Expand Channel Sales Online

Learning Objectives

After completing this unit, you’ll be able to:

• Understand how both XaaS and transactional are necessary to develop your channel.
• Identify how to empower long-tailed partnerships.

XaaS Picks Up Steam

While the traditional transactional sales model is still dominant in the channel, the shift to an as-a-service (XaaS) model is accelerating. The XaaS business model is allowing more businesses to embark on digital transformation initiatives by lowering the entry cost for infrastructure or enterprise services. Customers are simply charged for consumption.  

Most partnerships are having trouble managing recurring revenue relationships since they do not have the infrastructure to measure consumption or handle renewals. The move to XaaS also cuts into the channel’s revenue since customers are no longer front loading service contracts with partners. Solution providers in particular are finding it difficult to make the transition, especially small- to medium-size shops with less than $10 million in annual revenue, thanks to the high cost of entry.

So why should partners ever make the transition? Simple. Customers are demanding more XaaS offerings. According to Forbes, the XaaS market is growing at more than 40% a year. Those who do not make the transition will see declining market share. Regardless of the upfront cost, The Channel Company research notes that nearly three-quarters of solution provider partnerships plan to increase their investment in XaaS, due in part to the long-term benefit of securing recurring revenue streams.

To effectively manage XaaS relationships, businesses must help partners by delivering the tools needed to guide sales. Guided selling with SFA (Sales Force Automation) + CPQ (configure, price, quote) software embedded in a partner portal can eliminate a lot of friction through the channel sales process. SFA (Sales Force Automation) helps guide partners through your sales process while CPQ delivers access to automated, accurate quotes according to preprogrammed rules—meaning sales teams waste less time reviewing quotes. Just as a great salesperson can ask a customer a few questions and steer them to the right products and services, CPQ software can take a few inputs and recommend the correct bundle of products and services that can make the end customer successful.

Transactional Sales Need to Be Easier

Companies must also look for ways to make transactional sales easier. Empowering long-tailed partnerships with minimal resources is key to a successful channel strategy. That’s why many businesses are turning to B2B commerce solutions to make ordering products self-service. 

The Channel Company noted that 88% of B2B decision-makers say they plan to offer their products primarily online in the next 5 years. These leaders recognize that offloading tailored product offering (52%) and order automation (48%) are the greatest benefits of self-service sales.

A self-service approach allows partner relationships to be much more hands off for businesses. A self-service tool in which partners can access products and services on their own means vendors can spend less time managing those relationships, particularly for partners who order just a few times per year. This way, partners get what they want when they want it, and vendors don’t have to dedicate a manager to every partner.

Tailored product offerings and order automation are the name of the game in B2B, and there’s a reason leading vendors are implementing technology to capitalize on these features. Simply put, the right technology in the right channel can promote faster, easier sales. Plus, these options provide partners with more freedom in their buying experiences. Giving partners more access and more options can lead to fruitful long-term partnerships.

Resources

• The Forrester Wave™(Sign-up Required): Partner Relationship Management, Q4 2020
• Salesforce State of Sales (Sign-up Required)