Although other factors, such as onboarding and marketing support, contribute to many partners failing to generate revenue in a network, much of the issue is that partners are recruited despite being a terrible fit to begin with- is this something technology companies should be concerned about?
The Channel Company, which incudes CRN, Computing, Channel Partner Insight and bChannels, has come together recently to create an end-to-end service to provide more transparent and reliable returns from the IT Channel.
This is the second in a series of blogs explaining some of the biggest challenges facing Channel leaders in 2023 that we will be working with Technology Vendors to overcome, focusing on recruiting partners.
Did you know that, across the channel, 25 per cent of partners have terminated a relationship with a technology supplier in the past 12 months, having never transacted in any meaningful way?
This is perplexing. Signing up new partners to go to bat for you isn't easy - it takes time and resources to attract and sign up each new partner - and one in four leaves each year without returning a penny?
This serves as a warning: current methods will keep the lights on but can't be relied on to accelerate revenue. If you want your channel operation to be a real driver of growth, it pays to understand why partners fail to make the leap from getting their badge to getting customers.
Part of the problem lies in onboarding - too many feel the momentum of a relationship fades rapidly once a partnership has been agreed, so it's important to assess how you interact with partners in the first 12-18 months.
But that doesn't solve the problem that so many new partnerships are doomed to fail because they were never a good fit to begin with.
This wouldn't be a problem, but each partner takes time and resources to recruit that could have been spent elsewhere - so it pays to understand who you're dealing with in advance.
Starting on the same page
Partners may be excited and interested to sign up and collaborate, but that doesn't mean they're ready to be one of your partners.
Some partners don't communicate with the right types of customers for you; some don't have the technical expertise to deliver on projects; and still others have a philosophy and methodology that doesn't align with yours. While some of these things are easier to spot, others are subtle and require a data-driven approach to recognise.
Either way, if your channel team are targeted on the quantity of new partners, rather than the quality of their potential output, then this is likely to crop up time and again.
Ulterior motives
Just because somebody wants to sign up to your partner programme, doesn't mean they'll ever be a good partner for you. In fact, only 30 per cent of instances of a partner joining a vendor network is done for the purpose of a robust financial partnership.
Some of these are decisions of expedience - they venture little by saying less, and after being chased around for months to sign on, then decide it's easier to say yes, just so you'll stop asking.
Other partners will see the opportunity to put your brand logo on their website and sales decks as a great way to add social proof to their work, while hoping they aren't asked to actually learn how to deliver your products.
Others may be more nefarious. They might be keen to see your pricing structures to ensure they are in a position to win business with alternative vendors, or perhaps get an advance look at product roadmaps to help them track their competitor partners.
Timing is everything
When it comes to marketing to our end users, we are all aware of the concept of buying cycles. Typically, only 5-10 per cent of the market is looking to buy at any given time, as they have other priorities to put their resources into, and the pain your solution will resolve isn't significant enough at the moment.
Even if a partner is your type on paper, that isn't the only thing that matters. They could be a good fit for technical capabilities, be capable of driving business effectively and align on GTM strategy, but all that doesn't mean they can work for you right away, if the time isn't right to bring new vendors into their proposition mix.
Ultimately, it's important to remember that the prerogative to have a stable of high-performing partners is yours and hoping is not a strategy; it's up to you to provide the impetus required to make your partnerships prosperous. If you don't do it, one of your competitors might.
