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Channel Matters Blog > August 2011 > Reward Loyal Partners

Reward Loyal Partners

by Andy Grant
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I have heard so much talk and read comments in the channel press from business leaders in the  IT & Telecommunications industry, about  vendors wanting to become more channel centric and more focused on the needs of their most valued and trusted partners. So why are so many of the big name vendors undertaking partner recruitment programs in an attempt to maintain or increase channel partner revenue when existing loyal partners may offer the best chance for quick revenue gains?

Surely we have all heard of the ‘Pareto principle’ whereby 20% of customers bring in 80% of the revenue? We can easily adapt this statement to vendors and partners too i.e. 20% of partners will bring in 80% of the revenue. So why is there a need to look beyond the lists of partners in the company Partner Relationship Management (PRM) system or partner database? Vendors have the information at their fingertips, or more than likely in their finance system, that will help them identify the top 20% of partners who contribute most of their business.

 I would be willing to predict that some vendor sales leaders will be surprised at the partner names that appear on a point of sale report produced by finance. . I will go a step further and also predict that this list would include a good number of loyal partners. So what do I mean by a loyal partner?

 A loyal partner is a channel partner who only sells single-vendor solutions within a given market such as ‘voice’. They are a company that actively promotes the brand of one supplier in order to make the sales cycle quicker and create a more streamlined experience for the end-customer. Loyal partners should also benefit from accrued marketing funds, additional points towards certification, and in theory a better relationship with the vendor at all levels.

 So why are truly loyal partners often so badly treated by their chosen vendor? Why is there the inevitable roundabout of a search for new $10 million partners who will deliver channel nirvana within 12 months? What is a loyal partner worth to a vendor, and can that worth be truly identified within a global channel partner program? Imagine if this loyal partner only contributed $1m year on year, would they receive all the vendor attention they deserved? I would back five or six loyal partners to deliver the additional $10 - $12 million required inside 12 months rather than a newcomer from a standing start; but vendors still choose to chase the new big money partner.

 I don’t understand why some vendors look outside their own channel first to answer the question “how can we get more revenue?”  Here is a different answer, go and work with your loyal partners! They will immediately give you increased revenue and the only cost is time and energy…oh and maybe a few drinks once you get the P/O from the customer to celebrate the deal. Reward loyalty!

 

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