The past 12 months have seen an enormous uptake in cloud services, with more than ninety percent of UK businesses saying it played an important part in their response to COVID-19. Channel partners have adapted their business models accordingly – meaning big changes to how vendors engage, classify, incentivise and renumerate partners. So how has the shift to cloud and Software-as-a-Service (SaaS) changed how vendors measure partner success?
While the pandemic certainly accelerated its adoption, the shift to cloud and SaaS-based consumption models has been gaining traction for some time. As a result, vendors can no longer judge the worth of a partner relationship solely based on traditional revenue targets and thresholds. This is because these legacy metrics don’t measure the true impact of their partner ecosystems. Neither do they account for the new IT consumption models. Instead, alongside revenue targets, new metrics must now be incorporated.
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Indeed, the average number of metrics upon which a partner can be measured on is now five. However, it can easily go up to 10. Put simply, vendors are starting to measure partners’ influence on the entire buyer’s journey and not just the transaction.
The same applies to partner incentives. Even spiff (Sales Program Incentive Funds) programs have become inordinately more frequent and complex. Because SaaS has a longer lifecycle, the partner might get a spiff payment linked to deal registration. Following on from this, a top-off payment for a proof of concept (PoC) or a trial, and then an additional spiff for bringing the transaction to closure. Thereby incentivizing partners on the entire buying lifecycle of the deal.
But it’s not just a switch to services-based business models by traditional partners that is adding complexity. There is a new generation of partners that vendors must now accommodate in their channel programs. Categorized by Forrester as ‘the shadow channel’, this new ecosystem comprises digital agencies, cloud service brokers, third platform start-ups, digital system integrators, cloud players and consulting firms, which are all starting to offer IT solutions and services.
All these moving parts make things much more complicated for vendors when it comes to measuring their partners’ success. Keeping track of such varied and complex metrics can no longer be effectively undertaken via a spreadsheet, email or storing the relevant information hidden away in separate systems. In addition, it can be a hugely complicated task for partners to stay on top of targets and vendor expectations. This is especially the case if you consider that the average partner can work with between seven and 12 vendors, so staying compliant or on track within each program can be a full time job.
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Having a dashboard that provides a holistic, transparent view of all these metrics is crucial.
This can also be empowering for account managers, providing a new level of transparency and ease of doing business that benefits everyone. Account managers and partners can look at the dashboard together and see earning progress and other factors, such as how quickly they’re being paid.
Elsewhere, ensuring renewal information is available in a constant feed acts as a useful reminder for partners, particularly in the world of software-driven solutions and SaaS, where they need to keep on top of customers, number of seats, licenses or whatever it is up for renewal.
The influx of both new operating and consumption models and partner types brings new challenges and a huge amount of complexity for vendors when it comes to how they measure SaaS partners success. As such, automating the process becomes crucial.
Additionally, a partner’s ability to track their KPIs, see what they have earned, how much they still need to do to achieve their targets, and where they stand on training and certification, for example, is a huge motivator and will directly link back to business growth and success.
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