Transitioning to a cloud subscription program will impact your channel sales model and channel partners in some of the same ways it affects employees: there will be concern about compensation and questions about changes in distribution, customer support, reporting, compliance requirements, and more. A major change like this requires the finesse of a change management strategy to ease channel partners' anxieties regarding the changes and to ensure clear and comprehensive communications throughout the process.
Vendors that have a well-planned strategy for rolling out a new cloud program across their channel sales model will start off on the right foot, bringing their channel partners along with them for the ride and supporting the success of the entire channel.
So what should this rollout look like? I have found that there are six key steps that most vendors should consider:
1. Solicit feedback from the channel before the launch.
Not only does this provide valuable feedback from the channel's perspective, but it also includes partners in the transition process and strengthens those relationships.
2. Clearly communicate the program changes.
Identify your new offerings, pricing model, and billing options, along with a timeline and steps for the transition, and explain how the channel can expect to be impacted. Preparing all of your partners in advance for the changes in your channel sales model will help smooth the transition.
3. Define how channel partners will make money with a clear channel compensation structure.
The transition from an annual or perpetual license to a subscription or consumption model can negatively impact revenues across the entire channel, and there are bound to be some real concerns. Be upfront about the challenges and how you are planning to address them, and offer strategies that can help your channel partners weather the first few difficult years as well.
4. Choose a "channel champion" with whom to run a pilot test before a full launch across all partners.
It always helps to have an advocate during a tough transition, and a trusted channel partner is ideal for this purpose. Once you have selected your "channel champion," test out the new subscription model with them in a small trial run. This will allow you to vet your communications and messaging, compensation structure, and support functions in a small arena where it's easy to make adjustments. Once you have gotten feedback on the new model and made any necessary changes, you can be confident that it is ready to roll out to all partners.
5. Provide ample training.
Training for channel partners should address the new offerings, the benefits for customers, new support systems and procedures, and requirements for compliance and reporting. To strengthen channel relationships and support partners' success, you may consider additional training offerings that help channel partners to be successful with the new model, such as a course that instructs them in creating a profitable cloud business model.
6. Provide or enable a system (and support systems) to capture customer and invoicing data.
Do your channel partners have mechanisms to capture the new types of customer data—and the massive increase in data quantity—that a move to cloud subscriptions will incur? Will partners be able to provide monthly data? If so, how will you know they've done it compliantly? Adopt a purpose-build system to address these challenges.
These steps can help provide a baseline for a successful channel roll-out for any vendor's cloud subscription program. To read more about the process of transitioning to a subscription model – and strategies to make it a successful channel sales model – download our free ebook, "Your Guide to Transitioning to a Cloud Subscription or Consumption Usage Model."