More Partners Vs. More Focus on Existing Partners

Some vendors believe recruiting more partners will lead to higher revenue growth; the reality is that focusing on existing partners is often more advantageous.

Vendors always want to grow revenue and market share with partners. The conventional wisdom is that more partners equal more revenue, and so vendors will seek more partners in that pursuit.

But when vendors take this approach, they overlook an important fact: Of channel revenue, 90% to 95% typically comes from just 5% to 10% of partners. Rather than diluting resources on recruitment, vendors should focus on developing their existing partner base.

Effective channel optimization requires:

• Identifying partners with untapped market access
• Removing barriers to partner investment
• Creating targeted expansion plans
• Maintaining sustainable wallet share (5% to 10%)

Success in channel sales depends on the strategic enablement of current partners, not continuous recruitment. Vendors that focus on optimizing existing relationships often see better returns than those pursuing partner quantity.

While visiting Singapore, Channelnomics CEO Larry Walsh muses about the issue. Hear his insights in the latest installment of “In the Margins.”