With the pandemic accelerating cloud and digital adoption among businesses of all sizes, IT value-added resellers (VARs) and consulting firms are pressured to reinvent themselves as cloud-first organisations.
This demands that they transition to new commercial models and sales practices to keep pace with their customers’ evolving needs.
That’s according to PJ Bishop, vice-president: services for Africa and Middle East at Sage, who says forward-thinking IT resellers started a journey to position themselves in a market increasingly dominated by cloud and software as a service (SaaS) several years ago. Those that had not commenced this transition before the pandemic found themselves needing to pivot fast.
“Each reseller needs to relook its revenue models and skills to keep pace with the transition to the cloud. This will include expanding the focus beyond the initial sale to build customer value over a longer-term relationship and using metrics such as customer satisfaction and annual recurring revenue to measure performance,” says Bishop.
“Resellers will also need to find new ways to add value and differentiate themselves to recapture traditional revenues streams lost in the shift from software licence deals towards recurring, subscription-based revenues. Ways they could set themselves apart in the market include building new products or services or collaborating with other organisations to deliver complementary offerings and skills.”
Despite their status as tech companies, Bishop notes that IT resellers have traditionally relied heavily on face-to-face interactions to drive sales and the customer experience. But after social distancing and lockdowns forced buyers and sellers to go online, the customer journey in the B2B world is more digital than ever before – from awareness and consideration to purchase and post-sales.
Digital-led B2B customer experiences
“As such, most resellers are moving more of their customer support and engagement onto the web. Honing digital experiences should be a key focus in the months to come. Resellers need to become genuinely customer-centric, and they cannot do this unless they know and understand their customers. These days, this isn’t just about jumping on the phone or getting on the road to talk to customers,” says Bishop.
“It’s also about using data to understand what customers need and providing them with personalised, consistent experiences on their journeys across multiple touchpoints and channels. Resellers should be visible through all digital channels, including search and social rather than only on legacy billboards, newspapers or at events.”
Bishop says resellers are relevant in the cloud era because they are the human face of most vendors’ business, the first line of support, and an extended salesforce. Instead of cutting them out, the pivot to the cloud has created more opportunities for channel partners to add value. Sage, for one, still does most of its business through accountants, resellers and consulting partners.
Channel matters more than ever
Resellers have a significant role to play in the scale-up and mid-sized enterprise space. Companies in these sectors are becoming serious about using technologies such as automation and analytics to grow. To succeed in this segment, channel partners need to bring business consulting and technical skills to the party. Their customers want advice about digital transformation and enhancing their business process – plus the necessary competence to oversee implementation and integration.
“Even when using SaaS, customers still need objective advice, help with configuring or customising business solutions, and value-added services such as systems integration. To make an orderly transition to the SaaS world, channel partners should focus on retaining on-premises customers to fuel their emerging SaaS business. They can then focus on converting these customers to the new model and setting incentives to accelerate customer buy-in,” he adds.
Bishop’s final piece of advice is that resellers need to keep assessing whether their value proposition is still valid for the customers they serve. “They need to roll with the punches and take an agile approach to the go-to-market strategy. New ways of work and work-from-home policies are going to create different behaviours. Channel partners who listen to their customers and adopt a customer-centric approach, coupled with their agility to change the way they go to market, will thrive,” he adds.