Navigating Partner Transitions: Consulting Corner

Today in "Consulting Corner" series 💡 a prominent tech product company grappling with transition. Their reselling partners have traditionally held full local control. Now they need to turn them to VAR partners who focus on services instead.

"Consulting Corner" is a glimpse into real-world challenges companies face while shaping their partnerships strategies.

📑 Context:

A successful, globally recognized company deriving ~30% of its revenues from reselling partners, who've traditionally owned the local business and customer relationships in several countries. Now, with a new SaaS product launch, they're faced with a strategic challenge – how to turn their resellers into VAR partners without damaging existing revenue streams and relationships?

Here's my perspective, but curious what would you recommend?

❌ Avoidance isn't a viable strategy

Telling partners that strategic decisions have been made by their management to withdraw their territorial rights isn't the route to go down.

✔️ Recommendation

Try a tactful approach to maintain relationships. Frame the transition as a response to market trends, not just an internal decision. Use this tech recession as an opportunity for change.

Emphasize to partners that the entire industry has moved to SaaS. Stress that this shift is not only timely but essential for both you and them for securing future revenues.

Prove that customers are demanding more than partners re-selling products. They want comprehensive solutions - SaaS wrapped with services. Studies from consultancies like McKinsey can serve as valuable evidence. Use our deck on the state of VAR partners (in the feed).

Consider a transition period incentive plan to make the switch smoother.

Create a clear change plan. Create open communication channels and offer extra training and support to help partners transition to the new SaaS model.

🎯 Partners' Pitch

Reassure partners that your goals are aligned.

While the transition might be challenging, the potential benefits outweigh the temporary difficulties.

The improved product, higher NPS, scalability, and potential extra market share will ultimately lead to more clients and greater returns.

Plus, you're offering more support during the transition.

✔️ What might help

Case studies from successful companies like Atlassian and HubSpot, showing the potential of thriving VAR partnerships, could serve as valuable framework.

⚡️ Risk Mitigation

Anticipate challenges related to customer relationships and satisfaction during the shift. Prepare for partner technical training needs to effectively sell and support the new SaaS product.

Shortlist an alternative set of partners on the local market, so you have a hedge in negotiations.

✔️ Homework

What should be true for partners to actually increase their revenue in the future as a result of this shift?

__________

📈 Accelerate your Growth in Cloud Marketplaces

Transform your marketplace strategy with first-hand insights from Cloud GTM leaders in our 5-week cohort course. Learn in a community of great alliance leaders. Join 100+ alums from companies like GitLab, Darktrace, IDC and others.

Join Cloud GTM Leader course