Various market studies have forecast the global “everything-as-a-service” (XaaS) market to increase at a CAGR of 25.5% between 2021-2026, with the expectation to reach over $350B by 2023. With this rate of growth, there are fundamental changes in the channel that are occurring and will continue to pose challenges for you and your business partners.
With the shift to a recurring revenue model, actions that support customer success increase in importance relative to the initial transaction. Influencers (who may not transact), implementation partners, post-sales support experiences, and a focus on renewals necessitate a change in your partner engagement.
As Nick Tidd, Vice President of Global Channel Sales of Poly shared, “You need to understand the different partner types…and how users want to procure your product.”
In Deloitte’s 2021 study, Everything-as-a-Service (XaaS), 83% of survey respondents feel that XaaS has improved their customer experience and 53% believe XaaS is better for their customer experience than traditional IT.
While those responses underscore the many benefits felt by XaaS adopters to deliver on operational efficiency and business agility, there are persistent challenges that prevent a higher level of adoption and satisfaction:
- Concerns around data security and privacy
- Inadequate IT skills to deploy and manage XaaS
- Concerns about unpredictable costs
- Difficulty integrating with other systems
Adopters don’t feel comfortable with their current providers and only three in 10 adopters are satisfied to stay with their current XaaS providers and only four in 10 reports being extremely satisfied with their current providers’ ability to ensure reliability and performance. Providers and partners are missing an opportunity to strengthen relationships with their customers and help them address issues that materially affect customer satisfaction: 82% of adopters agree their organization could achieve better outcomes if their XaaS providers behaved more as consultative partners.
Providers need to ensure their partners are engaged beyond the initial event of selling XaaS offers. In the world of “Everything-as-a-Service”, you should build your partner incentive programs around the customer buying journey and customer lifecycle. Traditional programs typically address only transactions. By embracing hybrid incentive programs, you can support activities throughout the customer lifecycle – from presale, through sale, to post-sale and renewal.
Model N explores the five steps you should take to evolve your incentive programs to succeed in the new era of XaaS in the e-book, Transform your channel incentive programs for today’s new business models. Download the e-book to learn how you create incentive programs that are relevant and effective; helping your partners increase adoption and usage that lead to increased customer satisfaction, retention, and reduced churn.
