A common lament we hear from companies we work with is, “Our partner program isn’t working.” 

When we dig in deeper, the main complaint is that although they are investing a great deal of money into their partner programs, they’re not seeing the returns; from the inability to attract the right partners to not motivating the partner behavior they were hoping for.  

Defining Success

The first step is to define what a solid partner program looks like. 

Contextually we would expect to see partners so enamored with the program that they are clamoring to sign up and be a part of the success. We would also see the program clearly driving the desired behavior from the partners. Another feature is flexibility so that the supplier can rapidly respond to market conditions. Finally, we would want to see all of these aspects lead to increased trust, satisfaction, and loyalty from partners.

If you’re reading this, though, you already know it can be difficult to achieve these results. And typically, this is because of one (or more) of these six reasons.

Six Failure Points Seen in Struggling Channel Partner Programs

#1 Your value proposition to partners is unclear or not compelling

You have three major stakeholders at your partners: The sales team, the services department, and the executive team. The leader of each of these teams looks at their relationship with their suppliers through their unique lens.

Sales is looking for demand. They want their phones to be ringing off the hook with leads. They want a frictionless engagement on everything from finding out relevant pre-sales information to placing an order to getting support. 

You need to make it easy for them to understand why they should sell your solution, and where (which customer segments, industries, etc). They need to understand the market opportunity, and also need confidence that the solution is solid so they end up with highly satisfied customers and not a bunch of complaints or returns.

Services want to know that you stand behind them and will enable them to put your product in the best light. 

Executives want to know how your solution will impact their top line, bottom line, and cash flow. They need to understand their break-even point and their ROI. It’s not simply a matter of telling the partner owner that you have the most advanced solution in the world if you can’t tell her of him how they will make money selling it. 

The partner executives are also asking does the product work, is there a need and is it reliable. This if followed by examining working capital requirements and time to accretive economics.

#2 Your program and its benefits are ad hoc, opportunistic, or inconsistent

Partners want predictability. In fact, they won’t sell if they can’t count on Go To Market (GTM) predictability from their supplier. Sure, they might sell opportunistically if there is no predictability, but they won’t make investments if they don’t have the confidence that their SG&A, IP, and other investment will not be respected or protected.

GTM clarity is a huge component of predictability. It should be crystal clear where the supplier plans to sell direct, and what roles they want partners to play. In our past, we launched a hard deck to spell out internal and external expectations and guidelines. 

The GTM strategy then drives compensation and incentives, as well as resources such as support teams and marketing funds. Again, the goal is to be predictable so your partners know their investments will be protected. 

Another consideration of program consistency is the length of time of each component. You need to give the partners the confidence that if they jump through the hoops to meet your program requirements, you won’t change them. If you announce a service technician requirement, will you keep that the entire year? If you announce an incentive, does the partner have enough time to earn it? 

We recommend a minimum of six to twelve months for program elements so your partners can make proper decisions and investments. 

#3 Your program is not material 

The key is to look at your programs from the perspective of your partner. Which factors will go into their decision to get on board and truly invest and commit? 

1. Top line - Will this drive incremental sales? How much?

2. Strategies - Will this drive net new customers? How and how many?

3. Bottom line - What expenses is my supplier paying that I don’t have to?

4. Mid line - Will this drive incremental margin? How?

5. Cash flow - In order to get these results, how much cash will I have to lay out? When can I expect to see the break even, and what will my ROI be?

Your program doesn’t have to address every single one of these perspectives, but YOU should do the work for your partners to let them know what investments you’re making, what investments you expect them to make, and what the impacts will be. 

A simple way to look at your program from your partner’s perspective is to “do the math”. 

If you’re offering a 5% rebate, that could be meaningful - or not; it depends on the average order value. For example, if your solution is $1000, the rebate would be $50; on a $10,000 sale, the reseller would earn $500. Neither of these amounts are life changing, game changing, or attractive enough to warrant a change in the partner’s behavior. 

Again, a reseller might take advantage of the rebate opportunistically, in which case you’re paying the reseller for a sale that would have occurred anyway since your rebate didn’t change their behavior. 

#4 Your partner program is too complex 

One reseller we worked with stopped doing business with their supplier because their program was just too complex. In order to comply with the supplier’s requirements, the partner determined that they would have to hire a full time staff member to manage the program. When they did the math, this wasn’t a viable solution.

Can your program be presented on one page? Can everyone in your company clearly and easily explain it? Are program requirements spelled out? Can partners reiterate the value of your program back to you? If you can’t answer yes to all of these, your program is most likely in need of simplification. 

An additional aspect of simplicity is the structure of your program. We’ve seen suppliers offer multiple programs - by partner type (reseller, service, alliance, OEM, strategic, etc.) or product - that confuse the partner. 

What if they sell and offer service? What if they sell multiple products? What does strategic mean?

Without an advanced degree, a partner should be able to self-select into the most appropriate program. 

#5 Lack of program investment 

Another major failure we’ve seen is when the program is not completely supported by the supplier. Perhaps the supplier offers solid technical enablement but doesn’t fund any demand generation. Or, they increase their events budget while cutting back on their enablement budget. 

To be sure, suppliers always need to make tough trade-off decisions. However, there is a point at which a particular investment is not minimally viable. For example, if the rebate budget is not enough to change behavior, don’t even bother rolling it out. 

More importantly, suppliers need to understand that “you get what you pay for.” If you don’t carve out a fast-start budget to “prime the pump” so that newly signed resellers have real demand upon signing your contract, then you can’t expect them to be productive. If you don’t invest in partner playbooks, you can’t expect your partners to deliver consistent or even accurate messaging. 

This channel team must lay out the business case that includes all of the elements needed to recruit, nurture, and grow a cohort of successful partners.

#6 Lack of investment in the right talent

Possibly the most essential element to the success of any partner program is a powerful channel team. Top talent on your partner team can make the most of a mediocre channel program, but even the most flawless channel program will fail without the right level of talent dedicated to building your partner business.  

The individuals on this team need to be able to hold their own with the partner leadership across the board - sales, service, marketing, finance, legal, and owners/managers. They need the right balance between challenging and supporting. They need to know when to push and when to pull back. They need to have the business and financial acumen to build credibility and trust. 

You’ll know you’ve got the right talent when your partner executives ask your channel team for advice beyond your solution.

Are they being sought out to weigh in on compensation planning? Mergers and acquisitions? Expansion into new markets and industries?

We’ve seen too many cases where suppliers under-invest in the talent on their channel teams. They neglect or undervalue the strategic importance of the channel team, and instead settle for “B-players”, unsuccessful direct reps, or other personnel they don’t know where else to fit. 

In each of these six areas, an outside-in view can be valuable. A properly designed  partner program is costly, yet the payoffs are huge when done right. Getting an objective viewpoint can ultimately save suppliers money by mitigating potentially myopic thinking and providing a framework for evaluating and optimizing each component. 

Partners have choices, and being strategic will give you a competitive edge in building partner trust, loyalty, and revenue.