Webinar - Driving Subscription Upsell and Cross-Sell Through Channel Partners
We received multiple questions during today's live webinar that @Anne McClelland and I didn't have time to answer. We will be posting our answers to those questions here, and of course gladly welcome new questions as well.
If you missed today's live webinar, simply click the link below and you will be able to listen to the on-demand version at 2pm PT.
Comments
-
Thanks for sharing @Steve Frost. Interesting insights you shared and looking forward to seeing the Q&A responses when available.
0 -
Question 1 from Keith: To confirm, you mean capability training. You mean technical training on how to use the product?
Answer from @Anne McClelland - Great question, Keith. Although both sales training and technical training are extremely important, and especially around your XaaS offers, what @Steve Frost and I are referring to when we say Capability training and certification / evaluation, is around the lifecycle customer sales skills for the subscription models. Training around the capabilities of areas such as Customer Success, Renewals specialists, driving monetization of the Customer Success function, etc.
1 -
Question 2 from Scott: The tasks and responsibilities you are espousing here (such as explaining customer success methods to partners) do the best companies have the PARTNER team or CHANNEL team do these things or other core parts of your organization who own the specific function, lead the way?
Answer from @Anne McClelland - What I have seen work well is that the function of, say in this example, Customer Success at the vendor company be specifically given the responsibility to enable, train and mentor the partners in developing out their own Customer Success functions at the partner companies. Now, knowing that some partners are critical to a vendor's business (i.e., in your top 10-20% of partners driving your revenue), you will give them more hand-holding and high touch assistance, whereas for the long tail of partners who are driving less revenue / traction for you, you will need more programmatic support and self-serve ways to engage them. I'll also as @Phil Nanus, our VP of Customer Success Research to chime in as well...
1 -
Question 3 from Jason that @Steve Frost and I addressed in the webinar, but we can add on here: Our company is transitioning from an annual based service renewal to a subscription based. What is the best way to transition to this model with our partners? Should we grandfather in existing customers in this format and just have new customers be XaaS subscription model?
Answer from @Anne McClelland - You definitely want to be very planful regarding how to migrate your existing customer base, because protecting that install base from potential competitors during a platform migration is paramount. I recommend you do that separately as a strategy and there are likely some ways you can segment that install base to create "flavors of migration plans" and stage timing based on their profiles. On the point of engaging your partners to move to your new subscription based model, there are many dials you can "turn" including driving the coolest feature / function enrichment in your subscription offers, giving the partners additional training, tools and incentives as well as spifs to encourage them to move and engage new customers for you on the new subscription offers. @Steve Frost feel free to chime in here!
0 -
Question 4 from Adam: Adam is from New Zealand - Thank you for staying up in the middle of the night to join the webinar live!
Here is his first question - It would be great if you could provide specific resources or books from Geoff Moore who you mentioned (in this webinar) to help people with their Go to Market strategy.
Answer to his first question - The Geoff Moore book is Zone to Win: https://www.amazon.com/Zone-Win-Organizing-Compete-Disruption/dp/1682302113/ref=sr_1_1?dchild=1&keywords=zone+to+win&qid=1607024437&s=books&sr=1-1 and Geoff Moore presented at the Technology & Services World conference in 2017. Here is the link to his keynote for you to review: https://youtu.be/FsV_cqde7w8. The other important framework to think about with this transition to this new GTM is McKinsey's 3 Horizons and in Geoff's presentation he refers to how difficult it is for companies to make it successfully through Horizon 2. Really good stuff!
Adam had a second question which is: What are the Pros and Cons of direct to market as well as through channel model benefits of having an affiliate model where the software company transacts directly and manages customer lifecycle and transaction vs. channel partner purchasing licenses and selling through.
Great question, Adam! There are an awful lot of variables to sift through in order to make these decisions, and it is is highly complex because the answer will vary by customer segment (large, global enterprise customers vs. small customers), by geography (where you have direct ability to deliver vs. where you do not for various reasons), by the integration needs of the solution, where an intermediary such as a partner can aggregate component offers together prior to customer delivery, those just to name a few. You should take an assessment with your subscription / consumption offer of where you plan to (meaning the technology vendor) work with your customers directly vs. where there are clear places that you need help from others across all of LAER, (and again, there are loads of variables about those decisions), and then what do you need partners to DO for you, in order to meet your financial goals and also their financial goals (this is key that you have an attractive proposal for them as well). Most companies do "both" - go direct in some cases for some reasons and sell through in some cases for some reasons.
0 -
Question 5 from Anjana: How do you evolve a channel strategy from classic on prem sales to a cloud as-a-service model? What kind of discounts and incentive strategy would you recommend? If a vendor has a large number of partners, how do you distribute the leads across them?
Answer: First of all, as @Steve Frost covered in his slides, the offering has to be a cloud as-a-service offering (vs. an on prem traditional offering) then the go-to-market and the partner channel ecosystem strategy can be developed to complement that offering. Then you can design the go-to-market. Its about setting discounts and incentives up front as much as it is determining what roles the partners will play across Land - Adopt - Expand - Renew, then determining how to drive and encourage them to play those roles. I do have research around what pacesetters in as-a-service are using for their discounts on both land sales and expand sales.
When it comes to distributing leads among the partners, in this scenario, it sounds like you are assuming as the vendor are receiving all the leads in bound directly. Ideally, you would have segmented your market and your partner ecosystem to best engage the right partner with the right customer opportunity where they are good fits for one another to take the opportunity from lead to close. However, as you likely realize, partners like to own customer relationships, and if you can segment the territories that they can own so that they can go after customers and build solutions that include your offerings and then engage you (the vendor) to fulfill the customers' needs that will allow them to drive their independent businesses.
0 -
Question 6 from Regan: A lot of the references are about resell. How does LAER apply by different partner types: GSIs, MSPs, Cloud Providers?
Great question, Regan! I am doing some work on the individual partner types and how they are evolving under the as-a-Service transformation we are all seeing in the marketplace. Some of my resources are for members only, but I can point you to my conference presentation and prework for TSIA Interact this past October around Partner Models for an XaaS World: https://www.tsia.com/App/UI/Viewfile.aspx?id=1&sessionid=1007 and my recent blog: https://www.tsia.com/blog/partner-models-for-an-xaas-saas-world which includes the results of the polls used during that session at the conference. I am working on some member only content around the evolution of the different partner types, because the partners who are going to be around in the future after all the dust settles are the ones who will evolve into new "life forms" because the world is changing and they have to as well.
0 -
Question 7 from Nellie: Do you see compensation for partner managers changing in XaaS business models?
The interesting thing about comp models is I can go from company to company and see different comp models in each company for partner managers. The "old" comp model that is based purely on a Disti - Reseller model where the partner account manager is paid for the revenue that is coming through their reseller partner (whether they be a Disti or a VAR) against their annual quota that is set based on history and the annual quota increase sent down from "on high" is certainly the old school way of comp-ing partner account managers.
Partner account managers are more likely to see comp shifts that look more like a version of a mixture of sales / revenue comp for part of their variable comp that is aligned to a region or global sales number with less ability to "nail down" what exactly their partners really are influencing or driving under XaaS, especially as the partner channel ecosystem is getting its legs under it for this part of your business. And then the remainder of the variable comp based upon MBOs that are set to achieve specific goals and objectives within the business or the transformation the partners need to make in driving new motions (such as customer success or growing customer lifetime value).
Of course, sales operations hates the squishy influence incentive plans because anyone on any type of quota / upside quarterly plan has to have guard rails to assure that plans are following rules, etc. to be fair across the board. Caps help for sure for revenue upside and a higher base with less risk for these plans are typical. These folks have to be both tactical (driving quarter to quarter improvement of partners driving / influencing revenue) however also have to be strategic (driving behaviors that will be needed 18 - 24 months from now) as well. It makes the Partner Account Managers role even harder than it used to be when they could all manage by spreadsheet.
1 -
Hi, Keith. Anne did such a great job of answering, but I wanted to follow up. Capabilities are the people. processes and technology required to get something done. So it's DEFINITELY not just offer training or product training. It's enabling the partner to know not just how, but WHEN and WHY to sell your offering. Hope that helps.
0 -
As I said on the webinar, you can't just put your new customers on the XaaS offering and keep existing customers on the legacy offer. That's a losing formula. Remember your competitors are trying to sell their XaaS offers to your customers, with an emphasis on simplicity/features/cost of ownership, etc. You have to be able to make the same arguments, not just direct but through partners.
0 -
One quick add to Anne's comments. Providing leads to partners needs to be a proactive motion, and the tighter you can tie into their systems and processes (CRM) the better. Don't expect partners to look for the leads on their own. One really good strategy for segmenting and distributing the leads is to sort by vertical. Partners will develop expertise in one area, but it's hard to develop solutions for multiple verticals (at least right away)
0
