Tying it Together Across the Lifecycle

As my colleague, Marc Surplus, notes in a recent post, the year brought significant focus on developing and rewarding a lifecycle approach through our program portfolio.

We can all agree that it’s easier and cheaper to expand a relationship with an existing customer than it is to land a new one. No longer does the sale stop at land, or end with the transaction. Instead, we help customers achieve their business outcomes and build lasting relationships with close engagement throughout the lifecycle: Land, Onboard, Implement, Activate (Use), Adopt, Expand, and Renew.

Partners who support their customers through the lifecycle deliver increased value and benefit with improved results too. We have found that our Lifecycle Advisor partners earn 2.5x the bookings growth, 20% higher recurring revenue, and 3x renewal rates through having a strong customer success practice. A lifecycle approach establishes a strong end user customer relationship and opens the door to further sales opportunities.

Partners who can capture 90% of their renewals have 3-4x more revenue growth than partners who don’t. IDC projects that 96% of net new spending on hardware and software through 2021 will come through subscription pricing models. Moreover, of the $147 billion in anticipated growth from the beginning of 2018 through 2021, only $6 billion will be spent via traditional on-premise license and maintenance models. (BCG, Cloudified Pricing—Coming to an Industry Near You, May 24, 2018).

Here’s how Cisco helps partners land and expand subscription-based sales, embracing the lifecycle:

Enabling Partners for Digital Demands

In August we rolled out our first new business specialization, Customer Experience. The Customer Experience Specialization enables partners to build a customized roadmap to develop their practice focusing on the people, selecting tools and systems to manage their customer base, and enhances their support processes. This roadmap provides a path and is built to be flexible with a partner’s business.

Customer Experience Specialized partners can achieve incentives and rewards for additional investment into their practice. Their earning potential is enhanced in VIP Annuity, Lifecycle Incentives, and CSPP.

Incentivizing to Grow Customer Relationships

With our partners’ input we designed our Lifecycle Incentives reward for customer engagement at every step – Use, Adopt, and Expand. Lifecycle Management provides a reason to interact with customers with greater frequency and lends insight into a customer’s state of mind and upcoming purchase decisions delivering enhanced outcomes. We incentivize partners to upsell, cross-sell, and otherwise grow an existing customer relationship, while identifying opportunities for adding value to the customer equation at key points in time. Early FY20, we announced Solution Starter, which gives customers entitlements to engage partners for Onboarding and Implementing Activities – and partners earn when they do.

When partners invest in their practice with specializations, we invest in our partners by providing the opportunity to earn expanded awards.

Services for Business Outcomes

Cisco is dedicated to accelerating our partners’ growth and empowering them to deliver world-class solutions, generate on-time renewals, while strengthening relationships with customers. The Cisco Services Partner Program (CSPP) provides a globally consistent framework that defines our services relationship with partners. This past year we have been focused on simplifying the program and driving closer alignment with Cisco. Here are a few of the changes we’ve made to the program.

We’ve moved our partners from an existing renewal rate metric to an In-Quarter Renewal Rate Metric (IQRR), a more precise measurement to track renewals aligned to Cisco’s own measures. We’ve also introduced a new Multiyear reward to assist partners in establishing a robust life cycle strategy with customers thereby helping lower SGA costs for partners.

In our third quarter, we’ll be starting a promotion to reward partners who are selling the new CX Success Tracks. Partners who have attained either the Customer Experience Specialization or Advanced CE Specialization will have greater benefits, given their investments in customer success.

Strengthening our Partnerships

Cisco’s programs are designed to help partners build their lifecycle offerings, scale their practice across the lifecycle, and differentiate themselves in the market, while working to achieve the customers business outcomes.

Throughout FY20 we will continue to enhance our programs to enable and reward across the customer lifecycle, supporting our software and services strategy to deliver business outcomes while helping our partners grow profitabily.

I’m looking forward to Partner Summit and providing more detail on our plans for FY20 and beyond.

Partners with a Cisco.com account can catch up on the happenings through Virtual Partner Summit here.