Back in 2018, Gartner boldly reported that, “By 2020, more than 80% of software vendors will change their business model from traditional license and maintenance to subscription services - regardless of whether the software resides on-premises or in the cloud” Are we there yet? Well, where the big guns go, others follow - you just have to look at subscription model revenues from the likes of Microsoft, Google and Amazon, to see that services have come of age.
As your customers begin to unpick their reliance on legacy, it allows them to reduce costs and integrate or switch between solutions. Resellers and Vendors that continue to rely on recurring revenue understand that in order to keep a customer, delivering exceptional service experiences and managed business outcomes is no longer a nice to have, it is a necessity.
In this, the first part of our 2020 Channel Guide, we’re helping resellers to get services ready- To rethink our joint approach and change the way to define success.
WHAT DOES WINNING LOOK LIKE?
The first step to winning in Professional Services is to establish what winning actually looks like. The industry-wide transformation toward new technology consumption models is generally undermining the channel’s traditional revenue and margin competencies – moving away from product-led, project-based, deployment-oriented services, and forcing them to explore and deliver on new ways of being relevant.
Winning starts with redefining what success means to your customers. When they buy services from you, they are buying something to achieve business objectives. If your aim as a partner is simply to finish the work on time and on-budget, your strategy is wildly off course. Your team needs to produce outcomes that meet with the client’s goals and proof that you’ve delivered for them. In your next customer strategy meeting, rather than asking, “How can we do this quickly for the lowest cost?”, we need to move towards “What services does this customer need to get what they wanted from our product or service?”
The result of a positive services engagement represents a three-fold opportunity to grow your business. Firstly, the customer can extend their subscription contract to provide you with sustainable profit and margin.
Next, services engagements open up your customer to more of your services and products – Marathon found data to support the fact that your Services teams interact with customers 5-15x as often as their Sales counterparts. Think about it.... project planning sessions, installs, service visits, upgrades; all interactions that can result in an opportunity to sell. To grow revenue from existing customers effectively, these interactions can’t be left on the table.
Lastly, and maybe most importantly, customers with strong services engagements become advocates of your business and help you to bring on new clients. Customers tend to believe that Services people are there to help, rather than separate them from their money. It’s the trust that Service Delivery teams have with clients that allows them to ask the questions that salespeople can’t – this level of trust goes both ways and an endorsement from your customer can become one of your biggest sales assets, and a key differentiator.
PLAN TO SCALE
You may already have a services team in place, but what happens when they are at full capacity. Here at Marathon, many of our contracts stem from a lack of resource planning. It would be much better to have a structured plan in place that documents the skills, processes and costs ahead of time – so you can scale your business quickly and ensure the positive outcomes that you and clients are looking for!
Next week is all about setting expectations during the key stages of a Professional Services engagement, but you don’t have to wait that long if you’re ready to get started. Simply talk to the team on 020 8329 1000 or email email@example.com to book a services planning meeting.