Should you build an app marketplace? 5 reasons why it might be time.
Jun 27, 2023
The demand for integrations in B2B SaaS software has increased significantly in recent years. Integrations are now considered a key factor that influences buyers when choosing software over competitors. By providing additional functionality and promoting interoperability between solutions, integrations create a seamless customer experience. However, building an integration is only the beginning. To promote new solutions to the wider market, it's essential to build an app marketplace. (To read more about app marketplaces, check out our “Ultimate Guide on Building App Marketplaces”)
Marketplaces allow integration partners to create an app listing with all the necessary information, resulting in a lasting place for customers and prospects to see the solutions that integrate with your software. Building an app marketplace is a substantial investment in terms of time and money, so it's critical to determine the right time to launch.
In this blog post, we will explore the five main indicators that suggest it's time to build an app marketplace. We will discuss these indicators, provide examples of real-life scenarios that led to the development of app marketplaces, and explore how building an app marketplace can benefit your business based on the discussed indicators.
What is an app marketplace?
Before we dive into the topic, it's important to define what an app marketplace is.
According to Aircall's blog, an app marketplace is an online platform that lists software applications for desktop computers and mobile devices. In the B2B SaaS industry, app marketplaces are commonly used to promote the different integrations available within a company's ecosystem.
For example, HubSpot's app marketplace provides a comprehensive overview of every integration available with HubSpot, showcasing the wide range of additional functionality that can be added to the HubSpot CRM.
Building an app marketplace may not be the right decision for every company, and attempting to create one that is ineffective or underutilized can be a significant waste of time and effort.
Therefore, we will examine five key indicators that suggest it is the appropriate time to invest in an app marketplace for your business.
As a result, it's crucial to listen to customer feedback and adjust your product or service accordingly. A key indicator that you should consider building an app marketplace is when customers express a need for more integrations with your core product. This growing demand indicates that you either need to build an app marketplace to encourage developers and businesses to create more integrations, or promote existing integrations more heavily. An app marketplace will help advertise these integrations more effectively to your customer base.
By providing a centralized location for customers to view and download integrations, an app marketplace offers an overview of your integration ecosystem. Building an app marketplace in response to customer feedback can improve customer satisfaction and increase adoption rates of your core product.
A robust technology ecosystem with numerous integrations encourages customers to connect more tools to your core product. As a result, it becomes harder for them to replace your solution, as they must also consider the impact on connected tools. Moreover, when customers can easily integrate other tools into your core solution, they'll spend more time using your software and less time switching between applications.
This increased adoption leads to higher customer retention and renewal rates. If you’re seeing significant customer feedback requesting more integrations, it’s likely time to invest in an app marketplace to fully support this strategy.
Reason 2: Gain A Competitive Advantage
If you operate in B2B SaaS, chances are you are competing with other solutions in your specific vertical. This competition can be exacerbated by your competitors' focus on integrations. Through the eyes of a potential customer, consider two similar software options: the first with comparable core features to the second, but the second with an app ecosystem which supplies a ton of additional value to the product. The second option will win 9/10 times.
This competitive market coupled with, as we mentioned earlier, buyers highly valuing integrations as part of their buying decisions, means that businesses that are looking for competitive differentiation should consider building an app marketplace.
The app marketplace in itself will not be a significant difference when comparing you to a competitors, however what it will do is encourage more developers to create solutions that will fundamentally add value to your core product offering.
An additional reason that needing competitive differentiation can be a core reason for building an app marketplace is the way it can act as a marketing play to influence buyer behavior.
70% of buying decisions have already been made prior to someone contacting your business for the first time. That means that potential buyers are doing extensive research before booking a demo and buying your product. Having a publicly facing app marketplace is yet another place for buyers to investigate and evaluate prior to booking a demo with you.
Let's expand on this a little further. Let's say I am in the market for a customer support tool. I do my research and find two tools that are highly rated and are priced at around the rate I am willing to pay, and have comparable features. Through my research however, I am only able to see one with an app marketplace, from which I am able to see that they integrate into the CRM that I use.
In this scenario, I may book on a call with both in order to determine the integrations with the other tool. However, in some cases, the publicly facing app marketplace has given me enough confidence to go ahead based on the information that is being provided.
App marketplaces can be the difference between you and your competitors as it opens up your full integration ecosystem to any potential buyers.
This is confirmed by Kevin Bocek, VP of Ecosystem and Community at Venafi, who says “An app marketplace provides customers confidence in going with Venafi over competitors, it gives Venafi the opportunity to show our technology leadership to prospective customers.”
“An app marketplace provides customers confidence in going with Venafi over competitors, it gives Venafi the opportunity to show our technology leadership to prospective customers.”
Reason 3: Public API Usage is Up
The focus on integrations has led many businesses to make their APIs public in order to encourage developers to work on new solutions for their products, and make it easier for current solution providers to develop integrations. If you're seeing people use your public API to create new solutions, it could be an indicator that now is the right time to build an app marketplace. There are several reasons why this is a good idea.
Firstly, an app marketplace establishes a platform for developers building solutions with your API to showcase their integrations to your wider customer base, potentially leading to additional leads for their business. Building an integration may initially solve one of their customer's current needs, but there may be other customers who could also benefit from the integration. An app marketplace can offer a great way to get it in front of your current customer base.
Secondly, manually managing and adding all the new products built on top of your API can be a daunting task, particularly for partner teams struggling with resourcing. Adding this to their list of tasks could result in a lack of quality control when it comes to integrations, and integrations that aren't widely promoted. By creating an app marketplace, you can systemize the integration submission, approval, and marketing process, offering a turnkey solution for developers and providing a consistent user experience for your customer.
Reason 4: Lack of Resources is Limiting Growth
Due to resource constraints in the current economic climate, managing an integration ecosystem can be challenging for many teams. The process of approving, testing, and promoting new integrations requires a significant amount of dedicated resources from various teams such as partnership, product, and marketing. If your internal teams are struggling to keep up with this workload, building an app marketplace may be the solution for you.
An app marketplace provides a centralized platform for partners to submit and update their integration listings which can be made publicly accessible, eliminating the need for manual promotion efforts. Utilizing a turnkey app marketplace solution like Pronto significantly reduces the workload for your team.
Pronto allows partners to manage their own listings, enabling them to handle updates for their specific app marketplace entries on their own. This saves considerable time, as your team won't need to chase content to optimize app marketplace listings. While your team will still approve content changes to maintain a high quality app marketplace, the elimination of content creation tasks leads to substantial time savings for lean teams.
The traditional approach to launching integrations involves teams deciding to build an integration, planning it, building it, deploying it, and then committing marketing resources to promote it to a broader market.
In contrast, with an app marketplace, APIs are readily available and companies can begin building integrations immediately. Once an integration is completed, it is submitted for approval and, upon receiving the all-clear, its app listing is launched and automatically promoted to the market through the corresponding app marketplace listing.
Along with reducing the workload on your internal teams, an app marketplace can also provide analytics and insights into which integrations are performing well and which ones may need improvement, allowing for informed decisions regarding promotion, investment, or retirement of integrations.
Reason 5: Looking to Build an Extra Stream of Revenue
In the current economic environment, many businesses are seeking new ways to generate revenue, and building an app marketplace may be a worthwhile consideration. If your product gains wide exposure and attracts the attention of developers and software companies who are keen to integrate with it, you may be able to charge a listing fee or take a share of the revenue from transactions that occur through your app marketplace.
Atlassian's app directory is an excellent example of this. According to their terms of service, if a customer purchases software through the Atlassian marketplace, you as the software provider will receive 85% of the gross revenue. However, if a customer discovers your product through your Atlassian app directory listing and purchases it there, they will take a 15% cut of the revenue. This is lucrative for Atlassian, especially considering the number of customers and solutions listed on their app directory.
The second model that businesses use to monetize their app marketplace is to charge a flat fee for listing. Salesforce's AppExchange charges $2,500 for a security review of your product, plus a nominal $150 fee for listing. While these numbers may not seem high, given that Salesforce's AppExchange has nearly 5,000 apps with more being added every day, it can be a significant revenue boost.
A further way in which app marketplaces can increase overall revenue for your business is through the expansion of your technology ecosystem. Creating an app marketplace signals to other software providers that you are open to integrations, attracting more technology partners in the process. With an increased number of technology partners, you gain access to a broader customer base and enjoy collaborative marketing opportunities, such as co-selling.
To elaborate, forming a technology partnership with another software provider enables you to utilize tools like Crossbeam and Reveal to share account data and identify overlapping accounts. This leads to a joint value proposition and coordinated efforts to secure accounts.
By attracting more technology partners, you gain access to valuable data, execute targeted go-to-market strategies, and ultimately close more deals, resulting in increased revenue for your business.
In conclusion, developing an app marketplace can be a strategic decision for your business. However, it's crucial to determine the appropriate moment to invest.
If you're encountering increased demand for integrations, stiff competition, growing adoption of your public API, limited resources, or are overwhelmed by internal teams managing partner solutions, it might be time to consider building an app marketplace.
When exploring app marketplace development, you have a variety of options: build it in-house, collaborate with external developers, or utilize a turnkey solution like Pronto.
Pronto's app marketplace solution enables you to swiftly establish a dynamic app marketplace at no cost. It offers a comprehensive solution with features such as partner ratings, reviews, and lead capture forms to drive business to your partners and strengthen relationships.