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MenuI wanted to see if anyone could provide examples of SaaS offerings doing well in a distribution channel sales environment?
Looking to move a product that is a client based application sold in a distribution channel to a SaaS model and wanted to see if others had any experiences with this. What is the some of the best practices that came from experience. Did you pay on the second and third year? Did you offer mutli sku's in the channel? Did you VIR the channel to protect your direct pricing or did you give normal margin?
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Take a look at Intermedia, from what I can tell they are a favorite of VARs and are also in the Ingram Micro cloud catalog (along w/ Box). Xero also has some level of reseller relationship with accountants but that is more than just a typical VAR or disti model, since the accountant remains deeply involved with the business client.
One issue that VARs brought up in my discussions with them was branding - they really like to have their brand in front of the customer (this is one of Intermedia's selling points). Not sure if this would work for you or not.
Happy to jump on a call to discuss more, I spent quite a lot of time looking into this at my last company as we launched a SaaS service.
I can provide some best practices based on industry insights:
Research and analyze: Before making the switch to a SaaS model, thoroughly research and analyze your product, customers, and distribution channels. Determine if your product is a good fit for a SaaS model and if it will deliver value to your customers in this format.
Communicate with your customers: Communicate honestly and openly with your customers about the transition to a SaaS model. Explain the benefits and any potential drawbacks, and offer options for any necessary adjustments to existing contracts or pricing.
Prioritize customer success: Make customer success a top priority during the transition. Provide adequate resources and support to help your customers navigate the change, and continually seek their feedback to improve the product and overall customer experience.
Adjust pricing: Revisit your pricing strategy to adapt to the SaaS model. Consider offering subscription plans with flexible terms, pricing tiers, and add-ons to accommodate varying customer needs and preferences.
Adapt your go-to-market strategy: Adapt your go-to-market strategy to suit the SaaS model. This could include changes to your sales and marketing processes, as well as a focus on building a strong brand and community around your product.
Leverage your distribution channel: Consider leveraging your distribution channel to help facilitate the transition to a SaaS model. This could involve offering a hybrid model that combines traditional licensing with SaaS subscription plans or partnering with channel partners to offer joint solutions.
Secure buy-in from stakeholders: Involve all relevant stakeholders in the decision-making process and secure buy-in from key players such as sales, marketing, finance, and product management. This will ensure a smooth and successful transition and help address any potential challenges that may arise.
Regarding your specific questions:
Payment structure: Depending on your product, market, and business objectives, you could consider offering a variety of payment structures, such as annual or monthly subscriptions, perpetual licenses with SaaS support options, or tiered pricing based on usage or feature sets.
Multi-SKUs: Offer multiple SKUs to suit the needs of your customers, but be careful not to overcomplicate your product offering or create confusion in the market. Prioritize simplicity, clarity, and ease of use throughout the SaaS transition.
VIR: Decide whether to VIR (volume incentive rebate) your distribution channel partners, and if so, to what extent. VIR can help to mitigate any potential price erosion and maintain healthy margins for both the distributor and the channel partner, but it should be carefully balanced with the benefits of maintaining positive relationships with your distribution channel partners.
In general, the priority should be to focus on delivering a compelling SaaS solution that meets the needs of your customers while simultaneously adjusting your pricing, go-to-market, and other strategies to suit the new model. Your decisions regarding specific aspects of the transition will depend on your unique circumstances, and it's essential to thoroughly evaluate and balance all relevant factors.
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Offer to teach them something, or offer to give them a sneak-peak behind-the-scenes of your new product. - Send an enticing offer for this content out to your list. Get people who are interested in this content to sign up for it. This creates your launch email list. - Send your launch list weekly updates: development milestones, sneak-peak screenshots, videos, educational material, interviews with/testimonials from beta users, and so on. - You're not trying to sell here yet (not hard sell at least). Drop some hints that there is going to be a special offer when the product launches, just for special loyal customers like them. - Create at least three videos on topics that are really, really interesting to your prospective customers... not necessarily about your new product itself, but teach them about what they can achieve with it, or what others have achieved with it already. As you publish these videos, send the link out to your launch list. - Also send out an offer to see these videos to your main list, to entice more people to sign up for your launch list. - As you get closer to launch time, keep sending frequent updates to the pre-launch list, and send another email out to your main list to let them know that the product is launching soon, and that if they're interested in the special one-time-only launch pricing, they need to sign up for the "early bird list" (your launch list). - Send out a 24-hour notice that the launch is going to happen soon, and the launch pricing will only be available for a limited time (potentially, to a limited number of customers ... to increase scarcity and urgency). - I recommend that even if you plan to open the product up to all your customers that at launch time you limit it to a smaller number. 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