In the ever-evolving tech landscape, familiar terms like “mouse,” “cloud,” and “virus” have taken on new meanings. With the rise of XaaS (anything-as-a-service) and subscription-based models, we’re witnessing another shift in language.

Partner success is no longer just about having successful partners. It’s becoming crucial in delivering XaaS and implementing the LAER (land, adopt, expand, renew) model. TSIA defines partner success as “Enabling partners to maximize profitability by delivering business outcomes for customers.”

But what does partner success mean to you? Technology vendors interpret it in various ways. In this blog, we’ll dive into these perspectives and highlight what companies at the forefront of partner success are doing right.

This blog will explore:

• Understanding and Implementing Partner Success for XaaS Growth
• Why Partner Profitability Is Key
• Growing Through Partner Enablement
• Strengthening Partner Loyalty
• The Future of Partner Success
• Your Key Takeaways
  

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Understanding and Implementing Partner Success for XaaS Growth

Customer success once simply described successful customers. Today, it represents:

• A professional role (customer success manager)
• A department (customer success organization)
• A corporate philosophy
  

At its core, customer success is about helping your customers achieve their business outcomes. Similarly, the partner success function is evolving and becoming vital in your XaaS journey with channel partners.

Basic Level: Traditional Partner Management

Traditional partner management roles are being rebranded as partner success at the primary level. These efforts, while well-intentioned, often don’t stray far from the traditional partner program, which typically includes:

• Tools
• Training
• Certifications
• Incentives
• Enablement
  

Critical Elements of Traditional Partner Programs:

• Partner enablement: Sales playbooks, marketing materials, online portals, and search tools
• Training and resources: Sales training, webinars, technical resources, and certifications for roles like architect, data analyst, and solution engineer
  

In these scenarios, partner success is often just a buzzword, with the highest-performing partners generating the most transaction revenue.

Middle Level: Customer-Focused Partner Success

In the middle of the spectrum, partner success focuses on the customer. As your business moves from a transaction-based to a subscription-based model, investing in customer success becomes essential to support the entire customer life cycle. However, with an indirect selling model, you face the challenge of delivering LAER (land, adopt, expand, renew) through your channel.

Challenges at the Middle Level:

• Capabilities gap: While some top partners can deliver business outcomes, formalized enablement, incentives, and resources often need to be improved.
• Partial functions: Partners drive land and renewals, while the adopt and expand functions are handled directly by you.
  

Considerations:

• Channel partners excel in closing deals and renewing contracts.
• Developing new skills for customer success is a natural evolution for technology vendors transitioning to XaaS.
• The headcount required to deliver, adopt, and expand at scale is a looming fiscal challenge.

Progressive Level: Comprehensive Partner Success

At the most progressive end, partner success means enabling your channel to deliver business outcomes for customers while enhancing partners’ financial health.

Developing a Comprehensive Partner Program:

• Value exchange: Offering partners a compelling value exchange.
• Focus areas: Growth, loyalty, and profitability.
  

Critical Elements:

• Growth: Partners must grow to stay financially healthy.
• Loyalty: Partners need to remain loyal during tough times.
• Profitability: Partners’ businesses must be profitable to stay open.
  

With the rise of new XaaS vendors, partners have more choices, making it crucial for your channel partner programs to nurture profitability, growth, and loyalty.

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Related: The Power of Partnership 

Why Partner Profitability Is Key

Regarding indirect selling models, your partner’s profitability is crucial. Successful XaaS channel partner programs make your partners profitable through financial incentives and partner-branded services revenue. Programs that fail to ensure partner profitability are ultimately unsustainable.

Financial Incentives and Services Revenue

• Financial incentives: These are designed to drive ‌desired behavior among your partners. Unlike traditional partner programs that reward partners for closing transactions, modern XaaS channel partner programs reward partners for managing the entire life cycle of a subscription and ensuring customer health.
• Services revenue: Partner-branded services revenue is a critical success factor that can significantly boost partner profitability. This includes potential pull-through services that wrap around your XaaS. 
  

The New Desired Behavior

For XaaS partners, the goal is twofold:

• Sell recurring revenue: Encourage your partners to generate new streams of recurring revenue.
• Keep revenue recurring: Ensure your partners are motivated to maintain and grow this recurring revenue over time.
  

By prioritizing partner profitability and supporting your partners in managing the complete customer life cycle, you can create a sustainable and successful XaaS channel partner program.

Related: Partner Programs of the Future—Designing Partner Programs That Support XaaS Partner Success

Growing Through Partner Enablement

Partner success involves proactive efforts to ensure growth by enabling your partners to drive adoption, expansion, and renewals. Aligning partner incentives with growing annual recurring revenue is an industry best practice. This means rewarding your partners for performance tied to incremental customer spending—upsell, cross-sell, and renewals—beyond the initial contract value.

Aligning Incentives with Growth

To truly drive growth, you need to align your partner incentives with critical metrics:

• Annual recurring revenue (ARR): Pay your partners based on their ability to grow ARR.
• Incremental customer spend: Reward upsells, cross-sells, and renewals that exceed the initial contract value.

Developing New Skills

Successful end-to-end subscription management requires individuals who can think like businesspeople and be product experts. This presents a challenge for many vendors, especially regarding channel partners and partner account managers.

Without proper training in these new skill requirements, partners may focus solely on landing subscription deals, missing out on valuable growth opportunities. To bridge this skills gap, successful XaaS channel partner programs invest in training and enablement.

Training and Certifications

Investing in your partners’ growth involves:

• Training on new XaaS capabilities: 36% of companies have developed training programs on new capabilities like customer success.
• Certifications: 21% have created certifications to ensure partners have the skills needed for success.

Achieving Balanced Growth

Training and enablement help your partners maintain a balanced focus on:

• Increasing adoption: Ensuring customers fully utilize and benefit from their subscriptions.
• Securing timely renewals: Keeping customers satisfied and renewing their contracts on time.
  

By closing the skills gap and providing the necessary training and enablement, you can help your partners drive adoption, expansion, and renewals, leading to overall growth for your XaaS channel partner program.

Related: Building XaaS Offers for Channel Partners

Strengthening Partner Loyalty

In today’s market, customers and partners have the power of choice. Customers expect simplicity and results from their subscriptions and can easily switch to competitors if dissatisfied. Similarly, partners have many cloud-based software companies to choose from when building their solutions. To ensure partner loyalty in your transition to XaaS, focus on profitability, growth, and these best practices:

• Listen: Proactively seek feedback from your channel partners to understand their needs and concerns, especially when building new XaaS offers.
• Communicate: Clearly outline new partner requirements needed to execute the LAER model. Make sure your partners know what is expected of them.
• Enable: Provide your partners with the tools, training, and resources they need to meet these new requirements. This could include comprehensive training programs, easy-to-use tools, and accessible resources.
• Time: Give your partners enough time to adapt and meet the new XaaS requirements. A reasonable transition period can help them adjust without feeling rushed.
• Rewards: Align incentives to reward the new desired behaviors, such as driving adoption, expansion, and renewals. Make sure your partners see the value in achieving these goals.

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Transitioning from a traditional model to a subscription model is an opportunity to strengthen partner loyalty with programs that drive revenue growth and profitability. By listening, communicating, enabling, providing time, and rewarding your partners, you can build a loyal and committed partner network that thrives in the XaaS landscape.

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The Future of Partner Success

Partner success today ranges from a simple rebranding of partner management to a strategic alignment of resources focused on customer success and partner profitability. Partner success will increasingly concentrate on partners delivering business outcomes at scale.

To stay ahead, you should develop comprehensive training, enablement, and financial incentives that reward partners for managing the entire subscription life cycle. Leading XaaS channel partner programs incorporate mechanisms to validate their partners’ customer success capabilities, ensuring they drive post-sale revenue growth through adoption, expansion, and renewals.

You can create a robust partner success framework by implementing these critical success factors. As Ralph Waldo Emerson famously said, “Build a better mousetrap, and the world will beat a path to your door.” Apply this principle to your partner success strategy, and you’ll find your partners and customers eager to join you on the path to success.

Your Key Takeaways

• Evolution in Partner Success: Partner success is no longer just about managing successful partnerships—it’s now integral to delivering XaaS solutions and implementing the LAER model (land, adopt, expand, renew). This evolution reflects the shift toward subscription-based models in the tech industry.
• Critical success factors: Understanding partner success varies across technology vendors, but key elements include comprehensive partner enablement, incentivizing behaviors beyond transactional sales, and adapting to the skills needed for customer success in XaaS environments.‍
• Driving growth and loyalty: Successful XaaS channel partner programs prioritize partner profitability, growth, and loyalty. This includes aligning incentives with recurring revenue growth, investing in partner enablement and training, and fostering long-term partner relationships through effective communication and support.