CCC RECAP: The Pros & Cons of Incumbency Protection
November 21, 2023
Posted by: T.C. Doyle
Category: Community Calls
Protecting partners of record has both risks and rewards.
By T.C. Doyle
Vendors often extend incumbency protection to their partners inside key customer accounts, but is it a good idea?
On the Channelnomics Community Call for November, Channelnomics CEO Larry Walsh led a lively discussion on the topic. Given the heightened interest in improving renewal rates, the conversation couldn’t have been better timed.
At Channelnomics, we believe that renewals have taken on new importance based on the following market realities:
Customer acquisition costs (CACs) are high in every tech category.
The service model depends on high renewal rates of 90%-plus.
The cost of replacing a customer for any given product is five to seven times higher than the cost to retain one; for services, the acquisition cost is four to five times higher than the retention cost.