After years of trying, vendors now realise that the long-tail of partners (80/20 rule) is not a ripe group of firms that with just the right magic touch will turn into gold partners.
Instead, they are a casual set of companies that are really focused on something else. The epiphany that many are having is that is just fine.
A partner that only comes around once a year to do a deal may still be a loyal partner and you may enjoy 100 per cent wallet share – they just aren’t that into you.
Instead of dumping them, figure out how to manage them less expensively and when that yearly opportunity starts to take shape, go all-in for the time period required to win. Rinse and repeat.
I regularly talk to more than 10 vendors a day, and what I’m hearing more and more is that they now have quantitative evidence which plays into this theory.
They have scientific proof which shows that all the money that they have been relentlessly throwing into their long-tail has not materialised into valuable return on investment.
Against the grain
But everyone thought the opposite for decades about long-tail partners. Even books were written, outlining that they just needed the right mix of programs and the right level of attention.
The common logic was that a $10,000 partner was just waiting and ready to become a $100,000 partner with the right mix.
Today, vendors are learning more as they invest in new tools which can look at these types of partners and provide real-time feedback.
They investigate what they do for a living, they follow them around and build data through artificial intelligence and what they have found is that they are always going to be a $10,000 partner.
The good news for vendors though is that every year that deal is going to be yours unless you screw up, like some vendors do. When partners don’t do enough, vendors are quick to cut them out of the program, which is the wrong approach.
A partner could be focused on something completely different in terms of business model or technology offering but forever, they are good value for that one deal a year.
Perhaps if vendors engage with these partners individually and perhaps go into more specialisation, and offer more support across line of business or sub-industries, geography or technology stack - that approach could turn $10,000 into $20,000 maybe.
That’s what vendors need to do, they have to stop cutting out partners because of revenue.
Change underway
And I’m starting to see that movement now. There’s no gold, silver or bronze and there’s no tiers which means there’s no revenue tier and in many cases, no certification tiers - they all go away.
To target a certain market or sub-segment, vendors must bring together partners large, medium and small specific to those segments and build programs that will make those partners successful.
Vendors must get out of the habit of looking at a spreadsheet and ranking partners from top to bottom. Instead, start breaking out mesh diagrams and enable your partners, speak their language and really provide the air coverage that they need.
Jay McBain leads Forrester's research and advisory for global channels, alliances, and partnerships, leveraging a background in channel leadership, sales, marketing, and operations.
