3 Factors Dragging Down Channel Revenue

Poor Sales
Relayware's Veronica Brunwin

Veronica Brunwin

By Veronica Brunwin

The tech channel is a remarkably inefficient vehicle. In the years I’ve been working in the channel, I’ve been astonished by the underperformance of vendor programs. Expensive launches result in minimal uptake, MDF funds are wasted, and incentive programs fail to drive sales. Indeed, on first meeting a vendor, we regularly see that only 4 percent of channel sales professionals drive more than 60 percent of channel sales revenue.

How can this be? You may even be saying, “Not my program!”

Let me explain.

Most channel-management professionals are very familiar with the 80/20 rule as applied to channel sales — 80 percent of the revenue comes from 20 percent of channel partners. This 20 percent is rewarded with gold tier benefits: account management, rebates, incentives and more. The remaining 80 percent of partners are treated less favorably, regardless of their upside potential.

Let’s examine top partners more closely, with a lens applied to the organization as a whole. Can we find out who, within those organizations, is actually closing the sales? That means drilling down to the next level, and again, it’s 20 percent of the channel partner professionals at the top 20 percent of channel partner organizations who are driving most of the revenue. Doing the math, that’s just 4 percent of all the sales professionals registered with the vendor’s program who are actually driving the revenue.

What dependency on a few individuals carrying a significant amount of the load! Why is this happening? What is holding back the remaining individual sales professionals?

As I see it, there are three main issues:

  • Inertia. Limited interactions with the vendor and little incentive to change (Symptom: No clarity into what information these sales professionals are getting, or how compelling and varied it is.)
  • Lack of guidance. Vendors often provide a range of tools within their portals but fail to direct partners to the content that is of personal value to them. (Symptom: No insight into which tools are being used by top partners.)
  • Too-hard processes. The whole channel-partner program is propped up by antiquated systems and technology. (Symptom: Everything is slow and dated and partners just don’t bother to interact with the vendor.)

After working with vendors for more than a decade, I have observed three key elements that address the above-mentioned issues and underpin successful programs: partner engagement, partner performance management and streamlined operations.

Let’s start with the first item on this list — engagement. Programs that keep partners coming back are continually communicating, sharing and responding. Engagement drives partners to take action. They receive messages that are personalized to their stage in the partner life cycle and to the deals they are working on, and their vendors provide support and guided selling tools that help them traverse the road to a closed deal.

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Engagement can energize partners, but it’s not enough. Vendors need a 360-degree view of their channel programs with a view of partner professionals — where they are located, what they are selling, their target markets, which tools in your program they are engaging with. That knowledge empowers you to spot trends. You can see not only who is succeeding, but also which partners are not engaging with your program. Then you can properly allocate resources.

Speaking of resources, strong partner programs streamline operations for all. It is possible to deliver both a personalized program for all partners – not just the top 20 percent – and simultaneously have an automated system that keeps each partner professional moving forward at whatever speed makes sense, whether that is moving fast through your training curriculum or downloading the latest marketing materials. The key is to eliminate burdensome steps.

If you’re reviewing your partner program, take a deep look at those select partner professionals who are driving most of your revenue, identify their patterns for success, and create a model that you can apply to the next tier of partners — who are on the cusp of being great. Even a small increase in the number of partner professionals closing deals will have a huge impact on your channel revenue.

Veronica Brunwin has overall responsibility for the Relayware product, driving both its strategic direction and execution of the product road map. She is passionate about delivering a great user experience to Relayware’s users and spends as much time as possible talking to customers to identify their needs, both current and future. Prior to taking on this role, Veronica was our senior solutions consultant, working with customers to deliver successful partner programs using Relayware.

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