More is better! That’s been the mantra of indirect channel programs within the IT industry for decades. Why? Because as high-tech products and services have continued on their break-neck pace of innovation, product lifecycles continue to shorten.
It’s not always clear what kind of channel partner you need to take your products to market. Nor is it clear which partner business models will be the most successful long-term. So, creating a broader community of partners reduces your risk and gives you more visibility and endorsement in the market. Broad was good for the average tech vendor trying to drive market scale and incremental revenue through indirect channels. But it’s not that simple any more.
In an effort to attract and maintain relationships with the masses of solution providers, channel-centric IT manufacturers and publishers now find themselves with tens of thousands of partners of different business models, sizes, maturity levels. Partner programs have become very complex and costly to maintain. In an effort to create predictable and sustainable indirect revenue, vendors have defaulted to working closely with only a small percentage of their partners.
In fact, 75% of vendors indicate that 20% or less of their partners represent 80% or more of their indirect revenues. In addition, because of the costly nature of engaging “the masses,” the very high-touch model necessary to incubate a new partner relationship and move it from opportunistic to committed has all but disappeared.
The broad portion of channel has affectionately been nicknamed the “long-tail” and is seen as a huge conundrum or incredible opportunity. In order to strike that balance between cultivating broad channel visibility and investing deeply in your top-performers, we have to think differently as a channel community. We have to use the same, if not greater, precision in how we profile, engage and solicit investment from potential channel partners as we do in our end-user branding and lead cultivation techniques.
There are five critical success factors for you to consider as you try to maximize revenue through your broad “long tail” channel community:
- One size does not fit all – Not all “unmanaged” partners are the same; create simple, well institutionalized partner segmentation and profiling processes that your whole organization can buy into
- Build a long-term relationship – Ongoing deep profiling and nurturing activities, driven by the partners’ content needs, are key to creating relevance and establishing your brand credibility
- Create diverse communication – A smart mix of field, phone and digital communication provides that high-touch, personalized feeling of local, co-selling support partners need to build trust and investment
- Invest, but selectively – Be willing to hand-pick key partners with a mix of the right attributes to selectively invest in and groom to be your next top performers
- Create a data-driven culture – To maximize conversion from well-profiled prospect to long-term partner, your organization must get committed to making investment and program decision based on real analytics
The methodologies and digital tools now exist for channel management professionals to apply a high degree of precision in cultivating relationships with the right kind of partner. And, used correctly with an eye toward long-term ecosystem development (not just the next six months’ revenue streams), you will create a distinct competitive advantage.