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Relayware Partner Relationship Management

Driving Transformational Change in Your Channel Partner Program by Embracing Your Pareto Problem

Posted on October 28, 2014 by John Benecke, Relayware Chief Financial Officer

Those involved in managing a network of indirect channel partners are familiar with the observation that on your value distribution curve, 20% of the partners deliver probably 80% of your indirect channel revenues.

Many organizations have at some stage sought to acquire as many partners as they could in order to drive growth, and now they are faced with an extremely long tail of practically dormant partners who drain significant energy and resources.

The default solution for which there have been countless articles written is to try to improve the selection of partners and in so doing, narrow your value distribution curve. While I am a huge fan of alignment within the channel, are we trying to solve the wrong problem, or at least, not solving enough of the problem? If it were that easy, the problem should have already disappeared?

I believe an alternative approach, based on two separate principles, may help reshape the debated.

Firstly, we all intuitively know that if a business wants to achieve a transformational change to its channel success, culling the “bad” partners from the bottom 25% of the value distribution curve is only going to result in performance that is “not bad.” Furthermore, focusing on top 25% is likely to lead to diminishing returns, since they are already performing extremely well.

The key to a transformative improvement is to identify WHY the top 25% are so engaged, replicate that behavior among the middle 50% and support your partners while making the transition.

Secondly, the principles applied by successful FREEmium SaaS vendors, like Evernote and Dropbox, hold important lessons for channel managers. These companies relentlessly pursued “zero incremental cost” strategies for the next customer they acquired.

Once you have deployed a truly complete Partner Automation toolkit, like Relayware, the cost of on-boarding, training, engaging and collaborating with an your next partner allows you to achieve FREEmium SaaS-like scalability. The Relayware Partner Cloud enables to you to analyze your entire partner channel ecosystem in one place, from both the Relayware system and your other legacy systems. You can learn from the top 25% and make data-driven decisions to employ best practices into the middle 50%, giving you the transformational change you are looking for.

This allows success to breed success.