3 Signs It’s Time to Break-Up with Your Channel Partner
No channel partner relationship is perfect. In fact, there are guaranteed to be moments of disagreement, upset, and other temporary tribulations that leave you shaking your head. However, a strong initial understanding of one another’s goals and a proactive channel manager who maintains open lines of communication can often overcome such situations.
That being said, we all know that not all relationships are meant to last and, sometimes, the wisest choice is simply to kick ‘em to the curb. But how do you know when it’s worth putting in the extra effort and when it’s better to say goodbye? Here are three pretty good warning signs of the latter.
Dissonance in Objectives
When picking your partners, you’ve got to investigate their existing customer base, procedures, and culture to ensure that working together will be a synergistic relationship. However, over the course of your relationship, partners can come under new management or go through growth changes, during which such organizational facets can change.
Sometimes, these changes can lead to dissonance between the vendor’s desired sales methods and the channel partner’s ability to appropriately capture such methods. Certainly, if this partner has been a valuable and progressive asset, it’s worth trying to reign them back in or adapt your own expectations. However, if you’re unable to mitigate this type of conflict, it’s best to transfer the relationship before your customers become confused about your brand.
Overly Dense Partner Territories
The best way to avoid this is not to embrace it in the first place. However, sometimes things happen, channel partners grow, and suddenly you realize that you’ve got more than one partner covering the same sales territory. In some cases, 80% of a vendor’s revenue is only coming from roughly 20% of your partners, but overly dense territories can still be an especially dangerous situation.
First, when partners realize that they’ve been pitted against other partners to compete for the same targets, they may rely on price concessions as a means of winning out. While minimizing profits, this can also confuse customers and cause them to hold out on a purchase decision because they are concerned with getting the best deal.
What’s more, if there are too many partners vying for the same sales targets, a competitor who is trying to break into the market may become an attractive prospect. In other words, your partners’ motivation and commitment to you may fall quickly and dramatically, in light of fewer suppliers on the part of a competitor’s product. Before such occurrences negatively impact you, it’s best to cut your losses with the least influential partner in the area.
Communication is key to any relationship. Think I’m kidding? Just ask your spouse. This absolutely applies to channel partner relationships. There’s got to be consistent, two-way communication between the vendor and the partner in order to ensure that everyone’s on the same page.
If communication expectations aren’t being met, or a channel partner seems to have completely tuned you out or refuses to respond to information requests, this is probably a good sign that things aren’t going so well. While you have to assess the situation on an individual basis, a partner who refuses to communicate with you likely isn’t a very strong asset.
Engaging channel partners requires a lot of organization and a commitment to meeting expectations. While it doesn’t require that you be a social butterfly, you’ve got to keep tabs on exactly what’s going on. By monitoring and measuring closely, you can be preemptive about ending a relationship before things get too rocky or their actions negatively impact your brand.
About the Author: Jason Jacobs is a serial entrepreneur, visionary leader and seasoned high growth startup CEO specializing in launching technology and technology enabled services companies. He is CEO of Channeltivity, a leading channel management SaaS for emerging and mid-size companies, as well as Founder and President of The Verge Group, a consultancy that identifies potential and accelerates results in early stage companies.