Channel Mechanics

Five Predictors of Success for SaaS Renewals through Partners

Are Your Partners a Good Fit For SaaS Renewals?

When Channel Mechanics was researching the issues companies face when transitioning their business to SaaS, we heard one problem loud and clear: “Our partners are uninterested, incompetent – or both!” Imagine. Partners who had been delivering revenue growth for the company –often for years– are now being viewed as problematic when it comes to SaaS Renewals!

Why?

The answer can usually be traced back to the vendor’s assumptions about channel selection for SaaS and SaaS renewals. With SaaS, we’re not talking about a new “product” or “line extension.” We’re talking instead about a completely different business model. Vendors who assume that all partners will adapt to this new model often find themselves frustrated, even at the risk of sabotaging their SaaS business early on. In addition, they are at risk of destroying the partner relationships they need for the long term.

The combined experiences of our leadership panel indicate that one or more of the problems vendors have with channel performance when it comes to SaaS renewals can be traced to poor channel selection. That’s why – ideally before you launch any SaaS initiative through partners, you need to take a step back and assess your probability of success.

 

Don’t Assume – Analyze!

The following five factors are excellent predictors of partner success, specifically for SaaS renewals. Taking your partner ecosystem though this analysis has multiple benefits. Firstly, it will give you a good idea where you stand. Secondly, it will help you determine the channel mix you need to meet your SaaS renewals targets. And finally, it will provide the insights you need to support and incentivize your partners effectively.

 

Five Predictors of Success for SaaS Renewals through Partners

 

1. Your Partner’s Presence to your SaaS Target Market

If your partners weren’t specifically chosen to “see” your target SaaS market, don’t assume that they do. Especially if your SaaS market is different from your traditional end-user profile. And don’t assume that they will automatically call on new customers because you have asked them to! Why? Because covering a new market is difficult – and costly – for partners. Therefore, it requires a sound reason – and business case – to support this decision which has implications for your partners’ top and bottom lines.

 

2. Your Partner’s Existing Relationships with SaaS Renewal Decision-Makers

Again, it’s dangerous to assume that the decision makers for SaaS renewals are the same as those for your traditional offers. Even though your partners may be “present” in your target SaaS accounts, they may not have the right SaaS relationships. If your goal is to optimize the value partners bring to your business, it’s best to identify and support those who already “see” the right decision makers. This saves you – and your partners – both time and money.

 

3. Your Partner’s Current Experience with SaaS

Partners who currently sell, and support SaaS solutions, are likely to be much more comfortable with renewals. Therefore, training and support costs for these partners should be very manageable.

 

4. Your Partner’s Integration Strategy

Partner’s who currently integrate your SaaS offer into a unique offer of their own, are far less vulnerable to competitive switch-outs. As such, they are far more likely to “protect” your expansion revenue.

 

5. Your Partner’s Current Ability to Close SaaS Renewals

Your partner’s current ability to close, can be assessed along a “complexity continuum” that may look like the following example:

Simple SaaS renewals, requiring accurate data capture and timely communications

Complex Saas renewals, requiring ability to generate complex quotes, ability to escalate and dynamic problem-solving

Strategic SaaS renewals, requiring account relationship management and negotiating skills, as well as competitive knowledge and positioning

 

SaaS Renewals

 

Once you’ve mapped out where your partners fall against these five predictors, you will be ready to design and support your ideal channel system for SaaS renewals. This in turn will enable you to give your regional account teams valuable guidance for implementation. You will be able to answer such questions as:

    1. Do I need to recruit new partners? If so, to what extent?  And where?
    2. For each target segment, what is the optimal mix of channels for the initial sale vs. expansions vs. renewals?
    3. What types of renewals can I assign to my partners right now?
    4. What kind of support do I need to provide to assure partner capability and skill?
    5. The type and level of “direct” support (ex. AE, customer success, etc.) that need to be involved?
    6. How do these answers vary by end-user segment and geographic region?
    7. How do these answers vary by key accounts?

 

For a full discussion, including team exercises on the topic of partner selection, you can refer to Channel Mechanics’ whitepaper:

 

“SaaS Sales Renewals – A Primer.” It’s the first in our three-part series:

“How to Engage the Channel for Successful SaaS Renewals.”

 

 


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