At Channelnomics, we field questions about best practices, partner strategies, and channel programs every day. In the “Ask Channelnomics” series, we answer the questions we receive most often from vendors.
QUESTION: We’re building a new partner program to scale and accelerate our business. What’s the most common failure point when vendors try to operationalize a channel strategy?
ANSWER: Vendors experience several common failure points, often tied to the age and maturity of their partner programs. But in the experience of Channelnomics, most trace back to an original sin: failing to define the purpose and mission of partners within the vendor’s go-to-market strategy and customer experience.
Executive teams understand that partners are an efficient way to scale resources, expand market coverage, and serve customers. Partners also provide economic leverage. They’re compensated when they produce results and can assume customer-facing functions that don’t sit on a vendor’s books. On paper, it’s an attractive model.
The breakdown occurs when vendors don’t clearly define the partner’s role. Partners aren’t an abstract growth lever. They’re an extension of a vendor’s capabilities. As with employees, roles must be defined. Vendors need to specify what each partner type is expected to do, how it engages with the vendor, and how it serves the customer.
Defining that mission is deceptively difficult because it requires strategic trade-offs. Vendors must decide what they won’t do themselves, and that often means acknowledging limits in coverage, expertise, economics, or willingness to invest.
To frame this analysis, Channelnomics uses the ROCKER methodology — Relegate, Offset, Coverage, Knowledge, Expertise, and Relationships. Each element forces a vendor to answer a fundamental question about the division of labor between itself and its partners. The answer can’t be “sales” or “revenue.” Those are outcomes, not functions.
At the heart of the methodology are two questions, both straightforward:
The answers must be operational.
By answering those questions, vendors define the partner’s true purpose. In doing so, they also define the partner’s economic model. Partners don’t build sustainable businesses on product margin and rebates alone. Discounts and incentives rarely generate sufficient profit. Partners must monetize the functions they perform — services, support, integration, advisory work, and lifecycle management.
That’s the mission side of the equation, and it’s where many programs fail. Vendors move immediately to incentives and revenue targets. They assume that the tools used to motivate direct-sales teams will produce the same level of investment and commitment from partners. That assumption is flawed.
Channelnomics advises vendors to begin with mission clarity. Walk through the ROCKER framework. Define the division of labor. Establish how partners create customer value and how they earn sustainable returns. Then build the program around those functions. Incentives should reinforce the mission, not substitute for it.
Have more questions? Our analysts have answers. Send your inquiries to info@channelnomics.com and check out our other Ask Channelnomics installments at Insights | Ask Channelnomics.