Latest / Partnerships Unraveled / 044 - Unlocking Upsell Potential: Maximizing Profits in the Channel

Transcript

044 - Unlocking Upsell Potential: Maximizing Profits in the Channel · Partnerships Unraveled

• 0:07
  Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries of partnerships and the channel on a weekly basis.
• 0:15
  My name is Rick van den Bosch, and I'm the CEO and founder at Channext.
• 0:18
  And I'm here together with Alex Whitford, VP of Partners at Channext.
• 0:22
  Alex, how are you doing today?
• 0:23
  Yeah, I'm doing really well and we're in my favorite Mercedes hat in protest to living in the Netherlands where everyone loves Max Verstappen.
• 0:30
  So I like annoying everyone in the office.
• 0:31
  So it's a good day.
• 0:32
  Yeah, you're doing a good job with that.
• 0:34
  You're a big Formula One fan, right?
• 0:34
  Big Formula One fan.
• 0:37
  And it's incredibly boring because Red Bull and Max Verstappen are too good and it's ruining my season.
• 0:43
  So.
• 0:43
  Yeah, I'm protesting today.
• 0:45
  Yeah.
• 0:46
  How was the Silverstone race last weekend for you?
• 0:49
  Yeah, Rick, it was very painful.
• 0:50
  It was very painful.
• 0:51
  I'm still grieving about it.
• 0:53
  So, yeah, if we can swiftly move on, that'd be ideal.
• 0:55
  Let's do that.
• 0:56
  Let's go to a topic that you like, upsells within the partner.
• 1:00
  Because we're still in our five part series of driving self sustainable revenue with your partners, which means that your partners are able to find close, renew and upsell customers on their own.
• 1:12
  And today we're actually in the final episode where we're going to talk about upsells.
• 1:16
  And I think why are upsells so important?
• 1:18
  And especially within the channel, are there certain challenges that you see there?
• 1:23
  Yeah, sure.
• 1:23
  So if we tackle why upsells are mostly important, if you look at the highest valued businesses in the world, a lot of them are SaaS businesses for a reason.
• 1:33
  And that's because just fundamentally at business level, upsells are one of the best ways to drive consistent success.
• 1:40
  And in the SaaS world, there's lots of opportunities for upsells.
• 1:43
  So what we see is, if you've got 100 AES and they're closing new business all the time, but then you also have 100 CSMS, and they're driving upsells.
• 1:51
  You've got this consistent double scaling vector where AES bring new deals in and CSMS drive those deals and double, triple, and quadruple the value.
• 1:59
  You can grow very, very exponentially, very quickly.
• 2:02
  And so that works brilliantly from a direct to go to market.
• 2:06
  But as you sort of said, there are some struggles within partnerships and within the channel around driving those upsells because there can be some confusion around whose responsibility is it to drive upsells.
• 2:17
  But given in my mind that it's one of the most important things to get right today, we're going to discuss what are the key things that you need to be doing to ensure that your channels are maximizing efficiency when it comes to upsells.
• 2:28
  Yeah, I think if you think about that, with the net revenue retention, that's really one of the biggest drivers of valuations of companies and also how to become successful.
• 2:38
  And it's also really like from the old aged sales methodology where it's like it's easier to sell to existing customers than to new customers.
• 2:48
  Well, I don't know why we even tend to sometimes have the same at Channext, but I also see it everywhere in the channel.
• 2:54
  We're so focused continuously on getting new business in.
• 2:57
  Well, if you have your existing customer base, you make them very successful and you sell more to them.
• 3:02
  Your customer acquisition cost is way lower as well of that extra revenue.
• 3:07
  Yeah, you're 100% right, I think, because acquiring new customers is the hardest thing to do.
• 3:12
  It's the thing you build around.
• 3:12
  Right.
• 3:14
  Which obviously makes sense from a focus and a resourcing perspective.
• 3:17
  But like you say, okay, it's the hardest thing to do.
• 3:20
  But if I just want to grow as quickly as possible, one of the best things I can do is have an amazing process to take an existing customer from zero to hero.
• 3:28
  Right.
• 3:28
  How do I really drive consistent product updates, consistent feedback, consistent revenue growth.
• 3:33
  And if I do that at scale, end users will love working with me because I do that really well, and they're continuing to get more value.
• 3:39
  The vendor loves working with me because, oh, every time they close a deal, that deal is going to double or triple over time because they consistently drive new product or new solution into there.
• 3:48
  And really, it's a really efficient and consistent way of growing.
• 3:52
  Yeah, you touched upon something interesting with that.
• 3:55
  There's some unclarity who's actually owning it.
• 3:58
  What do you mean with that exactly?
• 3:58
  Within the channel?
• 4:00
  Yeah.
• 4:00
  Well, some vendors will put the incumbency completely on the partner.
• 4:04
  Some vendors will say, no, it's our job to drive the upsell and won't even pay the partner on the upsell.
• 4:09
  And some vendors, there's a bit of both.
• 4:11
  And so for partners, that's a very inconsistent way of working because obviously they sell multiple vendors, and for some vendors, they'll be in charge of the upsell, and some vendors, they won't be.
• 4:21
  And that lack of clarity and lack of ownership and lack of responsibility causes churn.
• 4:25
  Right.
• 4:26
  It either causes missed opportunity or it actually causes the end user to churn because we're not really sure who's doing what.
• 4:32
  And I very much see the renewal motion and the upsell motion very interlinked.
• 4:36
  Right.
• 4:36
  To be honest, I look at a renewal if I'm setting my program out, I look at my renewal as, quote, unquote, a failure.
• 4:44
  Because we're always driving for upsell and renewal is the worst thing that's acceptable.
• 4:49
  Right.
• 4:49
  We want to double the contract, but okay, if we can't double the contract, let's make sure it doesn't churn.
• 4:54
  That's how I'm building my program.
• 4:56
  That's how I'm building my go to market motion.
• 4:58
  And if I'm speaking to partners on a daily, weekly basis, I'm making sure they fully understand their roles and responsibilities in those two mechanisms.
• 5:06
  Yeah, I agree there that that's very closely aligned with each other.
• 5:09
  Last episode, we talked about renewals.
• 5:10
  But indeed, what you see actually is renewal and upsell moment is usually very close to each other because usually you start talking about upselling, unless you bring a lot of value very early on, you can go very soon already into upsell motion.
• 5:25
  But usually it is around that renewal moment, but also really finding out, okay, if you sell to enterprise customers, what does their fiscal year look like, when do we need to upsell them, when are new budgets becoming available, et cetera?
• 5:39
  And I think therefore getting a good renewal and upsell motion.
• 5:43
  And in this, I think it really is one motion, to be honest.
• 5:46
  But in this episode we're really going to focus on upsell.
• 5:48
  Like, how can you drive that in an optimal way?
• 5:50
  I think that's crucial if you run a channel program.
• 5:52
  Yeah, you actually bring an interesting point.
• 5:55
  I think the reason we decided to separate these two episodes out is because actually if I look at a twelve month contract, I think I can be driving for upsell within three to four months of the contract starting, but I'm never driving for renewal at that point.
• 6:09
  Right, because that's going to be towards the end of the contract date.
• 6:12
  But and we're going to get into exactly the mechanisms that you do this.
• 6:16
  You want to be developing rollout plan and a roadmap that proves ROI as quickly as possible.
• 6:21
  And sometimes you're getting leading indicators of ROI or early indicators of ROI very soon.
• 6:27
  And that might be enough, especially if it's a proof of concept or a much smaller contract that you're hoping to ten X over the lifetime, then you know that actually after three or four months, that's enough early indicators to prove that it works.
• 6:40
  And then we can drive scale.
• 6:42
  So what I would be very much setting out very early is the timeline that you want to prove ROI, how you're going to prove ROI and when that should be triggered in the upsell motion and set yourself up for success.
• 6:53
  That doesn't need to be towards the end of the contract.
• 6:56
  Do it as early as possible because then you've got as much time to really trigger that upsell motion and then if the upsell motion doesn't work, you've still got plenty of time to get that renewal in.
• 7:06
  I think touching upon that, I think what's crucial within the sorry, yeah, I agree there, because what I think if you go into an upsell motion, you really need to start as early as possible.
• 7:19
  Like what we are also always talking about here internally is actually your upsell.
• 7:23
  You're already starting to talk about that while you are closing a new business deal.
• 7:28
  So that's where you already set very clear success criteria.
• 7:31
  What do we want to achieve?
• 7:32
  How are we going to measure ROI, and from there really drive it and say, okay, but what if we hit certain milestones?
• 7:37
  Can we then immediately talk about upsell already.
• 7:40
  And if you really train your partners on that and build that into your sales process, you really set your partners up for success for upsell.
• 7:48
  And you also get it into the mindset of the partner, where the partner starts thinking about upsell already very early on in the stage versus right now.
• 7:57
  What I see in the channel, to be honest, usually it's very reactive.
• 8:00
  There's either an end user that asks, like, hey, I need more, or they don't.
• 8:04
  But then there's not, like, a very proactive way of driving the upsell.
• 8:08
  I don't know what your experience is there.
• 8:09
  No, I completely agree.
• 8:11
  And one of the things that I think is really important there is that we are setting the expectation within the sales cycle that we are selling a smaller contract today to get a much longer contract or a much bigger valued contract further down the line.
• 8:25
  But that upsell motion only works very seamlessly if all parties understand that that's what we're doing.
• 8:31
  So we're big at Channext around we sometimes sell regional contracts as opposed to global contracts.
• 8:36
  And I'm very big that in sales cycles, we go, Look, I'm really excited to sell you this regional contract, but I'll be really honest, we're doing this so that we can prove ROI and get a global contract, and then that gets everyone baselined as to, okay, we understand that that's the motion.
• 8:52
  What's the ROI and what's the escalation process into global.
• 8:55
  That's the way you want to be educating your partners to close deals, because it makes the upsell so much easier.
• 9:01
  And what we're seeing at Chanx, and what I see when it's done very well, is actually three months, six months into a two year contract, we're already having big Upsell conversations because everyone's bought in to the ROI process.
• 9:13
  Everyone can see that the ROI is working.
• 9:16
  And so they go, well, if we're using it in one region, we should be using it globally.
• 9:20
  And then that's the motion that you want to get into very consistently, because CSMS aren't delivering value after a year, they're delivering value after six months.
• 9:30
  And it's so much easier, especially in SaaS, once you've got an MSA agreed and all the contractual process has been done, it's so much easier to trigger that Upsell.
• 9:38
  Right.
• 9:38
  And so that's the way you want to be educating your direct sales team and your channel team to be incredibly focused on driving intrinsic value very rapidly after the first contract has been agreed.
• 9:50
  Yeah, I'm just thinking, like, what I think what would be really good, like, if you're a channel account manager, for example, to usually when you get a deal registration or a partner comes with an opportunity, you look at that opportunity and start working on it.
• 10:03
  But try to zoom out a little bit and try to think bigger.
• 10:06
  Like, what's the potential deal size of this full customer?
• 10:09
  Let's say you start in a business unit how many business units are there?
• 10:13
  Or you start with 100 users, but how many potential users are there?
• 10:17
  And then you can really create a plan and also start talking with the end user about that because usually the end user doesn't start with your product just for one business unit.
• 10:26
  Their goal is also that it's successful and that they can utilize it for the full company, for everyone for whom it's valuable.
• 10:32
  And I think that is very interesting exercise when you get new opportunities, look with your partner, okay, you give me an opportunity now for 100K, but maybe this is an opportunity for 10 million eventually.
• 10:43
  And what steps or milestones could we look at to get to that point?
• 10:47
  Yeah, this is one of the few times you're going to hear me say this, but be more arrogant because one of the things that I so often see is there's a bit of a scarcity mentality within salespeople.
• 10:57
  They go, oh great, we can sell 100K contracts.
• 10:59
  But exactly in your line, if there's a 10 million contract there, ask for the 10 million, right?
• 11:05
  Okay, you're never going to get that in one sign off.
• 11:08
  But how would we get there?
• 11:09
  Pose that question into your partners, pose that question into your end users.
• 11:14
  How would we get this signed off?
• 11:15
  Well, we'd need to prove it locally and then maybe we'd have to do a few regions or a few different business units and that would be enough of a proof of concept to get to global.
• 11:23
  Brilliant.
• 11:24
  Now suddenly we're having a conversation about 10 million rather than 100K and we understand the gates that we need to get there.
• 11:30
  And then the last bit that you want to tie in is what's in it for the person you're selling to?
• 11:34
  I talk a lot when I'm training channel teams, when I'm training sales teams about there's two types of motivation company motivation and intrinsic motivation.
• 11:43
  Intrinsic motivation is what's in it for the person you're selling to?
• 11:47
  Well, if they've run a proof of concept and now it's suddenly used by the whole company and it's delivering a significant amount of ROI, that's amazing.
• 11:54
  Intrinsic motivation.
• 11:56
  There's probably even a promotion tied to that project.
• 11:58
  Great.
• 11:58
  Now suddenly we've got the buyer at the end user really bought into making this successful and driving it globally.
• 12:05
  Because while it's helpful to us, it's helpful to that individual to say, look, we rolled this out, we've saved X amount of money or we've scaled this amount of time or we've generated this amount of income.
• 12:14
  All of that is really, really important intrinsically for that person.
• 12:18
  Suddenly we're on the same team about driving this global.
• 12:21
  But that only comes from the arrogance to say 100K is not enough value for me.
• 12:26
  I want 10 million.
• 12:26
  How do we get that together?
• 12:29
  And that's something you should really ingrain into your partners as well because they are doing a lot of those conversations and telling your partners that it's very exciting for partners because look at what potential deal size we could get to.
• 12:41
  But if within every opportunity you get, you start thinking like that, then more and more like also with the three times three rule we spoke about in earlier episodes, where you guide your partners to really first do it for them, but then let them do it themselves.
• 12:56
  If you focus on that during their onboarding phase as well, for example, then you get your partners in that motion almost automatically is a bit too much, I think.
• 13:04
  But it's their first thought.
• 13:06
  Like, okay, I have an interesting opportunity.
• 13:07
  I'm going to scope this opportunity.
• 13:09
  But then I'm also going to look together with the end user and with my channel account manager.
• 13:14
  What is the potential deal size we could find here and therefore build a plan, a success plan to get there eventually?
• 13:20
  Yeah, and you actually raise a really interesting program point.
• 13:24
  So one of the things that when you do a deal reg right, and that gets flagged into the system, one of the things that you want to be tracking is what's the value of the deal reg, but also what's the deal potential?
• 13:35
  And that's a programmatic thing that you can change in Salesforce and in your partner portal so that you understand, okay, we are selling to pick a bank locally, we're selling to HSBC locally, but actually there is a deal potential of a global deal.
• 13:50
  So while this might only be one 100K and maybe not flagged to anyone, it's of such a valuable end user that it should be flagged right to the top because this might be our entry mechanism into that customer.
• 14:01
  And so you want to be flagging both of those values so that we know, okay, this deal is only worth 100K, but the deal potential is 10 million.
• 14:09
  We want to be tying resource internally from our high touch team, from our enterprise Customer Success managers, to be supporting the partner into those deals, because 100K turns into 1 million turns into 10 million.
• 14:21
  That's a really great pathway to win a massive contract.
• 14:25
  But you've got to have the escalation mechanism built into your program so that you can see those opportunities and support the partner there.
• 14:32
  I really like this one, I think indeed, if you think about it from a dashboard perspective, usually we only look at indeed like what's the deal value?
• 14:40
  We see which partners have the largest opportunities at the moment, but it would be excellent to also see it in terms of deal potential.
• 14:47
  Indeed.
• 14:47
  Then you have the best of both worlds, where maybe some partners that are not at the top yet, where there's a little less focus from the channel team, but there's a massive potential there.
• 14:58
  I think that will be very interesting indeed to implement such a thing in your program.
• 15:02
  Yeah, I see it all the time, because my background is AV.
• 15:05
  You can have a very small partner have massive relationships with banks, right?
• 15:10
  Because they run the meeting rooms for all the banks, for the whole company, globally.
• 15:17
  And, okay, that's a small bit of a much wider stack, but that means they have very, very good relationships with the It manager.
• 15:25
  And that can be a really great entry mechanism for SaaS businesses, converting those AV partners over to SaaS.
• 15:31
  But you've got to be able to give them the sporting infrastructure because it's not their bread and butter, but they have those high level relationships.
• 15:37
  And so how can we leverage that partner?
• 15:39
  How can we teach that partner that it's great that we're selling 100K, but we're in it for 10 million?
• 15:44
  How are we going to trigger that motion and measuring deal potential immediately ingrains that behavior?
• 15:51
  Because then it's suddenly like, okay, we've only closed a fraction of this deal.
• 15:55
  We've only closed 1% of the total deal potential, meaning 99% is left.
• 16:00
  How do we strive towards that?
• 16:01
  How do we deliver that?
• 16:02
  And suddenly you're ingraining that in partner behavior.
• 16:04
  You're ingraining that in channel behavior.
• 16:06
  And really, that's why we're all here, right?
• 16:08
  We're all here to close the 10 million deal.
• 16:09
  That's the one.
• 16:10
  We're all interested, but we never really close that just in one.
• 16:15
  It's always a proof of concept.
• 16:16
  It's all a smaller rollout where they test it.
• 16:19
  Why?
• 16:19
  Because there's intrinsic motivation within the buyer as well.
• 16:22
  They don't want to cock it up and sign a massive contract that ultimately doesn't work.
• 16:26
  They need that comfort level.
• 16:27
  So there's an intrinsic motivation there from a stick perspective, but also from a carrot.
• 16:31
  How do we embed it and then drive it global?
• 16:33
  And that's a really great thing for that individual to do.
• 16:36
  Yeah, especially if your brand is still a bit smaller.
• 16:39
  It's also the quote, no one gets fired for hiring IBM.
• 16:45
  It's still a thing.
• 16:45
  So that's why usually it's important, especially if you're starting out together with partners, et cetera, that usually you would start with a bit smaller deal size, but the potential is massive.
• 16:54
  But first you need to prove hard ROI.
• 16:57
  And we've touched upon it a little bit in the beginning of this episode, but maybe question also for listeners, like, how would you define hard ROI and what are things you need to show to end users, like, whether it's direct or partner, to actually show that we are driving hard ROI as a product.
• 17:14
  Sure.
• 17:15
  So hard ROI can be summed up as time or money, right?
• 17:19
  Either positively or negatively.
• 17:20
  So we're either saving the business time, we're scaling efficiency.
• 17:24
  So sometimes you'll see that as like, FTE saved, right?
• 17:27
  Or it will be we're saving money or we're generating more revenue than we did before.
• 17:33
  So we sell a marketing automation tool, we deliver that into hard ROI, and we can show, oh, partners grow faster when they use Channext than partners that don't use Channext.
• 17:42
  Excellent hard ROI, and it's got a dollar bill or euro pound or whatever it is tied to it and associated.
• 17:49
  The best hard ROI metric I've ever seen deployed is if anyone's ever built a drop shipping business or anything like that, Facebook ads and Instagram ads, they have an exact dollar bill conversion, so they know, oh, if I put 10 in, I get 100 out.
• 18:03
  That's hard ROI.
• 18:05
  The businesses that build hard ROI very tightly win all the time.
• 18:09
  I describe it as the magic money box effect.
• 18:11
  If you put ten in, you get 20 out.
• 18:13
  Everyone is buying that box then, and then the game becomes, well, can I put 1000 in and get 2000 out?
• 18:19
  A million in, 2 million out.
• 18:21
  And you can see, oh, suddenly this scales very, very quickly.
• 18:24
  You want to be building your proof case around.
• 18:26
  How do you save time, save efficiencies, or generate revenue or save cost, right?
• 18:32
  And the tighter and harder you can prove it, the better you're going to scale, and it triggers upsells so consistently, again, let's talk about intrinsic motivation.
• 18:41
  If someone's bought it in the UK, and we've proved hard ROI in the UK, that person now can present that case up to global and say, look how clever I am, look what I did.
• 18:51
  Maybe I can help you manage this project globally.
• 18:54
  Maybe I can help deliver it, because now I've got experience.
• 18:56
  Intrinsic motivation there.
• 18:57
  They get to say, look at what a good job I've done.
• 18:59
  But it has to be hard ROI, because otherwise if it's soft ROI and it's other metrics that aren't as proof case at the top, they really only care about those two things.
• 19:09
  Am I saving time or am I generating more money or am I saving money?
• 19:13
  Yeah, 100% agree there.
• 19:15
  I think when I think about it from a product perspective, what you need to look at is what are you actually measuring within your system?
• 19:24
  So I think we've spoken about in the past around, for example, video conferencing software that they were actually measuring, like, how far is everyone away from each other?
• 19:32
  And so with every call we do, how many kilometers or miles of flying did we actually save?
• 19:39
  And then you tie the metric you can actually measure, or for example, in cybersecurity, how many threats did we prevent?
• 19:45
  And things like that.
• 19:45
  And then you look for benchmarks out in the world, on average, what would the average cost be for every flown?
• 19:53
  Or what would the average cost be for a threat that has been there or a company that cybersecurity leaks, so to say.
• 19:59
  And if you look at it from that perspective, you tie that together, and then because you need to bring it to a dollar eventually to a dollar calculation, that's the only way you can present into top management, because, yes, also, for example, time saved et cetera.
• 20:13
  That's a great way to start, if you can measure that.
• 20:15
  But then what is the average salary for an employee that would usually do that job and tie it back together?
• 20:22
  And I think the best thing to do if you work with partners, try to implement that in your product.
• 20:28
  So when you set up a customer, how can you automatically show when a partner or an end user logs in into your product?
• 20:35
  Like, hey, what is the hard ROI that I am proving to you on a daily, weekly or monthly basis?
• 20:41
  100%.
• 20:42
  You want to almost always be selling to the CFO, right?
• 20:46
  That's the hardest person to get sign off from, because it's always the hardest ROI that they need to see.
• 20:51
  And it just comes back to that magic money box.
• 20:53
  Did I put ten in?
• 20:53
  Did I get 20 out?
• 20:55
  And if there's another product that I put ten in and I get 100 out, that's even better.
• 20:59
  And that's the way you want to be orientating your whole pitch, your whole sales message, but also then to trigger the upsell event, how do we measure ROI, how do we prove it?
• 21:10
  How quickly are we expected to prove it?
• 21:12
  But also, what's incumbent on the end user, what's incumbent on the partner, and what's incumbent on the vendor?
• 21:18
  Everyone needs to understand those roles and responsibilities, and we've seen it at Channext.
• 21:23
  Sometimes we're able to prove hard ROI in a few months, triggers an upsell immediately, and that's what you want to be showing.
• 21:30
  You want to be driving that performance very early on, far ahead of the renewal date, because that's the motion that we want to get in.
• 21:39
  And it drives success because it creates pressure on the end user and pressure on the partner to really work towards that goal as quickly as possible.
• 21:47
  Suddenly, we can take that global.
• 21:49
  Suddenly we're talking about a much bigger contract.
• 21:51
  And what's really exciting is when you've proved hard ROI, like that magic money box example, right?
• 21:57
  If I put ten in 100, I don't put 20 in next, I put, like, 1000, because we've seen it work.
• 22:04
  And that's how you go from, like, a UK contract to a global contract.
• 22:08
  We're able to jump into a massive upsell because we've done a small proof of concept, and that's the way you want to orientate your upsell process that we're then going from in that example we used earlier, that 100 grand contract, to that 10 million.
• 22:21
  I might be able to get there in one step if my hard ROI is measured and proved detailed enough.
• 22:28
  Yeah, and then tying that back to the channel and the partners space.
• 22:31
  I think it's crucial as a vendor that you really lead the way there for your partners.
• 22:36
  Because the partners work with 20 to 30 vendors, they are not going to calculate that for every product separately and things like that.
• 22:43
  So I think that's crucial if you are a vendor that you go really deep.
• 22:46
  Like, what is the hard ROI that we are bringing?
• 22:49
  Calculate it, make multiple cases, help your partners with it, and then really try to integrate, implement it into your product so your partner and your end user continuously see it.
• 22:59
  Because I think then if you've got that model right, and you teach your partners how to drive the results, like, with their services, with your product, where you know, okay, if the partner does this and then the end user gets this result, then this is the hard ROI where we're aiming for.
• 23:14
  I think then you really get into the right motion with a lot more upsell success.
• 23:18
  Yeah, I completely agree.
• 23:20
  And I think you've got to embed that in early.
• 23:23
  Right?
• 23:23
  It's got to be embedded into the sales process where I see churn happen and where I see a lack of upsells consistently.
• 23:30
  It's because we're starting to talk about that once the contracts closed.
• 23:34
  I think in the last episode, we spoke about Slack, the slack process to drive retention.
• 23:40
  They have a really good data.
• 23:41
  So once you send 2000 internal slack messages that the customer is not likely to churn.
• 23:47
  But let's just think about that from the upsell perspective.
• 23:50
  Maybe we've just deployed Slack in the US.
• 23:50
  It's a beta test.
• 23:53
  We want to see it work in the US.
• 23:55
  Okay, well, we are embedding that conversation really early.
• 23:58
  We're proving ROI in terms of efficiencies and into a dollar amount in the US.
• 24:03
  How easily would you trigger a global upsell if after six months, you go see here's how much money we've saved, or here's how much money we've created because we're able to deliver product faster, or whatever the efficiencies, the ROI message that you're tying around, around communication efficiency, that will just go global almost immediately.
• 24:22
  But you've got to embed it into the sales cycle at the beginning.
• 24:26
  You've got to get your partners to be having the conversation around, guys, we're selling you a localized contract, or we're selling you a smaller contract.
• 24:33
  But our goal is to take this global.
• 24:35
  How do we do that?
• 24:36
  What do we need to prove?
• 24:36
  What's the timeline?
• 24:38
  We need to prove who are the stakeholders that we need to sell to today versus in the future?
• 24:43
  How do we start nurturing those relationships early, all of that process, because the 100 grand contract is not the goal.
• 24:50
  That's a stepping stone to the 10 million contract.
• 24:52
  But you've got to be building your entire motion around the larger one, not the first one.
• 24:57
  And that's why I come back to sales arrogance.
• 24:59
  100k is not enough.
• 25:01
  How do we get to 10 million?
• 25:02
  How do I orientate my channel around that 10 million contract?
• 25:05
  Because those are the contracts that make an incremental difference to everyone's success.
• 25:10
  Yeah, I think it really starts with that, and it's getting them in the right mindset.
• 25:14
  And then secondly, and.
• 25:15
  Maybe final point to touch upon today.
• 25:17
  How do you incentivize the partners for the upsell?
• 25:20
  Because one thing is getting them excited about how do we get the deal as big as possible, but then also the partner wants to understand, of course, okay, and of the biggest deal as possible, what part of the pie is for me as a partner, what's your vision there in terms of, like, new business versus upsells?
• 25:36
  To me, it should be identical.
• 25:38
  I find it absolutely bizarre that vendors would say, oh no, we just want them to bring in the net and we'll do everything else.
• 25:48
  If the partner provides value in the net new deal, they will provide value in the upsell.
• 25:52
  Or they should if your program is designed properly.
• 25:55
  So if your program is designed in a way that the partner needs to be involved, pay them like they should be involved.
• 26:00
  The whole point around net revenue retention is if you acquired no new customers, you would still grow.
• 26:06
  And if you design your channel to support that architecture, then ensure that they are correctly incentivized to help that process forward.
• 26:14
  Obviously, if there's no value for the partner when we touched on this in the last episode, in the retention episode, there's no value to the partner in the upsell, they will start to compete against you after they've helped you with that deal because suddenly they're going, hang on, I'm not seeing any of this value.
• 26:30
  I close 100 grand contract.
• 26:32
  Now that contract is worth 10 million and I didn't get any more.
• 26:34
  Well, I'm going to now try and sell a competing product because I know the deal potential is 10 million.
• 26:39
  How can I compete?
• 26:41
  You don't want to introduce that threat into your channel.
• 26:43
  So pay them the exact same way you would pay a net new deal versus a retention versus an upsell.
• 26:48
  There's a percentage of the value that the partner should get.
• 26:52
  Continue to drive that, but ensure that you are holding them also accountable for supporting you there.
• 26:58
  Right.
• 26:58
  If suddenly they're stepping away from the deal or just handing it over, that's not the behavior you want to promote.
• 27:03
  So build a really tight alignment.
• 27:05
  Ensure they're getting correctly paid for it, but ensure they're also delivering the correct amount of value to that opportunity as well.
• 27:12
  As a vendor, you really need to have a very good view of what is the roles and responsibilities of my partner in the renewal in the upsell there as well.
• 27:21
  And if they are somewhat involved, like even if it's a referral partner, but they are still very much involved in service, et cetera, then you need to make sure that they are partly rewarded, of course, with resell it's the highest because then the partner is completely responsible for the upsell and the renewal.
• 27:37
  But if it's a referral model where your CS team is involved as well, if you do everything as a vendor for as soon as the partner brought it in, they can consider not doing it.
• 27:47
  But if there's somewhat involvement needed of the partner continuously, then you will lose their attention for the renewal and upsell because they will automatically only look like, yeah, I'm doing all this work around renewal and upsell, but I only get rewarded for new business.
• 28:00
  So you get like behavior you don't want necessarily for your net revenue retention.
• 28:04
  Yeah.
• 28:04
  And the other piece that's really important, right?
• 28:06
  We've just spoken at length about how you want to set the expectation in the original sale that we're not going for the 100 grand, we're going for the 10 million.
• 28:14
  Well, if you only pay the partner on the 100 grand, they are never going to position the 10 million.
• 28:20
  Why would they?
• 28:20
  That's a much bigger, much more complicated deal that's going to be a lot slower to sell because we're going to set lots of metrics and lots of design functionality around a global contract.
• 28:30
  If they're not going to get paid for that, they're never going to do that behavior.
• 28:34
  And so for me, if you want to be selling 10 million contracts through the channel, you've got to be driving the behavior into the partner, which means you've got to be paying for the partner for the upsell because otherwise it will just always break down.
• 28:46
  And I have seen it happen where vendors get a little bit tight, they're like, oh, it's 10 million contract, we're doing lots of work and it's like, but would that contract have ever come about without the partner in place?
• 28:56
  No.
• 28:56
  Then don't worry about it.
• 28:58
  Just worry about how you can find a lot more of those 10 million contracts.
• 29:02
  Think of it in a wealth mindset, not a scarcity mindset, and you will build your channel far further.
• 29:08
  10 million contracts.
• 29:09
  Sounds like some excellent self sustainable partner revenue.
• 29:13
  There we go.
• 29:13
  That's the goal, I would say.
• 29:15
  Thanks for sharing again today.
• 29:17
  I hope our listeners enjoyed it as well.
• 29:19
  We spoke about upsells today where it's very clear you need to start as early as possible in the sales cycle already when it's still a new business deal.
• 29:28
  You need to prove hard ROI and you need to incentivize your partners properly.
• 29:32
  This is also the wrap up of our five part series about self sustainable revenue.
• 29:37
  How do you help your partners find close renew and upsell opportunities?
• 29:42
  I hope our listeners enjoyed it.
• 29:43
  We're going to come with a new topic next week again and see you next week.
• 29:47
  You're.