referral partners, saas partner model, saas company

Partner and agent models are extremely profitable. Partner types like resellers and referral partners help companies get greater sales coverage in a less expensive and more efficient way than a direct sales model. But for SaaS companies, it can be more complicated. Among the disruptive ripples that SaaS made was the scrambling of traditional partner models. This is a result of many reseller partners not being able to handle the more supportive and relationship-based customer model required by SaaS products, technical roadblocks, and the constant product updates that a more agile subscription service has. So with all of this change, you may be asking . . . What does the partner model look like for SaaS moving forward?

The following are 4 changes that will impact the SaaS partner go-to-market strategy.

1. The position of ensuring customer success moves from the channel partner to the company

With the on-premise model partners took care of the technical implementation of a product but it was then up to the customers to facilitate their own success beyond that. With SaaS removing those technical barriers and instituting reoccurring revenue model, the emphasis is now on the continued building of a relationship and success of the end-customers. SaaS applications have allowed companies to become extremely agile which doesn’t align as well with the rigid reseller model. These partners aren’t necessarily focused on customers after the original sales and many are having trouble conforming to the new SaaS delivery model. These changes make it harder than ever to be successful as resellers and for SaaS companies to grow revenue from the partner channel.

Based on these challenges, more SaaS companies are moving customer success in-house.

Suggestion: Although current resellers and distributors may not be as effective as they once were, they are still in a position to increase your revenue generation and provide coverage. Try enabling them to submit targeted leads that are picked up by your sales team. They can then assist in the sales process and still be rewarded for their efforts. This is the referral partner model which allows you to maintain and increase sales coverage while delivering the customer support of a direct sales model.

2. SaaS companies will have a dedicated team to meet customers rising expectation

Another large factor for customer success moving in-house is the rising customer expectation that they expect their contact to fulfill. Resellers are becoming less dedicated and more polyamorous than ever before. They often don’t have the time or resources to provide that type of support that SaaS end-users need.

That means when something goes wonky as it always does in one instance or another a customer will require a quick to instant response time. Depending on the type of product and its role in a business it could impact a company’s success or stall its ability to move forward. This means that the fix needs to be applied as quickly as possible.

Suggestion: When a customer comes from a partner referral as opposed to being sold by a reseller it ensures a quicker response time since they don’t have to wait for the reseller to have enough time to contact the company, understand the solution & institute a fix. Try assigning a dedicated customer success rep to an account to ensure the providing of proper communication and information in a timely manner to help control the situation and fix the issue.

3. Agile product updates require continual training

One of the beauties and challenges for a SaaS company or product is that they can easily institute product updates quickly and seamlessly. This allows companies to provide more customized products and services while continually improving it. However, this also requires the continual training of resellers on the in-depth technology requirements, benefits, drawbacks, how to use it and how it can apply to different customer types.

This means that resellers need to be able to set time aside to continue to understand product updates at an expert level. This is the only way they can try to provide the consultative services that customers expect goes along with SaaS products and services. Unfortunately, many resellers don’t have the time to keep training or provide the consultative services that enable customers to benefit the most from using the product or service.

Suggestion: Instead of providing continual in-depth training as you would with the reseller model, the referral partner model allows you to update partners on new benefits, its capabilities, restrictions and uses in a succinct, high-level format. Try assigning a sales or success rep to update referral partners regularly so they can correctly relay the benefits to qualified leads but don’t have to have a deeper understanding to sell the product or ensure the success of product updates with customers.

4. More referral partners and less partner monogamy

While we have already said referral partners are an alternative route (and smoother route) for SaaS companies than other traditional partner models, we must take into account that partner monogamy is no longer reliable. As a channel account manager at a large company releasing their own SaaS product said in confidential interview, “You have to have a way to manage a partner that is there for just one deal and no more. Everything you’ve done before is kind of thrown out the window.” Expanding on this he explains that, “One day they might work on a deal with you and the next they will have moved onto a deal with someone else.”

Suggestion: A referral partner program can help manage and scale partner referrals while allowing SaaS companies to continue to expand coverage areas and generate revenue from the channel. Try implementing one to draw sustainable revenue growth from your partner ecosystem while removing the challenges that SaaS products and services create within the channel.

To understand referral partner program performance benchmarks from companies like yourself, download The State of Business Partner Referral Programs.