If you’re looking for a great podcast, do yourself a favour and check out PartnerUp The Partnerships Podcast. Hosted by Jared Fuller and Justin Bartels, the weekly podcast is dedicated to exploring and dissecting all things partnerships. I just listened to 028 – The Godfather of Modern Ecosystems – Jay McBain of Forrester – Early Innings in the Decade of Partner Ecosystems, and wanted to share a few key insights from this great episode.

1. We’ve entered the Decade of the Ecosystem.

One of the big ideas I really love about this episode is Jay McBain’s assertion that we’re currently living in the early innings of the ‘Decade of the Ecosystem’. McBain lays out the recent history of sales and marketing, kicking off in ’99 with the Decade of Direct Sales, followed by the Decade of Direct Marketing. Now, McBain says, we’re entering the Decade of the Ecosystem.

Here’s why:

“…75% of world trade goes indirectly. You bought your last car from a dealer, you bought your last TV from a retailer, you bought your last jar of peanut butter from a grocer. I don’t care what company you are in, or what industry you’re in, you’re selling indirectly, for the vast majority of your sales. And you don’t own the direct sales or marketing relationship with your customer, even though you think you do. So this decade is around those partnerships who do own the customer experience, who do own the customer influence in terms of what they buy, the transaction. And then for many now in the subscription model, every 30 days forever with your client is all about partnerships.” – Jay McBain

2. Grow your ecosystem by quantifying the opportunity available to your partners.

McBain goes on to talk about how important it is for SaaS companies to quantify in concrete terms the opportunity joining your partner program presents for partners. For example, he explains that every dollar HubSpot makes represents a $5.80 opportunity for their wider ecosystem. Start with this quantified opportunity, then work backwards to structure the finer details of your partner program setup and decide how best to educate your partners on how to unlock this revenue downstream. 

“But you’ve got to map it out for them. You’ve got to show them where they need to develop skills, and you can help them develop those skills, map out what the repeatable processes and practices are. But in the end, you’ve got to elevate their confidence from a sales and marketing perspective, to go ask the customer for $10, or $3, for every dollar you sell. That’s the future of ecosystems. That’s the quantification of ecosystems.” – Jay McBain

3. Customers brought in through your partner program have a low cost of acquisition.

When host Jared Fuller asks McBain if he has any guidance or advice for companies faced with the daunting challenge of training up their partners to effectively acquire, sell, and retain customers, McBain answers that there’s one very important metric to keep in mind when balking at the effort required to upskill partners in your ecosystem.

“The one number that every CEO knows is CAC, the cost to acquire a customer. You have to start rethinking it in an ecosystem model. But there is cost there. And it’s probably similar, at least on the outset, or more, than what your direct cost to acquire customer has been over time. Why this industry and why all the major players in this industry like Microsoft is 96% channel is because over time, it is the most efficient, effective way to find new buyers to transact, and then retain them over the long term. Every restaurant to be, you know, Fortune 100 successful, needs to franchise at that level. And every software company does as well.” – Jay McBain

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