In this series, we’re breaking down key findings from our 2018 State of AppExchange Partners Report, highlighting how successful SaaS companies leverage the Salesforce AppExchange. Download the full report here, or check out part one for product and company insights.
Our 2018 State of AppExchange Partners Report shed light on how successful Salesforce partners navigate the ecosystem in a variety of ways. One of the areas in which we focused our questions is growth — current status, projections, challenges, opportunities and more. Here are some takeaways from our growth-related questions that are worth noting:
Company Growth is in the Forecast
Current AppExchange partners are bullish about revenue outcomes. Though self-reported, most in the ecosystem expect growth — a full 99% predict at least a steady growth rate in 2018. What does that look like? Eighty-six percent of respondents forecast they will grow revenue more than 20% year over year in 2018.
When you move the threshold from solid growth to substantial growth, many current AppExchange partners still qualify. 36% of respondents expect to be at 50% YoY growth…and 4% are looking to IPO in the next twelve months. Partners are feeling good about where they’re at — and where they’re headed.
Growth Means Acquiring Customers — Then Keeping Them
While companies expect growth, they don’t always see it come easily. Two of the top three growth challenges respondents cited are acquiring new customers (of course) and reducing implementation costs and time.
It’s clear from the responses that experienced partners are well-aware of the importance of user experience and reducing obstacles to adoption that cause customers to churn before fully implementing a product.
In terms of acquiring customers through the AppExchange, our best advice is to invest in learning how to work with Salesforce — and learning how to equip Salesforce’s team to work for you. Check out our series on effective onboarding, or our tips on expediting deal flow.
Engineering Talent In High Demand, Hard to Find
It’s a good time to be a tech whiz: Irrespective of partner type, revenue, or number of employees, respondents across organizations named hiring engineers one of their top three growth challenges.
Of the 49% of customers looking to grow engineering staff by 50% or more, 21% cited their number one organizational challenge to be finding and hiring engineers.
A play that works for some growth companies is to combine internal engineering talent with experienced partner resources. Optum Analytics uses this approach to get the most out of a PDO while maintaining some resources in-house. According to Director of Strategy and Design Melissa Laake, Optum’s blended approach of using internal resources and CodeScience has accelerated their time to market beyond expectations.
“Finding qualified engineers is a struggle for most companies,” Laake says. “We have been able to strike a balance between leveraging strong internal Salesforce talent and augmenting from consulting partners in the ecosystem.”
There’s Growth Opportunity Throughout The Ecosystem
Salesforce has recently taken steps incentivizing partners to build on the AppExchange.
The organization is lowering barriers to entry for first-timers by reducing the Percent Net Revenue (PNR) share from 25% to 15% for ISVforce applications (basically: partners get a bigger piece of the pie).
Salesforce also introduced the Connectors model this year at Dreamforce, allowing companies with a current API presence within the ecosystem to get onto the AppExchange with less friction than ever before.
With those enticements in place and prospects seeing how other companies are thriving on the AppExchange, expect to see a greater volume of new partners in 2018.
Ready to take the plunge? We’re happy to schedule a consultation to see if you could utilize the first Salesforce PDO Master to improve your product offering — or build a new one.