Growing Channel Partner Revenue: Part 1 – Policies and Processes


Channel Partner Management Strategies

Recurring revenue business models have changed the game for channel management strategies. Thinking differently about how your partners enable, engage and extend customer relationships is the key to growing channel partner revenue in the subscription economy.

Growing Existing Customers through Channel Partners

In my 30 years of helping channel partners grow their business, there’s been one constant — change. The channel organizations and partners that thrive are those that embrace and stay ahead of disruption. With increasing adoption of the cloud and the Internet of things (IoT), recurring revenue subscription models are no longer a “nice to have”. (This past week I attended a World Partner conference of more than 15,000 attendees in which “Cloud” was discussed in hundreds of thousands of conversations and perpetual license virtually none at all.)

The future is now. Embracing a cloud selling motion requires a new role for the channel. The question is: what skills, policies and processes will help your channel partners develop recurring revenue business practices that help them keep pace with change and grow business?

Part 1: Developing a channel partner revenue strategy

Your channel partners play a valuable role in extending your sales and reaching new markets. In fact, according to a recent ServiceSource study, "over 68 percent of North American technology companies’ revenue is sold through the channel and outside North America it’s well in excess of 80 percent". But many companies do not use the best policies and practices that channel partners need to drive retention and revenue growth from existing customers. Routinely, 10-20 percent of recurring revenue opportunities through partner channels will go unrealized—leaving money on the table and impacting your business growth.

To make cloud models profitable, you need a new approach to channel strategy: you need Revenue Lifecycle Management (RLM) to increase customer engagement and extension rates.

Customer churn and reduced renewal performance occurs due to factors such as:

  • Poor data quality
  • Inefficient systems
  • Lack of RLM optimized channel processes
  • Ineffective programs to incentivize channel engagement and extension efforts
  • Inability to measure partner retention and renewal performance

Routinely, 10-20 percent
of recurring revenue
opportunities through
partner channels will
go unrealized.

Companies that resolve these issues drive more channel partner revenue, increasing profitability while retaining and growing customer lifetime value. By making the renewals process easier for channel partners, they shift from having no accountability to proactively engaging, expanding and extending customers as part of their practice.

Evolving your channel partner strategies for recurring revenue

Channel partners have traditionally focused on new sales for products and services, not customer revenue growth after the sale – particularly as it relates to services. Your partners don’t always have enough resources, time or incentives to focus on selling plays after the initial sale, so they don’t invest in retention and renewal programs. Yet, in cloud models, renewals can account for approximately 40 percent of annual revenue and 80 percent of profit.

Business-to-business customers have recognized the compelling value that the cloud provides. Reducing friction points that slow their ability to quickly receive value and achieve measurable business outcomes from your products and services is a critical aspect of your channel strategy. Your partners must embrace their new role to not only land new customers, but also deliver value, drive consumption, expand wallet-share and renew subscriptions at the optimal price point.

Enhancing partner performance with best practice and processes

Successful renewal RLM programs require standardization, role specialization and dedicated support. To maximize recurring revenue, it is vital to have a plan of action that includes revenue lifecycle solutions.

Standardized processes are clear statements of the ‘what and how’ you and partners intend to deliver value throughout the customer lifecycle. With systematic processes, you’ll be able to…

  • Enhance channel partner revenue and performance
  • Motivate competition through your channel
  • Resolve issues in standardized form

Creating a strategic set of processes will drive performance objectives and increase partner productivity. Along this roadmap, companies must focus on the following three things:

  1. Early engagement
  2. Digitizing renewal campaigns
  3. Ensuring a higher percentage of on-time renewals

The best renewal results come from early customer engagement, supplemented with automated renewal campaigns. The goal is to make sure that both the partner and the client are up-to-date with their subscription information. Early engagement with your customers increases long-term customer satisfaction, and adding automated renewal campaigns provides reminders that document the renewals process. In addition, your internal teams must commit to regular partner engagement about customer health and offer sales assistance in order to support partners to meet critical deadlines and ultimately to help them to achieve maximum revenue opportunities. Proactive engagement with customers warrants a greater number of on-time renewals and increases customer loyalty.

Consistent policies promote efficient channel processes

Policies inform your processes and best practices. Enforce policies and motivate channel partners to engage in desired actions while setting desired goals. The implementation of consistent policies will help you and your partners execute the strategic processes identified above and accomplish your channel partner revenue goals. Clarified policies outline the responsibilities and act as guidelines for channel partner’s practices. Some policies for advancing channel management include: competitive pricing, incentives and enforced renewal targets. Applying consistent policies will motivate partners early and enhance partner’s overall revenue.

In my next blog, I will outline how to leverage your customer data, usage analytics and technology to drive these best practice processes to realize positive business outcome through your channel partners. Learn more about channel management solutions.


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Authored by Jack Johnson, Vice President, Senior Solution Strategist, Account Management for ServiceSource.
Jack has three decades of experience in building effective teams and best practice processes that drive exceptional recurring revenue results. He has experiences spanning HW, SW, SaaS, and Channel companies and has been on the front lines of the evolving economy for the past 30 years. In his role at ServiceSource, Jack is focused upon driving superior business outcomes for our clients as it relates to engaging the channel to revenue lifecycle value. In his spare time, Jack enjoys spending his time with his wife and triplet boys in Denver outdoors.