August 20, 2024

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Co-selling 101: What it is, benefits and best practices

Founder

Discover folk - the CRM for people-powered businesses

In a bid to get in front of more potential customers, companies are increasingly looking for ways to maximize their sales efforts. One effective strategy that has gained traction is co-selling. This approach involves multiple companies collaborating with a view to sell their products or services to a common customer base. Co-selling not only leverages the strengths of each partner but also offers customers more comprehensive solutions, which is hugely beneficial for both customers and service providers. In this blog post, we look at what co-selling is, explore some examples and share best practices.

What is co-selling?

Co-selling is a collaborative approach where two or more partner companies join forces. This collaboration can range from joint sales calls and shared customer information to integrated marketing campaigns and combined go-to-market strategies. The goal is to leverage each partner's strengths, such as product expertise, market reach, or customer relationships, to create a more compelling and complete solution for the customer.

Co-selling is particularly common in the tech industry, where companies with complementary technologies or services join forces to provide a more comprehensive solution. For example, a software company might partner with a cloud service provider to offer a complete package that includes both the software application and the necessary cloud infrastructure.

3 reasons why you might want to think about co-selling

There are a few benefits you can reap from starting a co-selling partnership with the right ecosystem partners, such as an increase in your lead generation, the ability to provide more integrated solutions to your customers and an expanded reach in new markets. We explain this in more detail below.

1. Increased sales and revenue

Collaborative efforts in co-selling often lead to higher win rates. Partners can present a more comprehensive solution to customers. addressing multiple needs simultaneously. This integrated approach can make the combined offering more appealing and increase the likelihood of closing deals.

2. Expanded market reach

Co-selling enables companies to leverage their partner's customer base and market presence, allowing them to reach new customers that they might not have been able to access on their own. This is particularly beneficial for companies looking to enter new geographic regions or industry verticals

3. Provide more comprehensive customer solutions

Through co-selling, partners can combine their products and services to offer more comprehensive solutions that better meet customer needs. For example, a software provider might partner with a cloud services company to offer a complete IT solution, which is more attractive to customers than purchasing separate components.

2 co-selling examples to take inspiration from

Below are two real life examples of co-selling programs from Microsoft and Salesforce.

1. Microsoft's co-sell program

One of the most well-known examples of co-selling is Microsoft's co-sell program officially known as Microsoft Commerce Incentive program (MCI). Microsoft partners with Independent Software Vendors (ISV growth) and other technology providers to jointly sell solutions that combine Microsoft's cloud services with the partners' software products. This program has been highly successful in helping partners expand their market reach while driving Microsoft's cloud adoption

2. Salesforce and Google Cloud

Salesforce and Google Cloud have engaged in a co-selling partnership where Salesforce's CRM platform is integrated with Google's productivity tools like Google Workspace. By getting their generative AI assistances, Einstein Copilot and Duet AI in Google Workspace, this collaboration allows both companies to offer a more unified solution to their enterprise customers, streamlining workflows and improving productivity. The benefits extends across three streams including providing more personalized and contextual Workspace content, helping to keep Salesforce records up to date through context provided by Google Workspace and automate repetitive tasks across the two products.

4 best practices of co-selling

To build a strong partnership, a few things need to happen.

1. Identify the right partners

Not all partnerships will yield successful co-selling relationships. It’s crucial to choose partners whose products or services complement your own and who share a similar target audience. This way, you can boost your efforts in lead generation by creating a joint solution with the right partner ecosystem. The right partner will also share your commitment to the co-sell relationship, ensuring that both parties are equally invested in its success.

There are also different types of partnership models you need to be aware of, such as:

Strategic Partners: Strategic partners are typically larger, more formalized partnerships where the companies collaborate at a high level, often involving cross-company initiatives and joint investments.
Channel Partners: Channel partners include resellers, distributors, or system integrators that help bring a product to market. In a co-selling model, the original vendor collaborates with these channel partners to reach a broader audience.
Technology Partners: These are partnerships where two or more technology companies collaborate to create a more comprehensive solution. An example could be a software company may partner with a cloud infrastructure provider to offer a combined solution of software and hosting services.
Alliance Partners: Alliance partnerships involve collaborations between companies with complementary strengths, often forming a consortium to tackle industry-wide challenges or pursue joint R&D projects.
OEM Partners: Original Equipment Manufacturer (OEM) partners typically integrate one partner’s product or technology into another’s offering. This allows one company to enhance its products with specialized components from another company.

Each type of partnership in a co-selling model has its unique strengths and strategic benefits, depending on the goals of the companies involved.

2. Prioritize data security

From trust and compliance to regulatory compliance and systems put in place to prevent data leaks, there's a lot of data security to prioritize. Different industries are governed by strict data protection regulations such as GDPR in Europe or CCPA in California.

3. Align sales processes and strategies

Aligning across a few key factors such as your sales processes can help you create consistency across your customer experience, regardless of which partner they are interacting with. This requires joint planning, a strong understanding of your partner's sales cycle and if you haven't done it yet, account mapping. You'll also need to ensure that all parties involved understands each other's ideal customer profile (ICP). These are the fundamentals to a foundation that will help with sales enablement, lead to more efficient deal closures and targeted messaging in campaigns.

4. Align on goals and expectations

Misaligned goals can lead to conflicts between partners, especially if one party feels that the other is not pulling its weight. Aligning on goals ensures that all partners are working towards the same objectives, whether it’s revenue targets, market expansion, or customer acquisition. This shared goal is crucial for ensuring that everyone is on the same page, and in reducing potential conflict that could arise.

Conclusion

Co-selling presents a great opportunity for companies to expand their market reach, increase sales, and offer more comprehensive solutions to their customers. By building selecting the right partners, aligning on shared goals, and maintaining strong communication, businesses can create successful co-selling partnerships that drive significant business value.

More resources

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