Navigating Shifting Markets: How Marketplaces Maximize Customer Lifetime Value

By Ideas @ AppDirect / September 28, 2023

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Advisors looking to stay ahead of channel trends need to look beyond new technology alone. The customer’s buying journey is evolving too, and this is driving the popularity of marketplaces.

In August’s State of the Union webinar, we sat down with Jay McBain, Chief Analyst, Channels, Partnerships, Alliances & Ecosystems at Canalys, and Jasper Crocker, Director of Product Management at AppDirect, to explore channel trends and opportunities, and how advisors can meet customer’s increasing appetite for digital channels or marketplaces by leveraging the AppDirect ecosystem and marketplace.

How the buyer’s journey is evolving

Jump to minute 9:40 in the webinar to listen directly

The evolution of technology has impacted just about every industry in some meaningful way. In fact, businesses are increasingly turning to technology to drive efficiencies and solve critical business challenges. This means that more businesses require guidance from a trusted technology advisor to find and buy the ideal solution, ultimately leading to the growth of the channel.

In fact, businesses around the world are slated to spend $4.7 billion on tech and telco this year, and 73 percent of it will go through, and be serviced by, the channel, according to a study by Canalys.

When buyers make the decision to purchase a technology product or service, there’s a great deal of research and engagement required during every stage of the customer journey. Gartner breaks down the six key stages of the B2B buying journey:

  1. Awareness

  2. Consideration

  3. Evaluation

  4. Decision

  5. Onboarding

  6. Renewal

There’s opportunity before the point of purchase and delivery for advisors to help educate buyers on different solutions. Not only that, the most effective advisors are focusing increasingly on the “point of value,” which can come at any time across the customer’s journey.

SaaS has long followed the “land and expand” strategy, which could involve giving away a product for free at first with the intention of converting them into a paying customer. This has expanded into a wider strategy where partners also work closely with customers on implementation and integration with the goal of ensuring customers can maximize how they’re using the technology within their organization.

The role of marketplaces in the channel

Jump to minute 15:55 to listen directly

As customer needs evolve rapidly, marketplaces become increasingly crucial. 

By 2025, cloud marketplaces will grow to more than $45 billion, representing an 84 percent CAGR.  — Canalys

The firm's report also shares that marketplaces are growing at a staggering rate of 86 percent annually, doubling in size each year. In this environment, a new role called Financial Operations, or FinOps, has also emerged. This role serves as a bridge between CIOs and CFOs, merging expertise in finance and technology. FinOps teams focus on creating efficient, integrated technology ecosystems, moving away from fragmented IT approaches. FinOps executives often have a profound grasp of multi-cloud technologies, contributing significantly to marketplace growth as companies strive to develop more efficient tech stacks.

AppDirect Marketplace features that help you add value

Jump to minute 32:35 in the webinar to listen directly

On top of requiring access to a broad catalog of technology solutions through a marketplace, it’s clear businesses want a single advisor to build an end-to-end technology solution for them. Advisors who embrace this trend are expanding and taking a bigger share of customer’s technology spend.

To make advisors more competitive, AppDirect offers marketplace functionality designed for your customers and their end-users, simplifying how they manage and optimize their technology purchases.

The business value of a marketplace is twofold: It reduces costs and enhances efficiency for both IT managers and end users, particularly in deploying, managing, and using technology services and subscriptions.

  1. Invoice managementThis means that customers can see all invoices, both current and older ones, at a glance. These invoices can be easily shared within the company, and it’s a great way for customers to ensure they’re on track with everything. This is also a value-add because it takes some of the administrative work out of managing invoices on behalf of your customers.

  2. Subscription management—The AppDirect marketplace empowers end customers to take control of their subscriptions. They have the flexibility to easily upgrade, downgrade, or cancel their subscriptions, all while keeping a detailed record of these changes over time. This not only streamlines the process but also aligns with the evolving preferences of modern buyers who value the convenience of self-service options. It's important to note that while customers can make these changes independently, advisors remain an essential part of the equation. They continue to play a crucial role in providing guidance and support, but now customers have the freedom to make adjustments on their own terms by simply logging in and initiating the changes they need. 

  3. Browse and buy—In the space of buying software, it’s mostly advisor-led. However, the browse and buy feature allows customers to discover software themselves, giving them greater control and choice. It makes the process of buying software as easy as adding multiple solutions to a shopping cart. Customers can configure accounts and decide how many licenses and add-ons they want. Self-serve options empower businesses to research and purchase technology independently, with the option to consult advisors when necessary. Advisors still earn commissions from these purchases while concentrating on strategic tech recommendations and fostering strong customer relationships. 

  4. Built-in Single sign-on (SSO)— Within the AppDirect marketplace, SSO is seamlessly incorporated for hundreds of services that are directly accessible through the platform. This robust functionality not only simplifies the process but also bolsters security measures. It includes the capability to 'import applications,' even those not directly procured through AppDirect, while still providing users with the same secure SSO method. This translates into a significant advantage for employees, as they no longer need to juggle numerous passwords across multiple applications, reducing potential security vulnerabilities. This integrated approach not only enhances subscription management efficiency for IT managers but also reinforces corporate security measures, ensuring a safer and more streamlined experience for all.

    To discover how marketplaces and the AppDirect platform are elevating customer value for advisors, listen to the full August State of the Union webinar. Explore our free resources to empower advisors for increased sales with AppDirect. Access them now.