I attended Sales 2.0 Conference last week and a mid-tier Microsoft partner explained how his company has used Twitter, Facebook and Linked to drive new revenue. Revenue that was not only important for the VAR but ALSO led to significant incremental, new revenue for Microsoft. This was a surprise for the VAR and Microsoft. The Microsoft team took note and the new revenue was one of several factors that Microsoft identified why Microsoft named the VAR Regional Partner of the Year.
Large(er) companies like Microsoft have some challenges with the speed with which they can deploy Social Networking tools by its employees for business purposes. There are number of thorny processes and procedures that (naturally get in the way – but note, that Dell and Apple established communities of the 3 ‘majors’ of the Social Networking Tools’).
Company privacy policies, security and the overriding need to protect the company’s brand have delayed (I wouldn’t say permanently) but definitely postponed the company’s ability to quickly leverage the value of Social Networking tools for lead generation and nurturing processes. In this case, the VAR (albeit much smaller) was able to rapidly and deftly leverage these tools to create and nurture relationships that were not known to them before. The relationships pushed new opportunities into the pipeline and ultimately realized revenue for the VAR and Microsoft.
So, if you are a partner with any ISV, hardware vendor, you may want to take a second look at even a modest investment of time (these solutions are free) and give some thought what it might take you down the path to be Partner of the Year.
I was meeting with a group of high powered, highly successful VPs of Sales yesterday and we were discussing the SaaS partner model (as it is).
Several colleagues have built their careers in the semiconductor business and were astounded to learn the most SaaS vendors do NOT provide any revenue to the partner in the second or third (or beyond) renewal cycles. They were further shocked to learn that the initial compensation of a mere 10% or 12% as the partners’ referral fee covering the initial sale was astoundingly low, but felt better (somewhat) after a better understanding of SaaS business model cost structure.
In the on-premise world, VARS and resellers provide value by taking on some of the financial risk of invoicing, logistics and deployment. They are typically compensated by a margin on the sales deal and as much as 10% additional discount, to provide 1st level customer support. It’s a common perception in the industry that the partners take the additional Customer Support 10% discount as additional margin and don’t invest in customer support training or tools — they just take the cash.
SaaS vendors have taken both back in house (1st level of support and the cash). But vendors often struggle when it comes time for the SaaS customer to renew the contract: Who Owns the Customer? The vendor? Or the partner?
The big SaaS CRM vendors struggle with this issue and it has created quite a bit of tension between vendors and partners. Here are some discussion points to help answer the question:
- Vendors: vendors need to think about what life would be like when a SaaS customer is threatening not to renew and avoid asking the partner at the possible moment and as a last resort ‘ what can the partner do to save the account’?
- Partners: In the SaaS world partners need to think about investing MORE up front in the SaaS vendor’s technology and take the high road: vendors can benefit from the vast knowledge of best practices of what customers really need to optimize the benefits which will in turn make renewals automatic (well almost).
I saw that SuccessFactors recently RE-subsribed to Salesforce. They WERE a Salesforce customer up until and through their 2007 IPO. Then the rumor mill started and it broadcasted that SuccessFactors was not happy with Salesforce (read between the lines here) and opted not to renew. Instead, SuccesFactors ‘jumped ship’ and went over to the Dark Side of Siebel on Demand. Fast forward 18 months and Salesforce has REPLACED Oracle/Siebel!
In the on premise world this wouldn’t have been possible. The deployment of a robust CRM solution would have taken 9 months alone and at least another 6 months to identify some modicum of improved productivity. The fact that SuccessFactors could unplug, plugin and unplug and plugin (yet again!) a solution that was running a very large data set and was probably a key, if not mission critical, asset to ensure day-to-day operations.
The fact that a large company, some ($111m in sales) could decide to do so and continue uninterrupted operations is quite amazing. (I’m sure thought the Marketing and Sales Operations teams are sporting the shaved head look any hair after tearing it all out) Most importantly, the ability of a company to steer its destiny in a SaaS world is testament to the fact that SaaS has matured (at least to this level).
http://blogs.zdnet.com/BTL/?p=23045
