Unaligned Is the New Black in Partners
More solution providers and resellers are forgoing vendor loyalty in favor of independence based on their own technical prowess and business savvy. What they lack in loyalty, they make up for in influence.
By Larry Walsh
Vendors often speak about partner loyalty – or maintaining strong bonds that lead to greater operational effectiveness and sales returns through indirect channels. The conventional wisdom is that loyal partners generate more sales and deny competitors opportunities.
Some vendors talk about earning partner loyalty.
Some vendors think loyalty should simply come with the partner relationship.
Some vendors demand loyalty and punish disloyalty.
For many partners, loyalty is a combination of vendor preference, investment, and customer base. They may work with multiple vendors with similar products, but only because they need to give customers choices. They lead with their preferred vendor, a reflection of loyalty.
Increasingly, though, partners are rejecting the notion of vendor loyalty in favor of independence. It’s not that they consider vendors untrustworthy or not meriting their allegiance. No, it’s more about risk management and doing what’s best for their businesses.
These partners come in two forms.
- Partners aligned with vendors, but exhibiting no loyalty
- Partners aligned with no vendors (or distributors)
Aligned partners without loyalty are putting their capabilities and services first. They see their value and viability in their intrinsic technology skills, domain expertise, and problem-solving capabilities. They’ve grown tired of the sales treadmill in which they earn pennies on the dollar for shilling products, and still have to perform services to make money. Maintaining vendor relationships comes with a partnership tax – the need to comply with expensive and distracting training, certification, and performance requirements. Instead, they’re letting the volume resellers – CDW, SHI, and Insight, for example – sell the product, and then they clean up by delivering the services.
Turmoil in the vendor community is the other reason partners are choosing to be independent. Let’s face it; vendors are going through some tough transitions. The evolution to new business models, contracting IT budgets, and disruptive competition is forcing sweeping changes in go-to-market strategies and consolidation. Partners have gone through this before, and such changes in the upper atmosphere of the vendor level mean even more disruptions at the partner level. Instead of going through those changes with vendors, many partners are choosing to sit on the sidelines.
As one increasingly unaligned partner told me, “Why should I worry about their business model and driving their sales. Someone else is going to sell the product. I can come in later and make it all work.”
On the far outside, there are partners that don’t consider themselves partners at all. They are technology and domain experts who apply their skills in making IT work better. Think of them as consultants, if you will, though they regard themselves as specialists. They have close contact with vendors, particularly in research, product development, and support. But they don’t consider themselves partners. A managing director of one such consultancy that supports enterprises around the world recently said to me, “You know, you’re going to have to explain this channel thing to me.”
Some vendors want to call unaligned technology consultants and specialists “influencers.” They have this notion that such companies are helping customers make technology buying decisions; as such, they need to bring these companies into their orbit to effectuate more sales. At one point, that may have been true, when some consultants were compensated for driving sales. The next generation of unaligned companies are showing signs that they’ll recommend a slate of products and technologies, but really leave it up to the buyer to make the decision. The alternative, to them, is getting entangled with vendors, and being exposed to all the turmoil that comes with it.
Vendors need to recognize the potential power and influence of unaligned partners, their reasons for staying out of the partnership fray, and the factors that motivate the advice and counsel they provide their customers. 2112 has worked with several vendors in developing strategies and programs for identifying, attracting, and aligning with the unaligned influencers.
The key to success with this community is simplicity. And, as everyone knows, simplicity is elusive to design and even harder to execute. With a little effort, vendors can craft programs that appeal and engage with the unaligned without compromising their independence. Ask 2112 how this can be done in your channel program: e-mail email@example.com.