You can never have too many partners, right?
Well hold on: Technology industry channel chief and thought leaders debunk the idea in the latest Channel Growth Hacking, a bi-monthly discussion hosted by hosted by Kerry Desberg, CMO of Impartner, and Michelle Ragusa-McBain, vice president of global channel and digital strategy with JS Group. Channel Growth Hacking takes place on the second and fourth Thursday every month on Clubhouse, the drop-in social media platform.
“My growth hack idea? Fire [underperforming] partners faster,” says Steve Stewart, the head of channels at Smartsheet.
After years of managing high-tech channels, Stewart is convinced that too many partners weigh a company down, not give it lift. Instead of measuring success by the number of partners you recruit, why not prioritize partner sales output?
“A lot of us in channels management accept the 80-20 rule that says 80% of your sales will be achieved by 20% of your best partners. But most channel leaders fail to do anything about it,” he says.
A better way? Reduce your costs and administrative overhead by eliminating partners that do not perform. You will save money for doing so, and win back time to spend with more promising and higher-performing partners.
This has never been more important than now, Stewart adds, due to the pandemic, which has left some channel companies in shambles. Try as it might, Smartsheet cannot transform a struggling partner company alone with its technology or programs. That’s not to say it doesn’t try. It works with underperforming companies for two solid quarters, providing extra guidance and handholding along the way. If partners don’t generate sales after the extra help, Smartsheet trims them from its ranks.
It might sound controversial or harsh, but the idea is embraced by others, including another recent Chanel Growth Hack speaker, Steven Kellam, senior vice president of marketing and with 360insights.com. 360insights.com is a channel incentives and program strategy and execution company that works with a variety of vendor companies. Like Stewart, Kellam believes vendors waste money on partner companies that do not have the wherewithal to make the most of the investments vendors make into them. This is especially true of marketing investments including MDF.
“You really have to figure out what partners capabilities are,” says Kellam. Those that are struggling as a result of the pandemic stumbled in many instances because they could not market themselves appropriately at a time when demand for partner services was on the rise.
“Vendors give too much marketing support to those who cannot use it,” Kellam adds. “They’d be better off investing that money elsewhere.”
In some instances, that money could be better spent looking inward and addressing internal shortcomings, says Sean Phillips, director of partnerships and alliances for GreyCastle Security. While Phillips generally agrees that vendors invest too much in underperforming partners, he’s a big believer that vendors could get better traction with partners if they made themselves easier to work with.
This is what GreyCastle did when it reformed its own partner program. GreyCastle, for example, trimmed the number of categories that it divided partners into from eight to three after analysis. The company recognized that it was making its life and the lives of its partners overly complicated by counting so many different partner types and allowing for variances in standard contracts. Now it divides partners into three types: influencers, paid referrals and alliances. Doing so saves the company money and rewards it with more time and energy to engage with partners in the field.
“If I have any growth hack for fellow channel leaders it is this: wage a war on complexity within your own organization. You and your partners will be better for it.”
Neil Darling, president of RingLeader, a VoIP company, agrees. Darling’s company believes in the importance of taking time to properly align products with a focus toward frictionless demand generation to benefit both partners and their customers.
“If providers generate market demand, then channel partners will fulfill demand — and not the other way around,” says Darling.
Finally, Donagh Kiernan, CEO of Tenego Academy of Cork, Ireland, weighs in on culling excess partners from programs. While not opposed to the provocative idea, Kiernan agrees vendors must look inward to determine if they might be the reason why partners underperform.
His company, which provides guidance to vendors and helps support their efforts to share partnering best practices, advises clients to hone their value proposition. Many, he notes, have done so with exquisite detail when it comes to customers. But some fumble with the basics when it comes to the channel. Many vendors, Kiernan notes, don’t take the time to understand how partners will make money with their products or services, or why they would embrace the company over a competitor. (For more on Kiernan’s thoughts on this topic, don’t miss Impartner’s new Channel 101 blog series for early stage practitioners.)
Manage your channel ranks as efficiently as possible, Kiernan agrees, but take an honest assessment of your own business. If your value proposition is wanting, your processes lacking or your automation full of friction, then take steps to fix what’s wrong with you.
Be sure to join us next time on Channel Growth Hacking. If you’re wondering how you can take complexity out of your channel partner program, sign up for an Impartner demo a today.
T.C. Doyle is the Channel Growth Evangelist at Impartner, the leader in channel management and Partner Relationship Management (PRM) technology. A journalist, book author and analyst, Doyle has worked in media for three decades. As channel evangelist, Doyle produces podcasts, case studies, e-books and more for Impartner. Doyle can be reached at [email protected].