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My plumber doesn’t ask me to go buy the pipes when he fixes my leaky faucet. Why do agencies ask their clients to purchase the materials their business needs?
Sunir Shah was fired.
Like many digital consultants, he had to ask his clients to sign up for software subscriptions themselves. One client, an owner of a brick-and-mortar business, told him,
My plumber would never make me buy my own pipes. I expected you to take care of this for me. It’s ten times harder working with you than if I just do all this myself.
It made perfect sense. Why should digital consultants make their clients buy their own equipment?
Because they are terrified of taking on the risk of subscriptions.
Sunir knew this fear all too well. He had heard thousands and thousands of agencies experience the same headaches and issues serving their clients while running partnerships at FreshBooks.
The only logical thing to do was start a new company to solve the problem.
Beyond just referrals
23% of B2B SaaS is sold through partners. That’s a lot of demand from the channel - and it’s growing.
But the opportunity could be much bigger.
For B2B licensed software, a whopping 64% is sold through partners. Think agencies, consultants, or other companies who resell it to the end user.
This relationship is the main reason 80% of the B2B software market is still licensed software, not SaaS. An army of partners around the world sell and implement technology solutions all on licensed software, comprising over $400B globally in 2019 compared to $100B of B2B SaaS.
Pondering the difference
Sunir has been thinking about this for years. He started his career at one of those consultants, a Microsoft Value Added Reseller. When cloud computing came along and changed the equation, the value chain got messy.
Working on partnerships at FreshBooks, Sunir saw a new problem emerging for SaaS companies and their partners like marketing agencies.
It was too hard for partners who loved FreshBooks to sell it to their clients. Like most of us, at FreshBooks and later Olark, he saw referrals as the only tool available for partners, despite the demand from partners to sell.
Sunir puts it bluntly,
You know what’s better than a partner referral? A partner that closes the sale for you.
The root of the problem
It’s really complicated to resell a recurring subscription.
This didn’t seem like much of a problem in the first phase of the SaaS revolution. Companies were able to do direct sales and build scalable, automated funnels. But as the number of tools proliferated, direct channels became saturated. Users became overwhelmed with emails and ads and demos.
They want someone they trust to pick the right tools, and implement and manage them. Like the old days of agencies selling and servicing boxed software, except with more agility, a deeper tech stack, and without the long contracts.
It’s all about the trusted relationship with clients. They wouldn’t have hired an agency if there wasn’t trust there for them to make the right decision to help their business grow.
Agencies are eager to fill this role, but there are big hurdles in that process.
Reseller’s nightmare
The SaaS model means each software tool requires account info, billing, emails, credit cards, and credentials owned by the customer.
Agencies don’t want to wait for customers to enter all this info and go through onboarding. They don’t want to increase their security and financial risk by setting it up under their own name or on their own credit cards. Not to mention the accounting and billing are ridiculously complex when passing the expenses on to clients.
Customers want to own their own data. But they don’t want to deal with dozens of sales calls with vendors or do their own setup of software they expected agencies to take care of for them.
They want the agency to just handle the whole damn thing in a safe, transparent way that allows them to control their own data.
Why should SaaS be different?
People don’t want SaaS tools, they want their problems solved.
Sunir’s former client pointed out that plumbers don’t make you go to the hardware store and pick out pipes. Nor do auto mechanics, homebuilders, barbers, lawn crews, or bakers demand that you get on the phone with their vendors, pick the materials, and enter your credit card information to buy supplies.
Why are agencies still behind in better serving their clients?
SaaS companies are primarily built for direct sales, which makes little sense for customers who are often paying someone else to implement and manage a stack of products.
With partner sales on the rise and direct sales suffering, AppBind has found the perfect moment to reorient the entire market.
Allowing agencies to fully manage implementation and service of SaaS tools for customers means expertise and trust will take precedence over billing, finance, and logistical red tape.
When everyone is empowered to sell, the playing field is leveled.
For agencies, it means they can focus more on their unique skillset and help their clients grow.
For customers, it means they can waste less time on operational tasks and know they’re getting what they’re paying for – trust, transparency, and scalable results.
For vendors, it means they must rethink their funnel to factor in partners, and work to build trust with them.
Indirect sales are making a comeback. Solutions like AppBind, which make it even easier than it was in the boxed software days, will only accelerate the change.
How does AppBind solve the problem?
AppBind builds a partner reseller portal for SaaS companies, complete with a master agency account with child accounts for their clients, billed through to end customers, account transfers, and automatic commission payments.
The most impressive part is that SaaS vendors can turn on an AppBind powered partner portal in one day, without touching their own billing system.
The eureka moment was when Sunir realized that subscriptions can be managed like licensed software.
What’s a subscription?
The email you sign up with and the credit card you pay with.
AppBind simply creates a shared virtual email and a shared virtual credit card your partners can sign up, purchase, and manage subscriptions to your SaaS on behalf of their clients, and then transfer the email and credit card to clients at the end of the project to transfer the subscription.
It provides an instant answer for the partner who says,
I love your software. How do I get it for my clients?
Let them sell software!
Get your software into the hands of more agencies and make it easy for them to sell.
We’re excited to partner with AppBind and provide PartnerHacker members with an exclusive offer of up to 50% off an AppBind partner portal for the first 6 months. Just mention PartnerHacker and they’ll hook you up.
