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XaaS Channel Optimization

Customer Success with Partners

5 min. read
By Anne McClelland
Technology vendors are grappling with the scalability of their customer success function to drive continuous customer engagement and reduce churn in their small and medium business market segments. Additional challenges include localization needs in driving adoption and consumption. In the past, partners have been the path to successfully deliver products to the emerging geographies, so why not use partners to extend your customer success function to those customers as well?
 

Customer Success for Partners

Technology companies have long relied upon partner channels to get products into the hands of customers. Consultants, value-added resellers, managed services providers, systems integrators, and distributors routinely recommend products to customers. But what happens after the initial sale? Who is making sure the product is being used correctly and that the customer is happy with their purchase? Who is tasked with driving adoption and consumption? When both the vendor and partner have a relationship to the customer, who manages this critical function, and how does everyone work together to help the customer reach their desired outcomes?
 

What is Customer Success?

Customer success is the practice of helping your customers achieve specific goals with your technology subscription offerings. It exists at the intersection where the business outcomes a customer hopes to achieve meets your offering’s capabilities.
 
Understand that customers today are not investing in new technology simply because it is new. They are looking for technology subscriptions and services that will solve specific business problems. You are promising the customer that you can solve their problem and the customer is investing in that promise.
 
If you make a promise like that, however, you had better be able to deliver. That’s where the customer success team comes into play. Customer success is responsible for ensuring your company fulfills on the promise to deliver the expected solution outcomes to the customer.  They are the value realization engine for your organization.
 
In most cases, the customer success team will work with the customers to make sure they completely understand your offering. They will also help the customers to integrate the offering into their business and encourage adoption throughout the customer’s organization.
 

The Importance of Customer Success to SaaS/XaaS Channel Optimization

Customer success has grown even more important in the as-a-Service context where revenue is built on subscriptions. If customers are not achieving expected outcomes with your offerings, they probably are not going to renew their subscriptions, nor will they spend more with you along the way.
 
When the customer success team achieves its goals, the result will be reduced customer churn and increased customer growth. The company will then enjoy the benefits of recurring revenue streams and can attempt to build upon those subscriptions via expansion.
 
Companies that are looking to expand and grow their business need to think about scaling their customer success function as well. One way to scale customer success capabilities is to leverage your community of partners.
 
Why? Research shows that approximately 75% of revenue in the technology industry comes from third-party channels. There is immense opportunity within the partner community if you manage those partnerships well.
 

Tips for Aligning Partners Around Customer Success

The relationships with partners in an SaaS/XaaS ecosystem are continuing to evolve, and it is clearly evident that these relationships are markedly different from the relationships and partner management requirements in the traditional sales models. TSIA surveys have repeatedly shown that partners respond well to vendors that are actively invested in the partner’s success. Empowering partners to be successful rather than “managing partners” is a key shift in the dynamics of the relationships between vendors and partners in SaaS/XaaS.
 
Partnerships in customer success can take different forms, but they all should involve the sharing of data, information, and tools. To make the most of your customer success partnerships, follow these tips:

Tip #1 – Educate Your Partners

This tip sounds like it should be fairly obvious – if you want a partner to do something, you need to train them on how to do it. Nevertheless, TSIA research revealed that only 30% of vendors provide direct training or certification in the area of customer success to partners.
 
Furthermore, the research shows the benefit of partner education. The companies that reported they provided training to partners also reported company growth rates that were twice as high as counterparts that did not provide training. Clearly, partner training pays off.
 
Take the time to make sure your partners understand how to help customers integrate your offerings into their business. This adoption is key to securing renewals for years to come.

Tip #2 – Avoid Competition Between Partners and the Vendor Team

Many senior leaders in technology companies are unaware of the pain that partner channel conflict causes and the potential negative impact to their and their partners’ businesses.
 
Ideally, technology companies can create clear roles by function and by customer segment and market for where the direct vendor resources will play vs. where partners will play. Additionally, the partners need to be clearly funneled through rules of engagement where they are able to engage in providing additional post-sales functions on behalf of the vendor in areas such as customer success.  
 
TSIA research upholds the recommendation to eliminate channel conflict. Businesses that cultivate individual “swim lanes” for partners enjoyed growth rates that were twice as high as companies with channel conflict.

Tip #3 – Share Your Customer Success Tools with Partners

The good news is that many partner-forward companies do show a willingness to share tools and technology with partners. TSIA research indicates that when companies share tools that enable partners’ customer success function to be more productive, this practice results in higher technology subscription revenue through partners.
 
Therefore why don’t more technology vendors seek to drive cooperation with their partners in the customer success function? TSIA research shows that the majority of companies do not share their customer success platform or materials with partners. Such misalignment is a missed opportunity.
 
Technology vendors need to be aware that there is much to gain by sharing offering adoption data with partners. Don’t forget that as the vendor, you have the most insight into the customer.

Depending on the offering, you will likely know:
  • How much capacity the customer is consuming vs. what they have purchased.
  • Which features and functions the customer is (and is not) using.
  • What user issues and problems the customer is encountering.
  • Renewal dates and other milestones including timing of significant offering updates which may impact other integrations.
All of this information is very valuable to your partners’ success, especially if you want the partners to drive adoption and expand subscriptions. Make sure you establish a system and procedures to share this information with partners in a timely fashion.
 
When the partners are unaligned in their customer success tools, information, and technology, the customer usually pays the price. If the partners are not aligned, the customer experience becomes inconsistent throughout the customer lifecycle. Such inconsistency can become a roadblock to achieving intended business outcomes. Remember, partners drive customer success.

Tip #4 – Choose the Right Partners

Understand that it’s unreasonable to expect your partners to fundamentally change their business plans to suit your company’s needs. Thus, it is a good idea to look for partners that already value and are delivering the customer success function and/or show willingness and aptitude to expand their capabilities in this area.
 
Ideally, you want channel partners who follow the LAER (Land, Adopt, Expand, Renew) customer engagement model. These partners are set up to land deals with customers that enable adoption and, eventually, expansion.
 
At the core of the adoption efforts in the LAER model is customer success. The partners discussing business outcomes in their presales motions with customers are setting themselves up for success in ensuring they deliver the customer’s preferred business results.
 

Partner Success = Customer Success

In the SaaS/XaaS environment, partners provide a vital link to land technology into the hands of customers. This relationship works best for all concerned parties – the vendor, the partner, and the customer – when there is a focus on customer success. The customer gets a product that solves a business problem. The partner gets a satisfied customer and the vendor has partners that act as force multipliers for their business going forward. 

 May 20, 2021

Anne M. McClelland

About Author Anne M. McClelland

Anne M. McClelland is the vice president of XaaS channel optimization research for TSIA. In this role, she works with closely with member companies to deliver research and advisory programs that help them optimize their channels to drive incremental revenue at scale for XaaS offerings. Throughout her career as a global partner and channels executive, Anne has built new partner organizations from the ground up, driven revenue from new partner communities, and launched programs and tools to support these partner efforts.

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