Post-Sales Support Drives Recurring Revenue

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  • November 10, 2015

For all the talk about the rise of the cloud and the need to adopt business models that drive recurring revenue, the fundamentals associated with achieving that goal are too often overlooked. When solution providers and channel chief gets right down to the brass tacks of cloud computing in the channel, the difference between success and failure will come down to the level of post-sales support channel chiefs can provide their partners.

Historically, the locus of the relationship between the channel and vendors has been around pre-sales support. While still critically important, the biggest challenge vendors and their partners face in the age of the cloud is getting customers to renew their service commitments. After all, most cloud services don’t actually become profitable to deliver until the customer is in the second or third year of a contract.

For solution providers the need to get customer to renew as well as invoke additional features means they need to engage customers more than ever after the initial sale. That’s a substantially different level of engagement compared to the sale of IT hardware or software installed on premise. Customers typically only upgrade hardware and software installed in their own environments every two to three years. As a result, solution providers don’t tend to interact with customers on an individual product basis nearly as frequently as they need to do when selling cloud services.

Of course, in order to facilitate those engagement channel chiefs that work with partners need to make sure that partners have a legitimate pretext for engaging customers. The simplest and easiest way to accomplish that goal is to educate channel partners about the capabilities of a product or a service to the point where they wind up becoming an expert in how to get the most value out of it. Armed with that level of training, a channel partner then becomes an industry evangelist working on behalf of the vendor.

Naturally, evangelists in the channel are going to need tools spanning everything from on-line demos to case studies that highlight how a particular feature of a service can be a game changer for the customer. Only then does the service or application become sticky enough to make it unlikely the customer won’t renew. In fact, channel partners would be well-advised to evaluate the level of post-sales support being made available before engaging. Unless that vendor has a major focus on customer experience that manifests itself in post-sales support, chance are high that vendor will not be around for the long haul.

As outlined in our Driving Recurring Revenue In The Age Of Cloud white paper, when you get right down to it the difference between making a little recurring revenue in the cloud and having a continuous annuity for years all comes down to the depth of the customer experience being provided. A great customer experience, however, just doesn’t happen of its own accord. In fact, it only occurs when vendors and channel partners work hand in glove after the initial sale to make certain customers not only renew a particular service, but as time goes on eagerly consume more of it.