Working with a partner directory can enhance loyalty, reduce churn, and boost your sales. Here's how these work.
Updated May 1, 2024.
What is the underappreciated secret that fuels the growth of SaaS companies?
Preventing churn.
If you can increase your retention by just 5%, you may increase your revenue by 25-95%. Suffice to say, customer retention builds a solid foundation for growth.
However, retention has been falling across the SaaS industry. As SaaS products get more complicated, customers lack the platform expertise to capture the product’s full benefits. This knowledge gap increases the odds that customers will churn.
The knowledge gap is a particular challenge for long-tail customers (SMBs). These smaller accounts are less likely to have their own experts in-house, and may not spend enough per month to qualify for traditional customer success.
To close these knowledge gaps, particularly for long-tail customers, SaaS companies are turning to partner directories.
Simply put, a partner directory is a list of a company’s distributors, integrators, or third-party service providers. It offers your customers an easy way to get in touch with reputable people who can help them buy or use your products.
For example, many SaaS platforms include a directory of agencies that specialize in their platforms. Google has a partner directory with agencies that can help their clients boost their Google Ads performance.
We’ll go through a few other examples of directories later in this post, but first, let’s talk about how directories can reduce churn, delight customers, and encourage your customers to use your product more and see the value your product provides for their business.
Partner directories offer several benefits for SaaS companies:
Remember the knowledge gap between customers and your platform that we mentioned earlier?
With a directory, you provide customers with a list of freelancers, agencies, or products that can fill that knowledge gap and make sure your customers experience the full benefits of the platform.
As an added benefit, you control which third-party providers are listed in your directory. You can create or grow your certification program for third-parties, and provide training to make sure that customers are getting the latest updates from service providers. You can also provide access to beta tests and collect feedback from your service providers.
Your customer success team can provide technical support and educate customers on how to use your product. However, without subject matter and industry expertise, it is difficult for success managers to guide your customers on the ways that your product can help them achieve their most important goals.
With a directory, you can provide your customers with a diverse range of subject matter and industry experts. With hundreds or even thousands of providers, your customer is more likely to find a partner who understands their unique challenges and how to use your product to solve them.
That specialized support can make all the difference between a customer who churns, and one who uses your platform for years to come.
Service providers in your directory can help your customers improve their implementation of your product, and maximize the benefits that customers experience. As a result, well-executed directories can boost brand loyalty and enthusiasm for your product.
The best directories are mutually beneficial. You refer business to high-quality, ethical service providers in your space, which makes them more likely to refer business to you. Partners, customers, and SaaS platforms all win.
Depending on your directory structure, directories can even boost your revenue. You can take a cut of service providers’ fees, or even scale to provide your own services over time.
While there are many impressive potential benefits of directories, we have heard from a number of SaaS platforms that their directories underperform expectations, and fail to deliver the expected results.
We have identified a few issues that compromise the effectiveness of provider directories:
Even in the best-run marketplaces, leads are unevenly distributed among partners. Most work goes to a small percentage of partners with the right placement or industry experience. On the other hand, many partners only want to work on large deals, which makes it difficult for customers to find support with specific or small tasks.
Quality control is one of the most significant challenges of provider directories.
Vetting the service providers who apply to your directory can quickly become a time-consuming, difficult process. However, without vetting providers, you may introduce customers to the same unethical, fly-by-night service providers that your directory should protect against.
Even when vetting is done well, there can be a significant quality difference from one third-party provider to another.
Vetting also does not guarantee that the partner will continue to provide high-quality work after the vetting process is complete. However, it is difficult to monitor and correct the quality of work done by third-party providers.
The next problem is the directory offerings. With a collection of third-party providers, each company and freelancer has their own service offerings and pricing structure. Looking for the best provider at the right price becomes an overwhelming experience for your customer.
Your team also loses visibility into the services your partners offer and how they can benefit your clients. When you implement a directory to improve customer experience and reduce churn, that lack of oversight can keep you from reaching your goals.
Both of the challenges we previously discussed (quality control and differences in cost, offerings, and procedures) contribute to the biggest reason directories fail: customer experience.
Yes, we are talking about how to implement a directory to improve customer experience, not harm it. However, if your directory isn’t designed well, it can do more harm than good.
Your customers are overwhelmed. Some want to interview multiple experts and compare pricing structures to find the best service provider for them. However, most simply want the quickest, easiest solution to their problems.
Searching through hundreds of service providers, interviewing several of them, and selecting from an extensive list packages and pricing structures is not the easiest solution to your customers’ problems. It’s searching for a needle in a haystack.
Most directories require significant effort from the customer to find the person to solve their problem. That work isn’t worth the customers’ time for smaller tasks.
As such, many directories have a low conversion rate.
Let’s take a look at one of the best alternatives to a Partner Directory: Mayple’s Managed Experts Platform (MEP).
The Managed Experts Platform is the next evolution of the partner directory: an on-demand approach that uses vetted Experts to deliver a consistent, high-quality customer experience.
Customers answer a few questions about their business and industry, and the Mayple AI matches them with the best Expert for their needs. The expert completes a gap analysis of their account, and helps the customer implement key improvements that will boost their performance.
The Experts provide a standardized set of services that are customizable to client needs. All calls are recorded and customers are surveyed regularly so that your team has constant visibility into your customer experience.
The MEP combines the scalability and ROI of a third-party directory with the quality and unified process of a top customer success team.
The most successful companies have put their own spin on partner directories. Here are a few standout examples:
Whatever you need to grow your ecommerce business, you can find in Shopify’s directory. Shopify offers a Service Partners directory that helps its retailer customers find support with everything from 3D modeling to marketing strategy to tax preparation.
The Google Partners Directory lists every Google certified ads agency and freelancer. In addition to supporting customers, Google uses directory listings to incentivize partners to earn Google Ads certifications and follow Google’s guidelines for account best practices; Certifications and monitoring can help address quality control issues for partner marketplaces.
Drift created a partner marketplace where customers can search for service providers who are experts in the other platforms that customers use with Drift (e.g., Adobe Experience Manager, Marketo, Salesforce).
Partner directories can transform your customer experience, particularly for clients who don’t have access to customer support resources. However, you need to design your directory to maintain the highest quality standards for experts and simplify client onboarding.
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