In our complementary TSW 2016 XaaS presentation and article, we talked about Creating Differentiated Field Service Offers for XaaS. In this article we talk about engaging your channel partners to extend your capabilities to reach more customers.
From our perspective, the place to begin is with the recognition that the shift to “as a Service” is not simply a change in product pricing. It is a change in the nature of the offering. It is a shift from a product offering with necessary services attached to a service offering with a product as its engine. This is a shift in mindset both for you and your channel partners.
To assess the degree to which your channel partners are engaged, we suggest you ask yourself these questions:
- Do your channel partners have a stake in the success of your support services revenue beyond simple discounts to them on those services (i.e. a certain margin level)?
- Does your broader channel program have specific channel services components as part of it that focus on services that can be extended through specific partner sets on your paper or theirs (including your essential and value added services – or a partner’s value added services)?
- Is your channel and/or channel services program segmented by and aligned with the value that specific sets of partners bring to your product and services portfolio and that customer segments seek from your and/or your partners?
- Does your channel / services channel program currently have success metrics beyond simply revenue and/or margin goals? (E.g. CSAT (of the Partner and you), Net Promoter (of the Partner and you), services attach rates, services renewal rates, first call closure rate (for partner provided services – yours or theirs), total case closure % rate vs. escalation % rate to you (for partner provided services – yours or theirs)?
- Have you defined or looked at defining certain services that may be moved from your services portfolio (essential or VAS) that can be more cost effectively provided via specific segments of your partners (either in whole, or in part, i.e. partner provides L1 & L2 levels and then escalates to you)?
If your answer is no to more than one of the above questions you then need to start looking closely at how you can answer yes to more, if not all of them. Simply stated in the XaaS world, you need to create a segmented channel services ecosystem that incentives partners for services revenue growth, customer success, customer satisfaction (with the partner and you) and holds them accountable with a well-defined set of metrics in a scorecard format that is reviewed regularly with those partners. This channel services partner segmentation should align with your overall pricing segmentation. Some partners, of necessity, will be excluded from your program. Selling through all channels increases channel can petition and negatively impacts price capture.