Jacob Rouser
Mar 14, 2019
In this series, we’re breaking down key findings from our 2019 State of AppExchange Partners Report, highlighting how successful SaaS companies leverage the Salesforce AppExchange and how network effects are taking hold. Download the full report here!
Part 1: Product and Company Insights
Part 2: Growth Insights
Part 3: Technology and Platform Insights

Throughout this series, we’ve been breaking down and expanding on the findings from our 2019 State of AppExchange Partners Report. In this penultimate piece, we take a deep dive into Salesforce as a channel and how you can leverage the ecosystem to grow your business.

A Two-Way Approach: Your AppExchange Listing and Selling with Salesforce

Ian Gotts, Founder and CEO of Elements.cloud, said it best when asked about the AppExchange in our State of AppExchange Partner Report, “You need to be on the AppExchange if you are serious about ramping sales.” Companies on the AppExchange see an average of 48% of their leads generated from the Salesforce channel — up 10% from the previous year.

The Salesforce channel includes the AppExchange listing, partner resources, Dreamforce, World Tours, and so on. When we look at these sources, we see that a company’s AppExchange listing is responsible for 61% of Salesforce-generated leads.

However, while a compelling listing is important, it is essential to co-message and co-sell with Salesforce. In a recent webinar where we revisited our Dreamforce ‘18 panel to discuss their 2018 results and 2019 predictions for the AppExchange, Tom Martin, CEO of Glance Networks, stressed, “[It] is really about building those relationships and especially honing in areas like focusing on the Salesforce sales engineer and solution architect staff to really make sure they understand what you provide.” This relationship is essential because they are the ones who are demoing your product to potential customers. Having a well thought out value prop that is combined with Salesforce’s value prop makes it easier for the Salesforce team to approach their clients with new solutions.

Brian stressed that many deals closed on the AppExchange are still Enterprise sales and are more complex than clicking install. “The AppExchange can’t be viewed as an if you build it, they will come. It is still enterprise sales. You have to have Alliance Managers, and you have to work with the sales teams that actually go do the face-to-face meetings to get these large deals done.”

This is partly the power of network effects, both the ISV side and Salesforce themselves contribute to the large volume of leads coming from the AppExchange. Creating informative listings, cultivating glowing reviews, and working with your contacts at Salesforce play a considerable role in increasing the number of leads attributed to the listing, but Salesforce is also continuously implementing new technology improvements that have the potential to draw in even more leads.

AppExchange Improvements and Insights

As covered in the AppExchange Partner Keynote at Dreamforce ‘18, Salesforce is rolling out enhancements to the platform. It will be interesting to evaluate the impact they have on the number of leads generated from listings.

One such addition is intelligent recommendations. The AppExchange now includes a “Recommended for You” page, offering customers the opportunity to discover relevant solutions to solve their business problems. The page shows suggested solutions based on customer location, install history, profile data, and more. These insights provide partners the information they need to have their listing discovered other than only coming up on search results.

While these enhancements are significant, the update with the biggest potential impact on the lead generation power of listings is the introduction of Partner Analytics. This much-anticipated release gives companies unparalleled insight on all aspects of their AppExchange listing. User behavior can be broken down in detail, leading to actionable insights that help optimize listings.

With Partner Analytics, companies can see and analyze:

  • How customers got to your listing
  • What they did once they got there
  • What search terms they are using to look for your app
  • What search terms they are using when installing your app
  • And more

We had the opportunity walk through a live demo of the Partner Analytics dashboard with Bryan Corcoran, Senior Product Manager of AppExchange Intelligence, late last year — you can check out the full breakdown here.

These updates have the potential to have a major impact for partners with the opportunity to see exactly where they’re coming from and fine-tune their offering(s).

The AppExchange is a Growth Multiplier

Our survey surfaced that being part of the AppExchange has increased company revenue by at least 20% to greater than 50% for almost half (49%) of respondents — an increase from 45% last year.

These results demonstrate a continued pattern of accelerating revenue growth for partners. As we covered in the first part of this series, network effects are coming into full strength, and this will only help accelerate revenue growth. Everything will start compounding on itself and create a virtuous cycle — as Salesforce and the AppExchange grow, the number of Salesforce generated leads will also grow, in turn resulting in increased revenue for partners.

In our webinar, AppExchange Partners: Benchmarks and Predictions for 2019, Tom Martin shared his first-hand experience with the ecosystem acting as a growth multiplier.

“We’ve grown 65%+ year-over-year. And in going through 2019, we see maybe that trending up not just a little bit, maybe a lot. The fact that Salesforce as a channel continues to really develop their enterprise chops has helped us a lot.”

Salesforce Events Continue to Gain Value

While an online presence on the AppExchange accounts for a large portion of partners’ leads, Salesforce events still hold a high-importance for lead generation.

It comes as no surprise that Dreamforce is the largest lead generating event sponsored by Salesforce — 72% of partners responded that they were maintaining or increasing their investment in Dreamforce when compared to last year. World Tours investment is growing as well. 32% of respondents are increasing their investment, which is up 7% from last year.

Ian Gotts had this to say about the roll Salesforce-sponsored events play for Elements.cloud.

“We sponsor and speak at User Groups, Dreamin’ events and World Tours, but what we love most is the 3-minute DemoJams [at Dreamforce]. We walk off stage and take orders for our app.”

The Channel Conflict Paradox

In this year’s report, we opened up the survey for partners to provide their thoughts and feeling about the ecosystem and one area noted was a concern regarding channel conflict between Salesforce and ISVs that are already on the AppExchange.

Salesforce has products that directly compete with AppExchange products. Through both organic product development and M&A acquisitions of companies such as ExactTarget, Steelbrick, and Mulesoft, some partners expressed concern that revenue will decrease due to losing customers to competing Salesforce products.

However, our research shows this has not been the case — partners that compete with Salesforce have actually seen their revenues increase.

Our hypothesis as to why this is happening is that the additional sales and marketing Salesforce does within the space provides a lift for everyone due to the increased traffic. And now with the enhancements touched on at the beginning of this piece such as the recommendations page, partners have even more opportunity to capitalize on Salesforce’s efforts and capture leads once they are brought to the AppExchange. The challenge of competing directly with Salesforce is not removed by this, however.

As a channel, Salesforce continues to support partners for growth. Continuously enhancing the platform and giving partners more tools to improve their products only strengthens the ecosystem, which accelerates growth.

Are you evaluating the Salesforce ecosystem and need a hand? Contact us! We’re the only organization with 10 years of experience and 220+ applications brought to the AppExchange.

We’ll be wrapping up our series by taking a deep dive into investment within leading-partner companies on the AppExchange. Subscribe to our blog to get it delivered to your inbox.

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