Change is the steadfast companion of progress. The winds of tech transformation have ushered in the subscription-based business model, reshaping the way vendors and suppliers engage with partners and customers alike. This shift holds the promise of recurring revenue streams and deeper customer relationships, but it’s not without its unique set of challenges. As vendors, understanding these challenges and equipping yourselves with strategies to address them is crucial to helping partners thrive in a new model.

Times of innovation offer vendors the opportunity to orchestrate long-term relationships with partners while ensuring steady revenue flows. Vendors can act as enablers of success, offering ongoing solutions that cater to the evolving needs of partners and customers.

Defining and Confronting the Challenges

While the allure of subscription services is evident, partners (and, in turn, their vendors and suppliers) are grappling with a series of challenges unique to this model. Weston-Comstor reports that the majority of channel partners (78%) have started on on the journey towards subscription-based services, but only a fraction have achieved full migration. Vendors need to proactively address the hurdles partners face and provide support to help them succeed. Vendors and partners are co-architects of the subscription economy. By fostering a collaborative environment, vendors can tap into the insights and experiences of partners. This collaboration not only aids in addressing challenges but also paves the way for innovative solutions that cater to evolving customer needs.

1. Redefining Value Propositions

Shifting from traditional product-based sales to subscription services requires vendors to recalibrate their value propositions. The challenge lies in effectively conveying the ongoing benefits of subscriptions, such as continuous updates, improved functionality, and cost-effectiveness. Vendors need to guide partners in articulating these advantages to end customers, demonstrating the tangible value of the subscription model. That means their through-partner marketing materials have to reflect the benefits of that shift and articulate why the partner made the decision to transition, and how it’s best for the customer. 

Marketing strategies must pivot from product-centric to value-centric. Vendors should craft compelling narratives that emphasize the long-term benefits of subscription services. These narratives resonate not only with partners but also with end customers who seek value-driven solutions.

2. Partnership Empowerment

Partners are the conduit between vendors and customers. As the subscription economy gains momentum, technology vendors need to equip their partners with the knowledge and tools to navigate this new terrain. Offering comprehensive training programs, resources, and insights on subscription sales techniques can empower partners to confidently communicate the value of subscriptions to their clients. Make the training on-demand and self-paced so your busy partners can learn at their own pace and on their own terms. Be available for questions and coaching, or engage with a third-party agency to be on hand to help. Don’t leave partners hanging.

Investing in partner education is an investment in success. Vendors can leverage PRM solutions to provide partners with tailored training resources. Armed with a deeper understanding of subscription sales techniques, partners can confidently navigate the changing landscape and drive adoption.

3. Pricing Strategy Evolution

Pricing strategies that once focused on one-time transactions must now evolve to accommodate the flexibility and diversity inherent in subscription models. Vendors and suppliers should collaborate closely with partners to develop tiered pricing structures, trial periods, and customizable offerings that cater to a wide range of customer preferences. This adaptability will foster stronger partnerships and enhance customer experiences. Take it from any VAR that made the heavy lift to change to a managed services model. Customers don’t like changes in pricing models, and if you don’t sell them on the reason for it, they’ll leave. Partners need help convincing them that it’s what’s best for everybody.

4. Data-Driven Decision-Making

In the subscription era, data is the linchpin of success. Vendors absolutely must invest in tools that provide comprehensive insights into partner and customer behavior. By harnessing data-driven analytics, vendors can tailor their offerings, refine sales strategies, and forecast demand more accurately, creating a win-win scenario. We all use automated systems that house vast amounts of data, so there’s no excuse not to take advantage of it in order to help your partners succeed. Give them data-backed reasons for the recommendations you make and the direction you provide, rather than just telling them, “Trust me.”

5. Channel Partner Enablement

The journey to subscription services requires seamless coordination between vendors and partners. Vendors need to facilitate open communication channels, provide real-time support, and create platforms for sharing best practices. Establishing a collaborative environment where partners can seek guidance, share experiences, and access resources can accelerate the transition to subscription-based models. Consider establishing a peer group or forum where partners can spitball off of one another and share experiences. You might be surprised at how successful a tactic like that can be.

Embracing the Subscription Advantage

The technology landscape is in a state of perpetual flux, and those who recognize and adapt to change stand to thrive. The subscription economy is more than just a trend—it’s a fundamental shift that requires vendors to realign their strategies, foster partnerships, and empower their ecosystem. Embracing the subscription-based economy requires a profound shift in perspective and strategy for technology vendors and the way they approach their partner relationships. Navigating the challenges, from reshaping value propositions to fostering partner empowerment, demands a commitment to collaboration, innovation, and unwavering support. Help your partners help themselves evolve and grow!