Having too many partners creates inefficiency; having too few increases risk. In the optimization range, market needs, vendor priorities, and partner capabilities align to deliver sustainable returns.
By Larry Walsh
Leadership teams of technology companies — particularly those of larger vendors — often believe that focusing on fewer partners delivers the best return. By concentrating sales resources on high-revenue partners, they expect to gain efficiencies and drive growth.
Conversely, some vendors subscribe to the notion that more is better. They follow the old channel adage of ABR: Always Be Recruiting. Their assumption is that current partners aren’t performing well enough and that the next wave of high performers is just around the corner. The flawed logic is simple: Double the partners, double the revenue.
These approaches represent opposite extremes in building and managing channel ecosystems. Both are flawed because they overlook factors such as ideal customer profiles, the size and complexity of the addressable market, and the risks of imbalance.
As the slide below illustrates, effective channel strategies require population planning that lands within an optimization range. On one end is inefficiency and waste from overpopulation; on the other is risk exposure from overreliance on too few partners.
