Today, technology resellers, independent software vendors (ISVs) and systems integrators face a sophisticated mid-market customer who is spoiled for choice. They are operating in a space where eCommerce has commoditised products and solutions that were once their bread and butter; what’s more, many of their customers are now looking to buy IT solutions and infrastructure in as-a-service models.
A shift towards consumption-based IT, along with the increasingly complex world in which small to medium-sized businesses (SMBs) operate, mean we will not be able to keep selling technology products and services in the old ways. Instead, SMB customers increasingly expect channel partners to offer them business outcomes on a shared risk and value model.
In the past, technology companies could generate revenue by selling portfolios of products, services and solutions to SMBs. Once the deal was signed, they would get paid even if the solution did not deliver the value or outcomes the customer was expecting. In many cases, the customer would be left to figure out for themselves how to get ROI from the solution.
That model is changing rapidly in a world where IT is moving from a capex model to subscription billing. If the customer doesn’t get the results they’re expecting from a solution, they can cancel the subscription. The technology channel is now under pressure to not only get the customer on board, but keep them there. We need to convince customers to renew every year or even every month by proving our value.
In this world, customer success is becoming the single biggest driver of technology reseller or vendor success. The concept of customer success flips the idea of demand generation on its head. Rather than trying to convince the customer to buy a product, we need to first understand what they need to be successful—and then work with them to achieve their objectives.
Customer success isn’t to be confused with customer service or support—it’s a proactive, relationship-based philosophy that focuses on helping the customer reach their goals with the company’s product or service. Whereas we used to measure success by sales, customer success is reflected in metrics such as customer lifetime value, customer retention rate, and repeat purchase rate.
Customer success is an established idea in the software-as-a-service (SaaS) arena, but most traditional resellers have yet to fully embrace the concept. Perhaps one of the largest challenges resellers face on this journey is that most don’t have all the capabilities to deliver ‘customer success’ for SMBs in complex digitalisation programmes.
SaaS is the trailblazer
Again, the SaaS world shows the way. Many SaaS companies thrive through their partnerships with other ISVs and platform companies. An eCommerce SaaS provider, for example, will make space for third-party payments providers on its solution, or integrate its offering with a bigger platform like Salesforce. The end goal is to give the customer what they need to thrive.
Moving to this world is by no means easy. There are difficult questions to consider around partner governance and risk management, for example. Ownership of the customer relationship and intellectual property are key considerations. But the resellers who are starting to figure these things out will be the ones who will be best placed to thrive in a changing world.
"At Tarsus, we are striving to create a value system that helps our channel partners and their customers accelerate their digital transformations. By facilitating connections between partners that may not have otherwise found each other, we aim to help them grow. We believe cooperation across company borders is key to driving customer success—and the success of our partners in the value chain."