As businesses strive to optimize their customer acquisition and retention investments, the focus on developing a robust partner strategy has become paramount. In our article series, we explore the changing dynamics of channel partnerships in the industry before taking a closer look at how leveraging these partnerships can fuel better business growth, supported by some of our success cases.
Channel partners contribute significant revenue to major software and technology companies around the world. As many of them focus on improving their “land and expand” strategy to achieve a higher ROI on customer acquisition and retention investments, more and more companies are leveraging channel partners to boost sustainable growth and support each other to tackle market headwinds.
Why should companies work towards successful collaborations? In the first part of our blog series on partner strategies, we explain the benefits of improving strategic channel partnerships.
Why developing a sound partner strategy should be a priority
According to a Simon-Kucher study, the share of channel partner sales for leading tech companies was between 60 and 95 percent in 2020. For years, channel partners have been invaluable companions of software and technology companies. Even today there’s no doubt that taking partners on your sales journey will boost and sustain growth. But why now?
| Partner sales share | |
|---|---|
| Dell | 60% |
| NetSuite | 60% |
| Symantec | 70% |
| RedHat | 75% |
| Salesforce | 75% |
| Cisco | 80% |
| Microsoft | 95% |
The rush to the cloud – and what it means for sales and servicing
As more software providers switch their offer to software as a service (SaaS), they must also change the way they interact with their customers. Vendors are no longer focusing on one-off deals. Instead, they are strengthening relationships with customers and managing their success – adopting a “land and expand” strategy in the hope that they can extend more services to customers over time. Some say that the historic “sell and run” approach has been replaced by “sell and care.”
As a result, many sales teams are choosing to serve fewer customers with more intensity. And channel partners are an invaluable resource used to accelerate through many stages of the customer journey – through lead generation, onboarding, success management, adoption, renewal and beyond. This often means rethinking your partner strategy. Christof Majer, EVP Partner Ecosystem at Rillion comments:
“Just as software vendors have adapted to the SaaS and subscription world, the various partner channels and the partners’ relationships have to undergo significant adaptations as well. Customers seek different types of support from multiple partners (not only one trusted advisor only), and a partner’s solution competency has become paramount to customers. As a result, vendors have been shifting to establishing holistic partner ecosystems with specific partner competencies and ongoing partner enablement at the core of the vendors’ partner program design.”
Rising costs and the drive for efficiency
With costs rising, sales teams are urgently making more efficient choices, and focusing on customers with high customer lifetime value (CLTV) potential. Finding effective channel partnerships is a way of streamlining this strategy. Channel partners can strengthen a vendor’s footprint within non-focus markets or customer groups, so that software and technology companies can concentrate on highly strategic areas internally. This means that vendors can drive growth, despite limited internal resources.
Trusted channel partners help balance ambition with a high ongoing quality of service across the board, so companies can deliver in a more efficient way, without sacrificing customer satisfaction.
Expanding into global markets
One of the fastest ways to reach potentially relevant customers in international markets? Channel partners. Regional partners have teams on the ground where they’re needed, and are better placed to capitalize on local expertise. As a result, unfamiliar markets become familiar. And processes are managed in a way that works for each region, leading to better growth.
Embracing strategic channel partnerships
By embracing strategic channel partnerships, software and technology companies can navigate the changing landscape. These partnerships not only provide access to untapped markets and localized expertise but also enable organizations to optimize resources, streamline operations, and achieve sustainable growth.
But what is the ideal approach to take to develop a successful partner strategy? And how do these strategic approaches look like in practice? Stay tuned for more insights on optimizing channel partnerships and some of our recent success cases.
