Customer Experience Kingpins: Navigating Digital Agency Partner Dynamics
~ Written in collaboration with Doug Gould, who deserves most of the credit for the depth on the article´s content! Doug´s startup, partner, and investing experience is rich as it is broad — he led technology and channel BD @ Cloudability, built out the digital agency motion at both Xamarin and Microsoft, and now is a senior member of the AWS startup business development team incubating and growing startups. The fact that he´s also a great guy and fellow wine connoisseur doesn´t hurt (Oregon Pinots ftw my dear friend!) Many thanks for edits, suggestions, and direction…
The term ‘digital agency’ invokes a scene from ‘Mad Men’, where a hungover Don Draper smoothly pitches a new campaign to an eager client. While some vestiges of that romanticized image of creative agencies still persist today, the main strokes that hue their evolved cousins, digital agencies, are certainly quite different. Indeed, digital agencies evolved from creative agencies in response to their customers’ realization that print and visual media were being wedged out by emerging digital media channels. That evolution resulted in service providers that develop applications on behalf of their enterprise clients seeking to better engage with customers, employees, or partners through these new emerging channels . This evolution of agencies was natural in a world where users spend most of their time on their mobile devices, engage in virtual worlds where games are actually avenues of commerce, and are leveraging augmented reality applications as part of their day jobs. Today, ‘digital´ is the single most important avenue for brands to build awareness and sell services to a global customer base. Amidst this backdrop, digital agencies increasingly act as trusted advisors to those enterprise customers, marshalling them through their digital renaissance. SaaS startups should pay attention to these rising power brokers in the enterprise for the simple reason that their influence on the C-Suite is growing. With that in mind, startups looking to navigate the channel with digital agencies need to do 3 things:
- understand what motivates these digital agencies
- evaluate which ones truly have clout within their target customer organizations
- evangelize best practices internal to their own companies as to better partner with these customer experience kingpins.
What motivates digital agencies
SaaS companies have to approach partnering with agencies in a manner differently than they have done in the past with players inthe services space. Historically speaking, SaaS vendors first developed relationships with system integrators by necessity, as these players held long term relationships with target accounts. Remember that traditional SIs emerged out of the need to integrate disparate systems and patch functionalities together. SaaS, by its very nature, requires less expert services and continued maintenance. Therein lies friction with traditional SIs looking to milk services work for complex systems that require managed support and implementation. Let’s also not forget that the SaaS playbook more often than not dictates that support and best practices consulting are usually handled by customer success executives who are incentivized by high NPS score; reduced churn rates; and healthy renewal proportions. Where do agencies come to play then? ´Early on we struggled to rationalize building a partner program for agencies as the very nature of Algolia´s product offering and positioning required less development efforts from third party agencies,´ noted Ben Digne, who headed commercial sales at Algolia, a search as service vendor. ´How do you incentivize agencies who make money by the number of man hours they bill to end customers?´ Indeed, speaking the language of SIs — ´how many consultants are working on any given number of projects?´ — is myopic in light of the fact that digital agencies deliver and sell projects differently.
With this context in mind, SaaS vendors have to find a narrative that fits in within the larger one pitched by digital agencies because their advice is held in such high regard by their customers. Digital agencies by nature recommend to their end customers the best technologies that will impact their customers digital experience in the best way possible. While each component of a customer experience (UI, search, analytics, A/B testing, etc) require minimal integration work, when they are amalgamated as part one of larger initiative, digital agencies are able to embed multiple billable roles within their customer´s team: scrum master, product owner, designer, UX consultant to just name a few. Agencies are smaller and more nimble, but each individual talent garners premium rates. They care about the holistic customer experience, which require a different type of professional services, one akin to a hybrid consultancy and design engagement model. With that in mind, SaaS vendors must tailor their story to fit within that larger tapestry of solutions recommended by the agency if they are to make themselves relevant to their consulting partner, and consequently, top of mind in their end customer pitch. If the SaaS vendor´s offering helps the digital agency´s larger value proposition stand out, it will make it into the fold of the agency´s pitch. For the agency, the whole is in fact greater than the sum of its parts; for that to be true, every part needs to be valuable on its own, and complementary to the other constituents. Make sure your pitch touches fits within this broader context.
How do you know if an agency has clout?
In light of the fact that digital agencies have different characteristics than other types of services firms, how does a SaaS company best partner with them?
1. Identify the practice leaders whereby your solution might fit within what that technical leader cares about.
Titles like ´Technical Director´ or ´Practice Directors´ are very telling. These personas usually oversee teams of developers, designers, and product owners who collaborate with customers. Oftentimes they partner with the decision maker at the end customer, planning out sprint schedules and deliverables. Practice directors also focus on architecting key vertical solutions: content management, e-commerce, anything pertaining to the category of ´Digital Experiences.´ They have the flexibility and creativity to present end to end solutions, not bespoke components presented separately. In other words, ´practice director´ both maintain the executive relationship with clients, and they often craft the technology strategy that underpins their services. This is the persona that partnership leaders at SaaS companies should target if they are to try to embed their SaaS offering within the portfolio of vendors that practice directors build long standing alliances.
2. Qualify if that practice leader and the agency truly has clout
Once you´ve positioned your startup´s value to the practice director, how do you know if he/she can ultimately influence the customer to evaluate your SaaS solution? Do they have the necessary clout to guide a customer through an evaluation? Usually, if you work with one of the larger, global, well recognized agency brands, you can usually anticipate that they do have the influence to manage that through end to end. But if you are not, it’s your responsibility to qualify the depth of your agency’s relationship with the end customer. Can they point out to work that has already been done on behalf of the customer? Can they speak to the nature of C level relationships at the customer? Do they understand who controls the budget strings? Only clear cut, precise, detailed answers can assuage any doubts in relation to the strength of the relationship between practice director and customer.
3. FOMO is real: leverage the challenger agency to get the incumbent player to react or ride your coattails
Sometimes you find yourself in a position where you don’t have a choice to work with the smaller, more nimble, but less known digital agency. Regardless of the reasons why this is the case, take up the opportunity to collaborate. Do so for two reasons. First of, you could actually win a small deal and obtain a beachhead into a net new log. Especially if you are trying to move upmarket, going through an agency might lower the cost of acquiring the customer rather than going through traditional channels (ie heavy outbound motion with a business development rep). Second, if you win the deal with the small agency, in a key enterprise logo whereby other more established agencies own relationships, you will have succeeded in creating ´Fear Of Missing Out´ in those other agencies. Agencies value above else the recognition to be seen as thought leaders by brands so they can then market their success. Even if your SaaS solution addresses a small pain point, should you be able to market it as avant guardian/´cutting edge´, then the recognition of the development work falls upon to the winning agency — garnering the attention of other perhaps larger actors that did not pay attention to it in the first place. Demand by customers often breeds the supply expertise brought about by digital agencies — use that your advantage to further build out your ecosystem (and in tandem, your market of customers).
Evangelize internally or your external efforts are for naught
Partner teams tend to over-rotate in their diligent quest to ensure that their main external constituents — agency partners — are addressed and motivated to collaborate with their own teams. Before following through with positioning their value proposition to agencies, and building out resources to make those alliances successful, partnership leaders should look inwardly first. Ensure that your marketing teams position your SaaS offering in a way that is intuitive to how agencies think about building end to end experiences. Double check that your customer success teams have incorporated agency knowledge and resources into the playbooks that are implemented to scale adoption. Ensure that you have C-level validation across the company whereby agencies’ success are yours — after all, to go far, go with others, but to go fast, go alone. The former strategy seems more judicious than the latter.
