Top 10 channel mistakes vendors are making

Vendor channel partner programs and initiatives have come a long way in the last 20 years or so, but there are several things they still do regularly that perturb their partners. Channel advisory organization PartnerPath recently hosted a webinar explaining 10 of the biggest mistakes vendors still make even as the channel has become more important to their businesses.

“Partnering has really continued to increase in importance from when I started in the channel way back in the mid-1990s,” said Diane Krakora, CEO of PartnerPath, during the webinar. “Back then, the channels were ad hoc, everyone found it was hard to manage and the question we got was ‘why would I want to give away margins?’ Today, channel is an executive-level strategic concern.”

Guest speaker Stephanie Sissler, senior research director of channel sales at research and advisory firm Sirius Decisions, agreed. Changes in the market have driven vendors to adopt channel-focused go-to-market models, but Sissler noted vendors are still making errors. The end result could be partners that abandon vendors or are simply not as efficient as they could be.

The top 10 mistakes vendors make when it comes to the channel are:

1. They focus on driving sales. This is the biggest mistake, Krakora said. Although revenue is important, vendors tend to separate their tiers by partner size, which pretty much always means the largest solutions providers and systems integrators are on top. According to Sissler, that has an impact on vendor/partner relationships and the ability to help smaller partners grow their businesses.
2. They stop at technical certification. Go back more than three years, and certifications were almost exclusively limited to technical capabilities. Sales certifications have been gaining traction in that time, but most vendors are still focused too much on technical certifications, Krakora said.
3. They drive partners to start selling as soon as they’re signed up. Although vendors stress training and certification, Krakora said many expect partners to have leads in place within days of signing on as a partner. That’s setting them up be ineffective and likely to “fail miserably” at selling. Appropriate onboarding of partners is still a huge problem vendors are struggling with, she said.
4. They hold on too tightly to their internal processes. Being easy to do business with is important, but when internal processes make it difficult for channel partners to operate effectively, they’re more likely to switch to selling a competing vendor even if they don’t like the product as much, Krakora said. Or as Sissler put it, “Broken processes impact their bottom line.”
5. They expect partners to market for them. “Helping partners market is important, but a channel partner is not going to make a market for you. It’s still the vendor’s or supplier’s responsibility to do that,” Sissler said.
6. They prioritize discounts. Most companies place emphasis on partner discounts, but Sissler noted what partners really care about is profitability. It’s more important for vendors to articulate their partner return on investment, she said.
7. They treat all products the same. Different stages of product adoption call for different routes to market. In early stages, the channel may not be right, Sissler said, but as momentum grows, direct sales becomes less critical as channel sales becomes more important. Additionally, vendors frequently make the assumption that every partner is the right one to sell their products or services, she said.
8. They treat all customers the same. Many vendors create one program for all channel partners, regardless of vertical or company size, Krakora said. “One size does not fit all. That is true,” she added. The result is vendors treat all customers the same because of the way they categorize channel partners. Sissler indicated vendors shouldn’t build a program based on what partners call themselves but instead on how they do business with the vendor.
9. They measure partners on volume. “Obviously volume’s important, but I think it’s important to remind folks that sales is a lagging indicator. It tells us something that happened in the past. I’m not saying we shouldn’t be focused on sales, but that we should also be focused on future indicators,” Sissler said. Krakora recommended value-based metrics instead of volume metrics for measuring partner success.
10. And finally, they set it and forget it. Vendors often fail to continually evaluate their partnering models, programs, structure and tools. By re-evaluating such things regularly, vendors can boost efficiency and scalability, Krakora said.