Cisco partners, before I dig into anything here, let me start by asking you this: If you could do something for your business that would help you drive 3X more software recurring revenue with your customers, would you be interested? Of course you would! And you know where I am going don’t you? The everlasting topic of building your lifecycle practice, which is all about helping your customers achieve their desired outcomes by adopting your services and technology. All of this while maintaining a positive customer experience along the way. This language is all around you.
Today, 80% of sales calls are still focused on a product pitch and not the buyer’s needs. Yet, customers have evolved their focus. They are looking beyond just purchasing products. Customers want to achieve business outcomes from the technology they purchase. They want a partner who can align with them and help them deliver the value they seek.
You are probably aware of the potential lifecycle benefits to your business. By adopting a lifecycle practice, you can strengthen your customer relationships, achieve higher renewal rates, and build more predictable recurring business streams. You also and differentiate yourself in todays’ transformational, competitive market.
You know all of this, yet you haven’t built a lifecycle practice with Cisco.
I suppose it is easier to just do what you know has helped you build a successful practice with Cisco and your distributor so far: You know how to land and close deals. That’s it. Perhaps where you struggle is the next step in building a repeatable sales motion to drive adoption, expansion, and renewal with those very same customers—passing up to 10 points higher renewal rates and up to 20% higher services bookings.
Let me share a hypothesis I have on what I suspect is going on. It might be too overwhelming to get started. One or all the following myths are preventing you from getting your lifecycle practice underway:
Myth #1: It’s too much work to make it worth my while.
Myth #2: It requires customer experience expertise I don’t have.
Myth #3: It requires a hefty investment to get started.
Well, it’s time for a little myth busting because there is help on the way in the form of Customer Success-as-a-Service with your Cisco distributor. They can assist you in building your practice, provide hands-on support and collaboration, or manage the majority of the process for you.
Myth #1: It is too much work to make it worth my while.
I cannot stress this enough: It is much easier to keep and retain your existing customers and build your business with them than to go out there and prospect for new customers. The higher customer churn you have the lower the probability you can scale a subscription-based business or become profitable over the long term. When you drive a positive experience with your customers and ensure they are adopting and deriving value from the technology they have invested in, they will come back and buy that much more. The multiple is huge.
This is where your distributor can help you build your lifecycle practice. With Cisco’s unique customer experience methodology and focused investments in outcome-based and lifecycle-centric service offerings, Cisco and your distributor can play an important role as you start your lifecycle journey. We’ve seen a 52% increase in profitability after the initial sale when a Cisco partner has a lifecycle practice.
When you take advantage of Cisco Enterprise Agreements (EAs), the multiple is even higher.
Suppose your Webex customer needs secure networking, but you don’t have the expertise, skills or advanced security, cross-architecture certifications or qualifications to sell across Cisco’s portfolio. Take advantage of your distributors’ capabilities to help you scope and quote an EA and then help manage the license activation and utilization through their Distributor-EA-as-a-Service. Rely on their expertise. You can enter an agreement with your distributor, and they will transact it for you. You get the opportunity to sell secure networking instead of your Webex customer looking elsewhere. (And this goes for the rest of the Cisco portfolio as well. Sell that too, along with secure networking!) When you close a recurring software deal with an EA, the propensity for your customer to renew or expand that EA is that much more likely.
Many partners are already taking advantage of this service. Cisco’s Distributor-EA-as-a-Service on behalf of 2T partners, drove an astounding 140% growth in EA’s last year.
Myth #2: It requires customer experience expertise I don’t have.
Customer experience encompasses the entire lifecycle journey a customer undergoes from purchasing a Cisco solution through to renewal. Some partners have a lifecycle practice and customer experience employees who are seasoned behind-the-scenes professionals focused on creating and validating a positive customer journey. They ensure that every touchpoint aligns with the customer’s expectations and desired outcomes. Perhaps you don’t have that. This is where you can lean on your Cisco distributor. Cisco’s Customer Experience Specialized distributors account for a whopping 80% of our 2T recurring business! Turn to them to help you build your lifecycle practice journey towards value realization for your customers. Cisco has hundreds of 2T Customer Experience Specialized partners that have earned their customer experience specialization (Cisco also refers to the Customer Experience Specialization as CX Specialization) with the help of a Cisco distributor, and they have grown their recurring software business over 50% in the past year.
Myth #3: It requires a large investment to get started
We realize that you may not be in the position to invest in the headcount and resources it takes to get your lifecycle practice up and running. Again, this is where your Cisco distributor can help.
Distributors are an extension of Cisco. They are invested in your enablement for your customer success. Many have sophisticated lifecycle platforms, monitoring and ensuring that your customers effectively use Cisco’s technology. They can help you build success plans and playbooks to help you guide your customers toward achieving their goals. They have invested in the resources, technical and lifecycle capabilities, and built the expertise to help you build your lifecycle practice.
Work with your distributor as you identify deals and let them help you build a customer engagement and success plan. They very well have a customer success manager (CSM) on their team who can guide you the entire way and help you build a success plan for your customer. Mastering the nuances of customer success with your CSM, you can transform your customer engagement strategies and drive growth this year and beyond.
Cisco’s partner lifecycle program is flexible. We will meet you where you are.
In this blog, I have been speaking directly to those partners who have not yet started a lifecycle practice. The reality is that every Cisco partner is different and in varying stages of building their lifecycle practice. The good news, Cisco’s partner lifecycle enablement program is flexible. We will meet you where you are today: whether it is “Manage it all for me distributor,” or “Please join me distributor managing my lifecycle practice with me, or “Let me manage it myself.”
Cisco distributors can help you to transform and thrive, no matter what stage you are in the lifecycle. Let’s begin this journey together to ensure both you and your customers’ success.
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