Why SaaS Channels are Vital to SaaS Growth
CJ18. This episode on SaaS Channels features Sunir Shah, founder of three SaaS organizations. He has his own SaaS company, AppBind. He runs the SaaS Connect conference. And he founded the Cloud Software Association, a network of over 2,000 companies building the market and channel for cloud software distribution.
The subscription model of SaaS has driven many SaaS companies to only sell direct. Sunir has a depth of SaaS business development expertise. Sunir provides 5 big reasons why SaaS channels are so important for the success of SaaS companies and when to build them. And he tells us what he’s doing with his company AppBind to make it easier for SaaS Channel partners to buy and manage multiple SaaS subscriptions they sell as part of their bundled service to their clients.
- SaaS Connect is a meeting-central event. Over 300 SaaS partners, vendors, investors, and other leaders convene to learn best practices and form new partnerships. The event is designed to meet everyone and build a network you can carry forward.
Why We Need SaaS Channels
- Integrations and open APIs were once seen as a crazy idea, just as some today think SaaS channels and partnerships is a crazy idea. Today, the majority of SaaS is sold direct. However, you can’t expect to own the entire customer experience or reach every customer in the world.
- SaaS growth is being limited by a lack of SaaS channels. While Gartner predicts SaaS revenues to reach $85 billion in 2019, Microsoft’s revenue alone is over $100B. The big difference is that Microsoft is channel-driven and very proud that for every $1 Microsoft makes their partners make $10, and they generate more than 95 percent of our business through their partner ecosystem.
- The biggest problem threatening SaaS growth is that most SaaS investors and CEOs still want to control the customer from beginning to end, and they see partners as a threat.
- SaaS adoption is key to reducing churn, yet most SaaS companies attempt to handle the customer experience on their own, or compete with their partners in providing on-boarding and adoption services. In contrast, one CEO took a giant step in supporting his SaaS channel by eliminating the company’s Customer Success team and putting 90% of the on-boarding role in the hands of their partners.
- The SaaS Growth Ceiling is when the number of customers your acquiring every month equals the number of customers who are turning away every month. And it’s a trap. Because no matter how hard you work, you will always stay at the same place or start declining. One way out of the Growth Ceiling is to grow customer acquisition exponentially through SaaS channels.
Source: The SaaS growth ceiling: what happens when churn takes hold by ChartMogel
Building SaaS Channels
- The SaaS partner ecosystem depends on your offering. It may include a developer network, a service network, and a network of commercial channel partners depending on where you fit.
- With SaaS, you must generate customer demand for your product first before your channel partner will sell it.
- Focus on making sure that customers like your product, work on your direct sales, messaging, marketing, and building product market fit. Make enough case studies and proof that your thing is working, then you can start to build up your SaaS channels.
Solving a SaaS Challenge with AppBind
- Software has always been a partnership play. One piece of software can’t solve an entire business problem. That is why partners play a key role in integrating and bundling multiple offerings. They add their own IP to provide a service that solves customer’s business problems.
- AppBind solves the billing challenge partners face when combining multiple SaaS products into a bundled service. For example, with AppBind, a social marketing agency can buy SaaS subscriptions for a social media scheduler, advertising, dashboards, buffer accounts, etc. , mark them up, and sell them as part of a bundled service to clients, and manage all the subscriptions in one place.
- With AppBind, Managed Service Providers (MSPs) can control all of their SaaS subscriptions, many with different billing metrics, that make up their service offerings.
Share ThisYou can't own the entire customer experience. You need to develop an ecosystem of partners around you because you can't phone and email every customer in the world. - @Sunir Click To Tweet The channel is the most important future development we need to build in order to get SaaS to grow. - @Sunir Click To Tweet The biggest, biggest, biggest, biggest problem absolutely, is that most SaaS investors and CEOs still want to control the customer from beginning to end and they see partners as a threat. - @Sunir Click To Tweet The predictable part of SaaS predictable revenue is that it will hit a ceiling and then you're stuck. So what's your next leverage? It’s the channel. - @Sunir Click To Tweet
Links & RESOURCES
- Follow Sunir on LinkedIn and Twitter
- Learn more about AppBind
- Join the Cloud Software Association
- Learn more about SaaS Connect
- Read Rob’s 4 SaaS Channel Takeaways from SaaS Connect
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