throw a listing up there, and then a lot of the work is done, right?” is a misconception he’s heard many times before. In reality, you need to put in the work to integrate Marketplace into your selling motion and grow your organic sales.
One way to get your Marketplace journey off on the right foot is to establish who owns the project and its success.
During the discussion about the importance of ownership, Michael, Udi, and Don identified three stakeholders you need to consider.
A leader kicks off the initiative
One or two people typically rally the company around Marketplace in the beginning. Udi Nachmany, VP Cloud Alliances at Snyk, shared that in his company’s early days on Marketplace, “the company was moving so fast and the business case for Marketplace wasn’t proven, so I needed to prove the “why.”
His Marketplace team started as a few people with a product management mindset that collaborated across departments, and Udi believes it’s best to tap people in leadership roles. As time goes on, though, expect the team will change.
“We see it evolving right as we speak at Snyk away from just one person holding the bar for the rest into a full-on program that has clearer ownership.”
Michael Musselman, Sr. Director of Technology & Strategic Alliances at Lacework, echoed Udi’s thoughts.
“Udi is right; most of us in the role feel like we’re an octopus many times. You’ve got eight legs in eight different worlds, and most of it’s through influence. It’s not through any power structure,” Michael said.
“For me,” Michael continued, “it started with our president/CRO explaining we hear customers asking about [Marketplace]. Are you on board that if we go do this, I’ll help do the education and the enablement around it to the sales team? And, by the way, it’s going to affect quota, compensation, it’s going to affect a few things so you have to understand this and in return, set the right expectations.”
Marketplace partners unlock co-selling opportunities
Another important relationship is the one with Marketplace representatives.
“If you’re putting up a [Marketplace] listing, you need help from the other side. While Tackle can absolutely answer every question and guide you, an important thing for me was establishing the relationship with my Marketplace liaison,” Michael shared.
“Not only do they have their own best practices and guidance, but they are usually the ones that you are building relationships for co-selling.”
Sales teams impact transaction momentum
The final critical component in your Marketplace strategy is getting your sales team on board. According to Michael, that includes “educating them on the good, the bad, the ugly.”
“Set the right expectations. Let them understand what we can control in the process. Also, if you’re doing things with a partner in the middle, like Amazon CCPO, there’s a point in time when we are all out of control. You need to make sure that everyone understands what to expect. Lead the sales team through the whole journey and establish how to interoperate to go from zero to somewhere pretty quick.”
One of the key ways of doing this is to first educate your sales team about Marketplace and then arm them with the tools to use it. More on this in a later section.
Set realistic expectations around KPIs
Sooner or later, the conversation around the Marketplace in your company is going to turn to metrics.
“Someone is going to try to tie you to a KPI or an outcome, and when you’re walking into the unknown, that’s a very scary thing to sign up for,” Michael said. In the end, he thinks being tied to at least one KPI is a good way to stay motivated and focused, though.
Udi’s suggestion for setting KPIs and goals is to ask yourself what you’re trying to achieve. “Are you trying to have an enterprise fulfillment step, leverage cloud budgets like EDPs, or are you going after SMBs? All of them will need a different strategy.”
Don’s advice for handling Marketplace KPIs is to set expectations based on how long you’ve been on the MP.
“I think owning a number makes Marketplace a legitimate piece of your revenue strategy and then ties you even closer to the sales teams, but you need to find ones that can buy you more investment into the channel.”
Don has previously shared a Cloud Marketplace roadmap with KPIs and listed some metrics to look at that aren’t merely revenue, including:
- How long are the Marketplace sales cycles, and are they faster than direct deals?
- If you use a “land and expand” strategy, has the time between the first and second deal collapsed?
- Did your time with legal shrink on Marketplace deals?
Don adds that “being smart about your KPIs as you start to set up the program might relieve some of the pressure to produce revenue.”
Empower and educate the sales team to get faster buy-in
The idea to transact on Cloud Marketplaces usually doesn’t come from the sales team, which means you need to get their buy-in. Don noted that “you’re trying to set Marketplace up and make it sound like it’s a better way to sell, and a lot of ways it is. But it also takes some learning, and you’ve got to go through the first couple to get it down.”
The panel talked about four ways to make the sales buy-in process as easy as possible.
Coddle the first deal
The first Marketplace deals deserve plenty of love and attention. At that point, sales teams are just learning the channel’s ins and outs, and you want to maximize the chance of success.
Din stated that “first deals are super, super important. You know, coddle that deal. Surround that deal with love. If you’re a Tackle customer, come to Tackle and we’ll help you build the Private Offer via Tackle Offers, and if you don’t use Tackle, the same story—we want to help.”
Share sales team wins early and often
A successful MP sale is a cause for celebration, and you shouldn’t be shy about sharing the good news. Don shared that you should “take those first wins and put the reps up on a pedestal by sharing the stories.”
Tackle does this with a Slack channel dedicated to sales wins and lessons learned. “We have everybody do a quick two-minute win Loom video, and we’ve got a library of wins. Reflecting and keeping that relevant is super important.”
Michael also likes to shine a spotlight on leading sales team members. “I put a lot of the initial sales reps up on a pedestal amongst their peers. Then it wasn’t me talking about why it was helpful and how it accelerated the deal—it was number one sales rep telling you.”
Soothe concerns over losing control of deals
Changes to workflow or who touches a deal can cause sales teams to put their walls up instinctively. Udi said that “no salesperson likes to lose control, and even though this is a more efficient and simpler process, in many cases, it doesn’t matter because it’s a new thing.”
Udi continued, “to get the sales team on board, we’ve offered Marketplace as an additional option that doesn’t replace anything or cannibalize our direct sales. Then, we talk about the promised land—the co-sale, the expanded pipeline, and the deeper partnership we’re going to have.”
The sales team’s feeling they’re “losing control” of the sales process comes up a lot, but Don sees it differently. “With Private Offers, you’re giving your buyer a link to click and buy the software. That’s more control than you usually have in an enterprise sale where you are running around trying to make sure you have all the needed approvals.”
“Once you get the motion down and the actual execution part, there’s a lot of friction reduction there,” Don said.
Embrace continuous learning
Perhaps one of the most important (and ongoing) ways to empower your sales team is education. In the beginning, Michael notes that that will focus on “why we are doing this, discovery questions to ask your prospects early, and other big picture topics.”
As you learn the process, Michael suggests “creating education or checklists for the process so that you can just say, ‘Hey, here’s what to expect, here’s what’s going to happen next.”
Expect learning to continue the entire time you transact on Marketplace, especially since updates are frequent. Udi noted that his team has questions, even after being on Marketplace for a year.
“One rep was surprised that we’re trying to fulfill enterprises on the MP since they thought it was just about SMB soft servers. So you need to constantly drive the message that Marketplace is a tool to add to your toolbox.”
Approach Marketplace renewals on a case-by-case basis
Marketplace transactions are useful for closing initial sales quicker and easier than direct deals, but what about when it’s time to renew? All of the panelists suggested looking at renewing on Marketplace on a case-by-case basis.
“I want to be very careful about pitching Marketplace aggressively to our renewals team. They are doing a fantastic job together with our customer success folks at retention, expansion, and cross-selling. The customer must be asking for it, and it must enable something for us that would be very difficult or impossible to do otherwise,” Udi shared.
Michael is also cautious about when to renew on Marketplace. “I don’t want our renewals to go as a rule through Marketplace because we’re not ready for that yet,” he said. However, they’ll renew on Marketplace if there’s a fit.
“One of our main customers in the UK managed to renew with us in part because of their EDP. We were able to have a three-party conversation with the Cloud Provider to make it work,” Michael added.
Sometimes, all it takes to see the value in renewing on Marketplace is a change of perspective, though. Don recalled a scenario on the webinar where a CFO was apprehensive about renewing via Marketplace because of the cost to transact. However, the stronger your partnership is with the Cloud Provider, the more you can lower your transaction fees.
“Getting to the top tiers of the AWS Marketplace program in ISV Accelerate starts to bring down listing fees, and then you’re at a window of three to five percent for a renewal deal coming in. I was explaining this to the CFO, and he said, “Paying three percent or five percent just to guarantee the collection is worth it for me.”
Whether you’re hoping 2021 brings your first Marketplace listing or an overhaul in your current strategy, taking time to make a plan is essential. Setting expectations upfront keeps everyone focused on what’s important, and nurturing relationships inside and outside of your organization helps everything run smoothly.
Want to hear more about what our expert panelists had to say about making the most of Marketplace? Watch the full webinar here.
