Why Marketing Agencies Stop Reselling Software
We worked with Databox to survey marketing agencies on why they end partnerships with software companies. Thanks to Dann Albright, a freelance writer who helps B2B companies reach their audiences more effectively, for writing this piece for us.
When stories are told in the digital marketing world, they’re often told by marketing software providers.
How to be successful. How to avoid failure. Changes in the marketplace. Tactics long dead. New ones emerging. The future.
But, what about the perspective of the marketing agencies that use and resell these tools? The ones so often tasked by clients with the implementation of the software and execution of the work that delivers on the lofty ROI promised by the software company.
Those front-line relationships tell the real version of events -- the stories of mediocre software success, outright implementation failures, outdated feature-sets and unacceptable customer service.
To really learn how to master partnerships between resellers and software companies, and to ensure we are all optimizing for the success of our mutual customers, we need to hear these stories.
So, PartnerStack and Databox teamed up to ask marketing agencies why they stop reselling. Through the stories we heard from 29 agencies, we’ve uncovered the pillars of a strong agency/provider relationship, and perhaps more telling, the reasons that most often lead agencies to fire a software provider and search for an alternative.
“After establishing a relationship with a good software company, you don't want to switch providers lightly,” says Henri Pallonen from Hehku Marketing. “However, from time-to-time there are situations when you just have to make a switch.”
As Pallonen mentioned, it’s not a decision most take lightly, as partnerships with software providers are often instrumental to many agencies’ growth efforts.
According to our research, 48% of agencies say that reselling SaaS is instrumental to the growth of their agency. Another 34% of agencies say it’s “important.”
In terms of the number of partnerships, 55% of the agencies we surveyed say they’ve resold 5 software products in the last 6 months. 15% say they’ve resold 10 software products over the last 6 months.
We also asked these agencies to share the number of partnerships they’ve established with providers. As expected, the results are consistent with the previous question – 41% saying they’ve established partnerships with 5 software providers, while another 31% say they’ve established 10.
What does this all mean? Well, agencies commit a lot of time, resources, and capital toward partnerships with software providers.
So, when and why do they sometimes go south? When is it time for an agency to fire their software provider, move on, and find an alternative?
Here’s what we learned from talking with 29 agency pros.
Lack of Support
“The absolute #1 reason we would consider moving away from a software partner would be a lack of support,” says Futurety’s Sam Underwood.
“In today's customer-first environment, it's expected that software companies, at the very least, have a dedicated customer rep that can return calls or emails within 24 hours to meet client deadlines. We have and would again end a relationship with a software partner if it was clear that providing answers to basic questions wasn't a priority for them.”
Many marketers echoed Underwood’s feelings.
“If myself or my team are having to wait days on end for a support request to be fulfilled, or we face problem after problem with uptime or stability of the software, we will part ways with the provider,” says Ryker Taylor from Wundertre.
Jonathan Aufray from Growth Hackers has similar criteria: “If the customer support is fast, good and efficient, there won't be any problems. If the issue gets fixed and the customer support is responsive, we're usually very happy, whether or not there was a problem.”
“But, when a SaaS company doesn't provide any kind of support, doesn't answer emails or Live Chat, we just fire them.”
It’s not always just a speed issue, says Gretchen Elliott of Ascend Inbound: “Dodging questions, not acknowledging emails, or not being prepared to keep the technology up-to-date are major red flags.”
Some marketers look for even more specific customer support practices.
“If we don't get response, or not in the channel that suits us, I would not see a future for a collaboration with that software company,” says Avidly’s Thoralf Lindström.
And Laurent Ross from Oxygen says that some software companies don’t provide customer service at all.
“In some cases our feedback is ignored or someone from support will send us a link to generic FAQ work-around solution that doesn't solve the issue,” said Ross. “This feels very much like their team 'doesn't care' and it's very easy to move to a competitor as there are so many options available these days.”
Lacking Features or Value
“It is easy to get drawn into demos and implement a new product but it is hard to know if you have made the right decision until you have properly tried and tested the product,” says Dane van Zyl from Uku Inbound.
“We recently had to switch marketing platforms because simple functionality like creating HTML emails, reporting, and social media publishing didn’t work as promised and their support was unable to resolve the issues we were having.”
“We implement new software products to make us more efficient and effective as an agency. Once one or both of these are affected, we start looking for alternatives and move on swiftly.”
Jesse Frye from SparkReaction says that “One of the most common reasons is that the product doesn't offer the value that was being sold during the sales process.”
“In order for a product to be beneficial to an agency, it must help us make money, save us money or help us solve a problem for either the agency or our customers,” said Frye. “If any of these reasons listed above happen, it is likely that we would ‘fire’ a software company.”
“So far, there has only been one reason that has made us sever our relationship with another SaaS company,” says SeriousMD’s Dennis Seymour. “You might think it's the price, but it's not. It's actually being able to follow through with what was promised.”
Delivering Low Value
Sometimes it’s not just about the features, but the cost as well.
“Time and again we found that SaaS companies offered exactly the same services we were already using for free, elsewhere,” says Colibri’s Andrew McLoughlin. “In a nutshell, we discontinue those partnerships because they're superfluous to our needs and often come with a high subscription cost.”
Casey Bowden from Design Extensions agrees: ”We would fire a software company if we are paying a lot without experiencing adequate results.”
Lacking in “Partnership”
When you resell software or partner with a provider, you want there to be a strong feeling of partnership. When that doesn’t happen, it might be time to part ways.
“If the people at the software company don't really believe in the partnership and they only seem to care about how much software the agency sells, the ‘partnership’ fails,” says Nextiny’s Gabriel Marguglio. “Furthermore, if they want to automate everything without engaging personally, we will most likely move on to a company that provides a real partnership of people working together and helping each other.”
Marguglio continues: “Supporting the tool is only part of the partnership. We believe that the agency and the software company should be looking out for each other, creating opportunities for growth together and be willing to create and promote content to help each other.”
Derek Kinzer from Lone Fir Creative agrees: “Partnerships should be mutually beneficial!”
Unfortunately, sometimes everything just goes wrong.
“We joined a beta partnership with a software company,” says Susie Kelley from Spot On. “They told us they had training and materials for their partners to use, but when we dove into it, the training was basic, the material was out of date and incomplete, and they often changed the materials without notifying partners. After several months, we decided it wasn't worth the time to try and keep up to date and ended the partnership.”
“SaaS is constantly changing, so if a software company doesn't have a strong commitment to customer service and feature upgrades,” says Jen Lombardi of Kiwi Creative, “then another competitor will undoubtedly become the better option.”
Empathy First’s Daniel Lynch also emphasized the importance of fast updates: “Lack of new functionality in a constantly evolving digital marketing landscape is reason enough to fire a software company.”
Diona Kidd from Knowmad emphasized the speed of responding to bug reports: “We can understand a few bugs and are happy to support a software company in identifying and resolving them. However, if there are constant bugs that aren't fixed properly, it makes it frustrating and takes away from our already limited time. We've also let a software company go because their data wasn't up-to-date or accurate. Another time waster.”
Not Serving the Client
In the end, you’ve chosen this software company to serve your client. And if they’re not doing that, it’s time to end your relationship.
“No matter how exemplary the products of a SaaS-based organization is, if they fail to impress with their customer experience services, it would be the eventual reason for parting ways with them,” says Mettl’s Ketan Kapoor.
“The bad customer experience has a large spectrum and can involve a number of factors like a SaaS company not providing the requisite features, no regular follow-ups from them even after continuous complaints and feedback, rude or lapse behavior in the resolution of your software-based challenges leading to a gap in your business, or any other issue which continues for a few months.”
Aurity’s Ivana Veljovic says that delivering on what was promised to the client is of the utmost importance: “If priority/critical features that are defined upfront are not developed on time, and because of that the budget and deadlines are exceeded, the client would usually terminate the contract with a software development agency.”
Jx Tan from Momentum Digital adds this: “Clients will take their frustration out on an agency if a recommended software solution doesn't deliver in terms of features or service quality. This is obviously a deal-breaker for most agencies.”
“There have been various situations where we've fired and hired SaaS platforms,” says Kalie Fry from McMahon Marketing. “At the end of the day, our reason behind each of these decisions was scalability. As time evolves, so do our services and the needs of our clients.”
Next Precision’s Zach Coulter also pointed out the importance of growing with the client. “To make a smart software recommendation, an agency has to consider the client’s strategic requirements (current and future).”
Agencies Move Faster than Software Companies
“The most common reason to fire a software company is that you've outgrown the reason you hired them in the first place,” says Eric Quanstrom of CIENCE. “Whether the feature-functionality becomes dated, incompatible with other systems, or other products can better meet your current needs, this outgrowth is way more common (in my experience) than most people believe.”
Quanstrom continues, “The best takeaway for software companies is the need to continually innovate, but more importantly, stay close and connected to the ways in which your solution is used by customers.”
Tyler Pigot from Lone Fir Creative puts it a different way: “I'd say the most common reason we ‘fire’ a software provider is because we aren't using the software. That can either be because the software we hired ended up not fitting the process or system we were hoping it would enhance, or because we used the software at one point but no longer have a need for it.”
How to Make Sure Your Resellers Keep Reselling
If you sell marketing or sales software, marketing agencies are in a great position to help you resell and retain your clients.
But, it doesn’t work if you don’t support them.
As this article shows, they are not asking for much. They aren’t asking for higher margins, more marketing dollars, steak dinners or even a lot of leads.
To keep agencies coming back, you just need to:
- Be available to help them use your product
- Continue to invest in enhancing your product
- Make sure your customers are getting an ROI
- Make sure the partnership is mutually beneficial; make sure you are helping them grow their agency too
- Keep up with the agency’s and clients’ needs
That seems like a reasonable set of expectations of any software company.