Today’s software-driven economy has significantly disrupted the traditional IT channel. No longer dependent on selling hardware with built-in software and maintenance contracts, the environment is now all about as-a-service solutions that are much more dynamic in nature.
By Louise Taute, marketing director at Westcon-Comstor Sub-Saharan Africa
Traditional transactional customer relationships have become ongoing, while ordering and sales processes have become simplified and automated. Products are delivered and provisioned remotely, and support has become proactive as customer telemetry is monitored and issues are resolved before they cause downtime.
While the subscription model guarantees recurring revenue, it also empowers customers to switch or discard solutions quickly if they do not see the measurable value. This has prompted the channel to pivot towards delivering the customer’s desired business outcomes using a solution, not just once but consistently throughout its lifetime. This is the basic premise of customer success and is a proven approach for improving retention.
Shifting to such an outcome-based business model requires a new mindset and approach. Partners must change focus from landing the initial sale to nurturing long-term customer relationships. This requires a deep understanding of the customer journey and data and analytics to enhance the customer experience.
Distributors have a vital role in ensuring vendors meet their goals and partners have new capabilities to enable customer success. Therefore, distributors need to empower their channel partners with new skills and opportunities to increase customer satisfaction, create recurring revenue and profitability. This is where solution lifecycle management becomes fundamental to the channel’s success in today’s as-a-service environment.
Solution lifecycle management
As the name suggests, solution lifecycle management encompasses several milestones where partners can support customers and create more value from their relationships. These can be broken down as configure, price, and quote; purchasing and billing; adopt and consume; expand; renew and re-sign; and a tech refresh.
It all starts with optimising sales processes. Nothing erodes customer relationships faster than if these are sluggish or inaccurate. Software can be configured with many different options, making the quoting process complex and time-consuming. This is where configure, price, and quote tools that provide accurate pricing with any given product configuration are essential. Partners can speed up their quote-to-sale cycle and build advocacy and trust with end customers by streamlining this process.
Secondly, the purchasing and billing stage of lifecycle management is often overlooked. But this presents an excellent opportunity for partners to enhance the customer experience at an early stage. Digital purchasing and billing platforms can help boost customer satisfaction and set the tone for future relationships. Innovative distributors who adopt integrated tools that allow customers to ‘pay as they use’ for multi-year subscriptions walk out the winners. These tools remove the delays, complexity, and administrative burden of dealing with separate financing companies. Customers want convenience and choice. Vendors and partners who offer them will boost customer loyalty and retention.
The third milestone is that of adopting and consuming a solution. After all, the wider and faster the adoption of a solution, the more likely a customer is to retain and renew it. The right adoption strategy is, therefore, key to growth. Customers who use a solution and see its value are likely to buy more and be more receptive to complementary solutions. Solution lifecycle management helps partners attain and analyse their customer health scores and solution telemetry to determine how fully a solution has been adopted. Partners who focus on adoption post-sale will align technology to their customers’ business outcomes, maximise customer lifetime value, and increase customer and revenue retention.
Taking the next step
The second half of the milestones begin with expansion. Expanding a successfully adopted solution will drive better business outcomes for the customer. This can take the form of increasing licences for a single solution or adding new solutions that create additional value. The solution lifecycle management approach provides clear expansion opportunities for further business within an installed base. It gives a clear view of solution gaps and opportunities for new solutions or feature add-ons to complement the current deployment.
Up next is proactive renewals that help ensure service continuity. This management of renewals will extend the customer relationship and reduce risks. Missed or late renewals erode customer trust. Distributors with innovative platforms that can help partners manage their renewals and quoting from within the platform will present a significant competitive advantage.
And finally, a technology refresh that offers the latest innovation becomes a crucial component to complete the solution lifecycle management. Running legacy equipment that is no longer supported leaves the customer at risk of security breaches and operational inefficiencies. Partners can proactively manage the design, planning, and implementation of replacement solutions through awareness and preparation and bring innovation through the latest technology.
However, such a refresh is not reserved only for end-of-life products but can be successfully initiated when a customer reaches a renewal anniversary. As customer needs change regularly, ensuring an existing deployment is still fulfilling its purpose is essential. A refresh provides partners with the opportunity to extend the customer relationship for another solution lifecycle, maximising the customer lifetime value and improving retention.
Therefore, the channel value chain must embrace this fundamental change and become more adaptive to today’s digitally driven customer needs.