Valuable Tips For Moving From A Traditional Channel Model To A SaaS Partner Program
Transitioning the channel to the cloud and SaaS subscriptions is still a massive challenge. This week’s episode features Jeff Mattan, a channel veteran who has extensive experience in this channel transformation. Over the course of his channel careers, Jeff has worked with telco agents, MSPs, and IT Solution Providers as a supplier of telco services, networking, and now security solutions.
We talk about channel convergence, the pros and cons of different channel models, and how SaaS vendors can reduce partner disruption. And Jeff provides valuable tips on how to develop a SaaS Partner Program that will attract the right partners who provide the right services to drive greater customer success and accelerate revenue growth.
SaaS Partner Program Tips
- For SaaS companies selling directly to customers and paying a monthly recurring commission to the partner who makes the sale fits very well with telco agents who are used to that model. However, it is a massive disruption to most MSPs and Resellers who are used to billing the customer. They want the control of owning the customer and are reluctant to accept the referral-for-commission model.
- The downside or limitation of the agent model is that agents aren’t staffed or equipped to do product adoption and integrations services that will increase customer success and reduce churn.
- Adding a channel model where the partner can do the billing will open the doors to MSPs and Resellers who can provide additional services and integrations.
- The subscription model is still a change for the traditional reseller used to selling large deals. Show them that you understand the cashflow struggle of moving from a large transaction perpetual license to smaller transaction subscription model.
- Paying the partner in perpetuity on a subscription may seem expensive and unwarranted, but you have to match what your competitors are doing or you’re going to lose your partners. Instead, look at your sales process and make it easier to buy your product to reduce costs.
Other Partner Program Tips
- If you have a tier-based Partner Program, promote partners to higher tier at least every quarter instead of waiting to end of year, otherwise partners may hold deals until next year to get the added benefits of higher tier.
- Be incredibly honest with partners about what types of products and services will be profitable for the partner and which won’t. Let them know it’s not just you or them, the whole market is shifting.
- When building your program, lay out the entire customer journey, from influence and buying to provisioning and implementing. Break it into stages to find what’s valuable, who can do it, can the partner make money doing it. Could give you room to reduce residuals if partner can make more money on the services around your product.
- Depending on your product and target customer, consider adding a referral program, a residual commission program, and a reseller program to your Partner Program to offer the most flexibility and attractiveness to a wide variety of partner types.
- It takes a lot of work to develop a comprehensive Partner Program that is at the same time simple for the partner and makes you easy to work with. But all that upfront work will be worth it.
- Reevaluate your partner program in relationship to the customer journey and your channel’s role at least once a year.
- You have to really spend time and energy in hand-to-hand relationships with your clients to ask the hard questions and make sure that what you’re hearing is genuine interest that translates into a path to creating economic value for that audience and revenue for your company.