Diminishing Partner Loyalty Is the Global Warming of the Channel
Low partner satisfaction erodes relationships slowly – and insidiously; vendors should take steps to improve ‘ease of doing business’ before solution providers defect.
By Larry Walsh
Partner satisfaction is a moving target, often influenced by environmental factors. But, historically speaking, solution providers often give vendors middling satisfaction ratings, indicating that they’re open to changing to an alternate supplier or opening a secondary relationship as a hedge.
Some channel pundits would have vendors believe that low partner satisfaction and loyalty scores are an immediate problem, deserving of striking every alarm and calling up additional support (and spending) to reverse the trends.
The truth is, the channel moves at a glacial pace. And partner defections that result from low satisfaction that diminishes loyalty is like global warming – we know it’s happening, but it takes a long time to see the actual change.
The chief driver of partner satisfaction and loyalty isn’t sales or profitability, and it isn’t training and certifications. Partner satisfaction and loyalty stem directly from ease of doing business. The easier it is for partners to access resources, receive quotes, acquire product, and serve their customers, the higher they rate a vendor for “ease of doing business.”
Many vendors understand this – in principle – as “making it easier to do business” is often the first thing uttered when a new channel chief takes the helm of a program.
Unfortunately, recognition doesn’t often translate into action, as action requires investment. This isn’t to say that vendors don’t invest in their channels; rather, they often don’t invest in the things that make a difference to partners. And they’re justified – sort of – based on the data.
For the past several years, partner loyalty – on a 10-point scale – has hovered between 5 and 6. Essentially, partners are saying they’re indifferent, neither loyal nor disloyal. But they could be swayed to move in one direction or the other.
This should signal to vendors that it’s time to make changes that will strengthen their ties with partners, changes that will lead to greater productivity in the form of revenue growth, market share expansion, and profitability.
Again, vendors will make changes to address partner concerns, but oftentimes those changes only address specific symptoms or create rewards for solution providers that are already generally satisfied.
This is where the slow pace of change comes into play. Targeted vendor improvements may not do much to change overall channel satisfaction, which forces partners to develop workarounds to the systems and processes that inhibit productivity. That, in fact, is why some vendors with the worst satisfaction scores have large and well-performing channels: Their consistency in program structure and execution gives partners the ability to develop their own methods for remaining productive.
As a result, vendors get a false positive on their actions, as partners are frequently acting independently and creating their own outcomes. Thus, the vendor’s perception that it’s doing well is reinforced. Worse, vendors misinterpret unchanging partner satisfaction scores and the lack of attribution as loyalty. Their inaction (or limited action) yielded no net difference, so they feel they can take partners for granted.
In their relationships with vendors, solution providers move slowly because they must. The average solution provider doesn’t have the resources – money, time, risk tolerance, etc. – to make radical changes. When working with a vendor, partners make substantial investments over time in staffing, marketing, sales, support, certifications, process management, and customer relationships. Those relationships took time to develop, and they also take time to untangle.
So while vendors are waiting for their channel glacier to calf another chunk, partners are moving to develop alternate vendor relationships, make strategic resource investments, and introduce their customers to new brands. It’s only when the alternate reaches a critical mass that the depth of solution provider dissatisfaction becomes apparent.
Vendors need to treat partner satisfaction and corollary loyalty scores as trends, not data points. They won’t move overnight, just as partners won’t defect easily or quickly. Instead, partner satisfaction is a barometer of how well vendors are managing their programs, the efficacy of programmatic and operational changes, and general productivity. If the scores are steadily improving, vendors know they’re moving in the right direction. If the scores remain static or decline, vendors know they need to rethink their strategic and operational frameworks.
The 2112 Group offers assessment, advisory, and support services tailored to providing vendors with a greater sense of partner satisfaction and loyalty. 2112 specialists will work with vendors and partners to craft better strategic relationships, channel frameworks, and obtainable goals. To find out more about how 2112 can help develop more productive channel relationships, contact [email protected].
Change will come to all things in the channel. In the vendor-partner relationship, though, both parties will put up with a lot of negativity before making a change. But when they do, it’s far from subtle or painless.