On Rad�s Radar

Do We Need More Partners?

By Peter Radizeski, RAD-INFO Inc.  |  December 04, 2014

It is always a quantity vs. quality debate.

A duopoly carrier whose business only works on scale needs to chase as many partners as you can. A duopoly wants as many feet on the street as possible. Microsoft, IBM (News - Alert), and Dell want as many partners as possible because they want to be on every desk. In fact, their survival depends on being on every desk. It isn’t that a smaller carrier doesn’t want as many partners as possible. In fact, most do want more than 400 partners, but is it realistic?

If you are a regional provider or a niche provider (I would put a lot of cloud services and data center stuff in the niche/regional boxes), then it should be about quality over quantity. Why? Reality is that most CLECs and cloud Ccommunications players have less than 60,000 customers (out of the 28 million businesses). So do you need 400 partners to reach 40,000 customers?

Pareto comes in to play on just about every program – 90 percent of the business comes from 10 percent of the partners. So why carry the lower 50 percent then?

It is overhead costs to manage unproductive partners. Too many partners can dilute the brand, too.

When you look at the output of average channel managers, you will see that there is a limit to how many partners they can contact in a given month and a given quarter. Part of channel participation involves engagement. If the channel manager doesn’t communicate with the partner about promotions, new services, etc., the partner will likely not be an active source of leads.

In a region or niche, you want to give your partners every opportunity to make a living. Too many feet in an area will stomp on each other. The best partners have a business plan that align with offering your services. To do so, a chunk of their business will be your business. There is something to be said for scarcity too. Fewer partners doing more business means these partners will be more familiar with your company’s procedures and services. Look for quality over quantity for a great program.

Edited by Maurice Nagle