Want to close 20 consecutive quarters on plan? Any interest in a 63% win rate? Need another 1,000 registrants for your next webinar?
If you haven’t seen Moneyball, you should. Based on Michael Lewis’s book on the Oakland A’s incredible 2002 season, Moneyball is the kind of movie you can watch 15 times, but then still get excited for when it pops up on Netflix. The movie blends together fan favorite themes of competition, analytics, and the underdog-taking-on-the-system. Marketing and sales teams face challenges eerily similar to the Oakland A’s in 2002: never enough budget, lofty goals, and pressure to win.
The Winning Moneyball Formula
In Moneyball, Jonah Hill plays the biographical character Peter Brand, the A’s newest assistant GM and soft-spoken economics geek from Yale. In one of the great scenes of the movie, the Moneyball formula emerges as Brand begins to transform the way the A’s leadership approaches winning baseball games. After the A’s lost several of their best players to competitors with 3x the payroll, they had no other choice but to pivot and try something new. “People who run ball clubs, they think in terms of buying players. Your goal shouldn’t be to buy players. Your goal should be to buy wins. And in order to buy wins, you need to buy runs.”
So how did the Oakland A’s put this concept into action? Their first step was to focus on recruiting and starting players with a high on-base percentage (OBP). Rather than trying to replace their best players’ batting averages, they instead focused on replacing their best players’ OBP. One example included signing a former catcher, Scott Hatteberg. This guy couldn’t really throw the ball anymore (post injury), but he could still catch it, and he had a great OBP. Hatteberg was their new first baseman. By prioritizing OBP over BA, the Oakland A’s elevated one of the most unsexy metrics in baseball: the “walk.” Baseball dictionary for the uninitiated: getting walked is when a batter takes four pitches outside the strike zone, and then advances to first base without an “out.” To walk more = to get on base more = to score more runs = to win more. As the Moneyball formula kicked in the Oakland A’s went on a tear, winning 20 consecutive games and finishing the season with 103 wins and 59 losses. The A’s earned the second best winning percentage in the American League (63%), and got there on a shoestring budget, spending just $260,000 per win vs. the Yankees’ $1,000,000 per win.
How do you apply the Moneyball formula drive more efficiency and revenue into your business? As an example, two basic metrics typically captured by marketing and sales include opportunities created and opportunities closed. When you divide these two metrics into one, you get an even better picture of your business known as “win rate.” Think of win rate in business as the equivalent to batting average in baseball. If you open 10 opportunities and close 5 every month, that’s a great win rate; you’re batting .500. But if you open 10 opportunities and close 1 every month, that’s a bad win rate; you’re batting .100. But what is the OBP equivalent in the business world? Or better yet, what is the business equivalent to getting more walks in baseball?
Walking more in baseball translates to partnering more in business. Leveraging a partner for a warm intro and endorsement to a decision maker–that’s a walk. Asking a partner for help in an industry where they’re stronger than you–instant credibility, and less expensive. Investing in your partners and making their success and your success synonymous….now we’re getting it.
Marketing example: Our marketing team recently leveraged eight partners to help drive over 1,000 registrants to a Marketo-hosted webinar. If half of those registrants show up (500) and we close only 1%, that’s still five new customer wins with partners.
Sales example: Three of the largest deals we closed recently included highly influential strategic alliances. Our experienced sales team outsourced the implementation and consulting services revenue to a partner, while earning software revenue at 3x the average enterprise deal size. Each deal included a motivated partner working hard to make it happen. That’s Moneyball.
Follow these five Moneyball tips to win big with partners:
1. Give, then Get
The first principal of economics: People. Face. Trade-offs. As a company, every dollar you spend on project A is a dollar not spent on project B. This zero sum game demands that companies carefully balance partner interests against their own. If you can build incentives for your partners to help you (while sometimes sacrificing your own immediate self interest), in return, you may have the opportunity to build a “force multiplier.” A force multiplier is a factor that dramatically increases your scale and effectiveness as a company. Think of how many marketing and sales people you employ, and then add in the number of employees within your partner ecosystem. This incremental lift and multiplier can be a beautiful thing when you’re competing against companies 3x your size.
2. Focus & Specialization
Hiring people is expensive, and there’s a point of diminishing returns for every company. It’s simply impossible to hire for every needed specialty in every industry in every country. Instead of spending six figures on a full-time, subject matter expert, why not recruit a partner with established expertise and incentivize them to help you?
Marketo recently built a task force with an agency that has unique expertise in a specific industry. We didn’t have to go out and hire a team of experts. Instead, we focused in on this partner and made a conscious effort to include them early and often in the sales process. As a result, we’ve closed more deals in that industry in the last 12 months than in our entire history as a company.
3. All Hands on Deck
There are three key pillars to any productive partnership program:
- Recruitment: Identifying and recruiting highly specialized partners
- Enablement: Training and nurturing partners to unlock holistic value (1+1=3)
- Commitment: Establishing and providing incentives for both partners and internal stakeholders to rally behind a “better together” strategy
The number one partner momentum killer is “channel conflict.” Channel conflict occurs when marketing and sales compete with their channel partners’ area of expertise. Competition is a good thing–it raises the bar on quality and drives price down–but it needs to be refereed with crisp rules of engagement. Compensation drives behavior, and the most effective lever in driving a partner-friendly ecosystem is to incentivize your stakeholders to play nice in the sandbox. This step is absolutely, positively, mission critical.
4. No “Barney” Meetings
Remember Barney? “I love you, you love me, we’re a happy family…” Barney meetings with partners are not okay. These are particularly common among prospective partner discussions. As a rule of thumb, you can expect that at least 80% of these Barney meetings with partners will be a waste of time. To mitigate this, build a process that automates the discovery stage with partner prospects. At Marketo, we’ve built a partnership program with a number of prerequisites that help set the bar for a successful partnership. A thorough, automated certification program with thoughtful prerequisites can help filter out false positives.
5. Measure Success
How do you ensure partner contribution is widely recognized within your company? A clear gauge on partner progress with high visibility throughout the company is a fundamental need for any marketing and sales organization looking to build a force multiplier.
Start with a baseline and ensure your measurement system is widely adopted, simple, and always improving. At Marketo, we’ve tried a variety of partner success metrics (average deal size, customer retention, time to close, etc.), and we’re constantly tweaking and evaluating their true impact on our business. A world-class partner program should promote equal parts specialization, balanced investment, and bi-directional revenue contribution. Here’s a simple barometer to help you get started in measuring your top partners:Overall, what I love about Moneyball is similar to what I love about business: our challenges are analogous. We have to be resourceful, creative, and approach the game differently in order to win. So if you’re a marketing or sales professional, try leaning into your partner ecosystem and invest in a force multiplier to beat the competition. Play Moneyball!
If this was helpful and you’re interested in learning more about Marketo’s evolving partner-first culture, or how to build your own Moneyball playbook, join me for my session, Marketo Moneyball, Building a Partner-First Culture, at the 2016 Marketing Nation Summit.