6 Disciplines To Successfully Scale Net Dollar Retention Through Partners

Amplify Your NDR Potential

Over the next 10 years, partner ecosystems could unlock $100 trillion worth of value for businesses (Accenture, 2018). Scaling a technology enterprise through a partner channel has long been a best practice in B2B technology. With the rise of recurring revenue business models in the B2B technology industry, the partner strategies of companies must evolve beyond the traditional partner-led sales and implementations. 

If your company wants to drive best-in-class Net Dollar Retention (NDR) and has Annual Recurring Revenue (ARR) under the influence, if not direct management, of partners, it’s time to enable and equip your partner channel with the competencies required to create measurable value for the customers they manage. By doing this, you will be able to use your channel to scale NDR, not just net-new sales. 

If your partners aren’t fully enabled and incorporated into how your customer lifecycle drives customer value realization, you may be risking your organization’s potential to scale and drive best-in-class NDR. 

Valuize’s ValueXperience (VX) is the strategic framework that sets the standard for B2B technology companies seeking to enable a connected and collaborative customer lifecycle that will maximize the creation of measurable value for your customers and, as a result, amplify NDR. The 6 VX Disciplines from which VX is constructed can be directly applied to not just your direct customer lifecycle but also your partner-led customer lifecycle.

In this article, we share how you can master the 6 VX Disciplines with your partner channel in order to drive market-leading NDR in your business.

Customer Value Definition & Agreement

Mastery of Customer Value Definition & Agreement enables a vendor and their partners to ensure every customer has an agreed Success Plan that contains one or more target Value-based Outcomes plus a clear Outcome Delivery Plan (ODP) for each VBO.

Ensuring there is a clear, measurable and agreed-upon definition of value established with every customer is the foundation of driving efficient and scalable revenue retention and expansion.

When you have partners leading the acquisition of your new customers, it’s essential those partners take the responsibility of defining and agreeing an achievable Success Plan for each of these customers. 

To enable your partner channel to do this, you must arm them with a set of approved outcomes that they can prescribe to their prospects and customers. These outcomes must be derived from a clear definition of customer value that can be consistently, accurately and scalably delivered by you and your partners. Standardization is critical. In the VX Framework, these outcomes are called Value-based Outcomes. Value-Based Outcomes are prescriptive and measurable product adoption milestones that represent the achievement of quantifiable value for customers. 

Ambiguous, subjective, misaligned or, even worse, absent definitions of what value a customer can realize from the adoption of your product(s) creates significant risk for your organization’s and your partner’s ability to ensure that customers make a decision in favor of renewing and expanding their investment in your product. 

By achieving the VX Competencies connected to this discipline, your partners will remove these risks and create a rock-solid foundation of defined value from which to drive each customer’s lifecycle to success – for your business, the partner’s business and your customers.

Customer Value Delivery Management

Mastery of Customer Value Delivery Management enables a vendor and their partners to execute and govern the Success Plans agreed with each customer.

Partners that stop at just implementing your product for customers will not enable these customers to realize the agreed-upon Value-based Outcomes in their Success Plan. Unless your own Customer Success team has the scale to pick up these partner-implemented customers, you must enable your partner channel to provide end-to-end execution of the Success Plan.

In a partner-led customer journey, there are a multitude of roles, activities, processes, engagement models and triggers across your partner’s ecosystem, and the customer’s own organizational ecosystem, that must be executed and governed in order to drive the customer’s progress towards value realization. 

By achieving the VX Competencies within this discipline, your partners will provide the management and governance required across each stage of the Adoption, Retention and Expansion phases for the customers they’re managing on your behalf.

Customer Value Verification

Mastery of Customer Value Verification enables a vendor and their partners to measure and verify the achievement of every Value-based Outcome in each customer’s Success Plan.

While mastery of the Customer Value Definition and Agreement discipline provides your partners with the foundation for “we will achieve…” with your customers, mastery of the Customer Value Verification discipline provides the partners with the foundation for “we did achieve…” with your customers.

As stated earlier, any ambiguity, subjectivity or absence in a partner’s and/or customer’s understanding of the value that can be realized from adoption of your product creates material risk to you and your partners’ abilities to retain and expand revenue from customers.

To further mitigate this risk, ensuring your partner channel has a comprehensive approach to measuring and agreeing the actual value realized by the customer’s they manage is essential.

By achieving the VX Competencies within this discipline, your partners will be able to provide you and your customers with a verified statement of measurable value that can be used to drive future renewal and expansion opportunities.

Customer Intelligence

Mastery of Customer Intelligence enables a vendor and their partners to create a 360 degree view of every customer and produce leading, lagging, predictive and recommendation-based actionable customer insight that supports the achievement of Value-based Outcomes with customers.

It shouldn’t be news to you that a customer lifecycle that is not driven by a cutting-edge approach to Customer Intelligence will increase risk and decrease opportunity for best-in-class NDR. The creation and application of such intelligence must extend into your partner-led customer lifecycle.

Between you and your partners, multiple data types ranging from core account and contract data through to product telemetry and digital content engagement data must be harnessed. Inevitably, there will be some sources of Customer Intelligence that you own and control as a vendor. Product telemetry data is a common example. In these cases, it’s your obligation as a vendor to ensure your partners have access to this Customer Intelligence. 

The glove can also be on the other hand. There will often be sources of Customer Intelligence that the partner hosts and controls in their systems. For example, if the partner owns sources of digital customer education for which user engagement data provides valuable insight.

Either way, the name of the game here is democratization of customer data between vendor and partner.

Access for and from your partner channel to the right data is one half of the equation. The other half requires your partners to have expertise in what questions to ask of the data and what actions should be taken based on the possible scenarios highlighted by the insights produced from those questions. 

This partner expertise must be consistent with your own. Again, standardization between vendor and partner is key when it comes to Customer Intelligence. A partner that has a different customer health score design that is different to your own will cause a multitude of issues. If in doubt, take the lead as the vendor and prescribe to your partner channel what good vs bad looks like.    

By achieving the VX Competencies within this discipline, bi-directional and accurate insight between vendor and partners into each shared customer will be established and enable more effective and scalable actions to drive customer adoption towards Value-based Outcome achievement.

Digital Customer Adoption

Mastery of Digital Customer Adoption enables a vendor and their partners to design and operationalize a digital adoption experience around each product that creates efficiency and scale for the vendor and partners and faster and easier achievement of Value-Based Outcomes for their shared customers.

It is not uncommon for partners to be managing the long tail of your customer base, i.e. thousands of customers that individually have low ARR values but collectively form material customer segments that have a major impact on your company’s NDR.

The economics and volumetrics of a partner-led customer base like this will mean a digital-led approach to driving customer adoption is critical in your partners’ approach to operationalizing the customer lifecycle. A purely human-led approach by partners will not sufficiently scale across the customers they manage nor enable the profitability their business requires.

Whether a digital-led approach to customer adoption can and should partially or entirely replace the need for partners post customer acquisition is an interesting question that each vendor should consider. Typically, there will always need to be some element of human-led activities as part of a digitally-weighted customer adoption strategy. An optimal balance is often a vendor-led digital strategy which is supplemented by partner-led activities under the Customer Value Delivery Management discipline.

Either way, a digital adoption experience is desired by all your customers, including the ones managed by the partner channel, and provides a quicker path towards value. 

By achieving the VX Competencies within this discipline, your organization and/or partners will be able to operationalize a data-driven orchestrated digital experience focused on enabling all customers to achieve Value-based Outcomes.

Customer Value Economics

Mastery of Customer Value Economics enables a vendor and their partners to measure the effectiveness and efficiency of investments made in driving both customer value realization and Net Dollar Retention.

A successful customer lifecycle that creates value for the triangle of customer, vendor and partner requires financial investments from all sides. A considered approach is required to enable the return from each side’s investments to be positive.

Accurate measurement of the value that each customer realizes from their adoption of your product opens the door for that value to be reconciled with accurate modeling of the investments the customer has made to establish that adoption.

Similarly, accurate modeling of the investments that your partner channel is making in driving customer value realization opens the door for that cost to be reconciled with how you are incentivizing those partners. Ideally, that incentivization is weighted towards the retention and expansion of ARR from the customers the partner is managing.

By achieving the VX Competencies within this discipline, you and your partners will be able to measure the efficiency of how the partner-led customer lifecycle is driving NDR. This will enable a common language between you and your partner channel when it comes to planning and agreeing who invests what towards creating customer value and best-in-class NDR.

Partner Channel Success = Customer Success

Your partner channel is an important nexus between your company and your customers. By empowering them through the 6 VX disciplines, you will enable both your customers and partners to succeed and supercharge your brand recognition, ability to scale and boost NDR growth.

In order to set your partners and your organization up to deliver maximum value throughout the customer lifecycle, you need a thorough understanding of what value actually means to your customers. Follow these 5 steps to building a powerful Voice of Customer program that drives deeper customer relationships and accelerates the achievement of your business goals.