Rethink Commerce Blog

Redefining Vendor-Partner-Customer Relationships across Sales Channels

Posted on November 12th, 2012 by

Software as a service is shifting the software industry away from upfront implementation models and toward ongoing subscription models. With this shift comes a need to develop ongoing, rather than transactional, customer relationships, where self-service and customer support are increasingly intertwined. As SaaS vendors look to expand their sales channels and transition partner sales to subscription models, they may discover that traditional channel partners are not always well equipped to manage SaaS accounts. The changing software sales model requires new levels of partner oversight by vendors and increased customer outreach efforts by partners in order to succeed. Here are some steps toward achieving success with partner-based SaaS sales models.

Close-Knit Partner–Customer Relationships

SaaS not only shifts business models, but also raises customer expectations, creating new responsibilities for channel sales partners. Partners accustomed to onboarding customers with large upfront engagements, in order to sustain a steady or growing revenue stream, must now develop more sustained relationships with those customers, who are in turn becoming more demanding. Software vendors can facilitate the partner-customer relationship with multiple techniques, all of which accelerate customer understanding and put new tools in the hands of customers.

From the first interaction, software vendors need to work to set expectations with channel partners regarding what constitutes a successful customer interaction. SaaS customers need to know when they should contact their sales partner, when to talk to the software vendor, and above all how to use the self-service tools available to them. This may require SaaS vendors to work closely with partners to develop support portals or knowledge bases to address common customer concerns, as well as to consider service agreements that identify when vendors should be called in.

A solid resource portal specific to the channel partner can play a crucial role in enabling partners to serve customers, allowing vendors to focus on software development and putting more relationship building on the shoulders of partners.

A close customer relationship is important not only for smooth onboarding and initial customer satisfaction, but also for attracting ongoing sales through subscription renewals, cross-sales, add-ons, additional support services, and other offerings. As sales channel partners become more familiar with the customers in their niche, they become better prepared to understand those customers’ unique needs and recommend solutions accordingly. A combination of partner expertise and vendor knowledge of popular products and profitable sales approaches can help identify the proper path to adoption for particular customers.

SaaS has truly “democratized” software, not only making it more accessible to more people, but also giving customers a closer relationship with vendors and more impact on features and services. Vendors and partners must provide a clear channel of communication for customers to evaluate products and provide immediately feedback. And when SaaS vendors are equipped to rapidly develop new features in response to customer feedback (communication facilitated by the partners), they will be able to spark customer loyalty and renewals in unprecedented ways.

Build Smaller Chunks of Functionality and Grow with Their Needs

The old-school software license is obsolete, and the SaaS subscription model is taking its place. While the end of large license fees might make some companies mourn, the change in compensation models actually provides significant opportunity to SaaS vendors and their partners. Rather than investing a large upfront effort in making a big sale and leading a complex implementation with the potential to devastate customer satisfaction if anything goes wrong, vendors and partners can work together towards understanding customer needs and bringing in different components of a comprehensive SaaS solution one piece at a time.

Special tools can help SaaS vendors manage their subscription offerings, monitoring both direct and channel partner sales. Dashboards and reports that show popular products and effective promotions, both overall and for particular markets, can be used to help sales partners develop strategies for building out their customers’ SaaS platform. By experimenting with different product and service combinations and tracking every promotional effort, SaaS vendors and sales partners can eventually perfect the mix of software solutions that will appeal to certain types of customers.

Automating the Details

With the understanding that the customer relationship is what truly counts, SaaS vendors will also need to work with channel partners to automate many routine sales processes, including onboarding new customers; processing subscriptions (billing infrastructure), renewals, and upgrades; and providing discounts based on customer type and history.

Custom tools  and integration APIs can revolutionize the customer management process for vendors and partners alike, giving partners as much autonomy as the vendors are comfortable with, or enabling vendors to retain approval over certain types of transactions. By automating as many sales and administrative processes as possible, vendors and partners are freed to focus on building customer relationships and finding out what works to inspire customer renewals, add-ons, upgrades, and especially conversions.

In the SaaS model, it’s all about the relationship. But don’t neglect the many factors that inform that relationship: marketing outreach, educational resources, self-service portals, and intermittent check-ins from partners and vendors. By experimenting with approaches and analyzing data, SaaS vendors and partners can ensure that existing customers adapt successfully to the subscription model, even as improved resources, responsiveness, and ongoing customer contact continue to bring new business on board.

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Carl Theobald

President & CEO

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