As we continue to move into a digital age in which individuals are comfortable researching and buying online, a transition accelerated by the Coronavirus pandemic, the buying journey has become non-linear. A potential customer may read a review, ask a friend, then browse the web before ultimately purchasing online (without consulting any sales professionals or entering a store).
Along with the shift to a non-linear buying journey, there’s also a shift in how business buyers want to buy. Aligning with how consumers are shifting to subscription models for practically everything, business buyers are moving away from large capital expenditures to more flexible “buy what you need” subscription or consumption offerings.
In a subscription or consumption model the channel can provide value in a multitude of ways, but let's focus on three. Vendors, consider adding the following to your partner engagement frameworks:
1. Incent partners focused on producing customer outcomes.
Customers want technology solutions to produce outcomes for their business. For example, customers don’t buy standalone antivirus software – they’re looking for a solution to provide authentication and protection against theft of sensitive data and information. On average, there are 7 products in this technology solution.
Partners have the difficult task of putting those 7 products together in a full solution that addresses the customer’s business needs and produces an outcome. This often starts very early in the customer’s non-linear buying journey – when they are identifying a pain point or business need – even before they know whether a technology solution might address the concern.
Vendors can ensure the solution produces the expected outcomes by engaging and empowering partners who provide advice and consulting, which influences the customer’s next steps in the buying journey. This changes the types of incentives now being offered by the vendors. Vendors are increasingly rewarding behavior instead of, or in addition to, the transaction.
2. Reward partners engaged in driving adoption.
As we move to subscription and consumption-based business, the KPIs we’ve used for decades must shift. The measure of success for subscription models is adoption: are the customers using the solution? They may have signed for their first 30-days, but if they’re not using the technology, it’s coming back to you. Increasingly, we are seeing roles such as Customer Success Manager and Subscription Manager moving from the rare to the norm.
Partners drive adoption of the technology by developing new business processes for the customer during the solution implementation phase. Since they are deeply engrained in day-to-day interactions with the customer, partners are well-positioned to measure who is (and who is not) using the technology and which features are used. They understand the customer’s business and can provide training specific to the customer’s business practices, overall solution and expected business outcomes.
Vendors can also enable and incent partners to be successful in driving adoption. Empowering partners to perform customer training and providing them with business process knowledge around the solution creates a win for the customer (outcome), a win for the vendor (usage) and a win for the partner (services margin).
3. Include and empower partners to secure the renewal.
More companies are realizing renewal is the key to overall growth and success and renewal only happens if the customer sees significant value. A customer isn’t going to renew the subscription if they’re not using the technology and seeing the results in the anticipated outcomes.
If the customer has engaged a partner for advice on a technology solution to meet the business outcome and/or change business processes and policies, these partners are in a key position to secure the renewal – and possibly increase the number of licenses. Solution providers of all types, be they consultants, agencies, service providers or resellers, are often viewed as trusted advisors to the customer. These ongoing, regular touch points are a natural way for the partner to pursue the renewal.
There is a lot of arguing going on whether solution providers should be in the renewal conversation – or if that’s better left to the vendor. At PartnerPath, we say if the first step, setting up the outcome, was done correctly and a partner was involved in helping the customer adopt/use the solution – then it’s a no brainer that the renewal should come through the channel. Once again, the vendor can ensure a win-win-win through enablement and incentives. The vendor can provide telemetry data on usage, notification of the end of the term and financial incentives to the partner to bring the renewal in on time – and more for growing the number of licenses. Partners also view recurring revenue important to their success and growth as a company and are looking to vendors to provide programs to drive that recurring revenue.
These three actions all tie together into the bigger picture of moving past the transaction to investing in customer success. First, establish what success will look like through consulting and advice services. What outcomes is the customer expecting to produce with the technology solution? Second, ensure adoption through integration, process re-engineering, usage and optimization. Finally, secure the renewal and expansion since the customer has realized the promised value of the purchase.
As we move ever faster to the cloud and recurring revenue models, the channel is not less valuable. But rather, it is valuable in new and unique ways. Are you ready to engage partners in a subscription model? Take our Cloud Quiz to find out or schedule a call with Diane today to chat more about your partner program needs.