A guest post from unreasonablemen.net
I recently had an interesting debate with someone about ‘customer ownership’ and how this plays out in a SaaS world. It’s perplexing because my verbal sparring partner has some great points, but the root of my unease with the whole debate was based on uncertainty about if "ownership" even matters anymore?
Let’s look at the evolving SaaS reseller and integrator market. A bunch of companies have made money through selling, installing, integrating and managing on-premise software, but have now have seen the writing on the wall and are looking at morphing their business models to support SaaS. In this case they still sell, but their services are significantly different. They configure, train and provide "2nd level" support.
The issue is that in the first instance, the customer was ‘theirs’. They held the core engagement and their walk away position was strong. But in a SaaS world (Salesforce.com, or even Microsoft’s hosted exchange product), the SaaS provider holds the customer, they are no longer "owned" by the integrators. So the integrator can do the up-front work, but can easily be disintermediated in the medium to long term. Imagine if Salesforce.com or Xero or another SaaS player decided to increase revenue by building a consulting and training practice…what then for their channel partners?
My counter argument was that in a SaaS world you are on the line every day for great delivery. This includes the channel partner – if you don’t deliver then of course you can lose the customer. There is also a lot of relationship and customer knowledge that comes with the deal AND if you are dumb enough to be a one track pony then of course you are under more risk. What I mean is, if all you do is sell Xero or Salesforce.com and you haven’t thought about expanding your engagement with that customer with other services like change management etc then you created a high-risk situation yourself.
What do you all think?
Is customer ownership still relevant? If so how does it work in a SaaS world? Where do you stand on this? I think its important because a good channel model is going to be increasingly important to SaaS to counter the stagnant growth perceptions that exist.
We, at Phase 2, believe that “Owning the customer” is as important to our partners as it is to us. It seems to me that if you are funding marketing, the sales force, the design, and all for the time to get the deal through the sales cycle… the last thing that you want to consider is giving the customer to someone else. If you’re not at ease with this (Like most SI’s I know) then find a partner that offers private labeling and allows you to remain the face to the customer.
“in a SaaS world you are on the line every day for great delivery” – This is soooo true. SaaS is a relationship. Every day you have to deliver the goods and keep the ‘flame’ alive with the customer. It’s kinda like a permanent courtship, rather than a marriage.