Most Cloud solution vendors are selling through Partners (* 53% Softletter Survey Dec 2019) and most want to recruit more “born in the cloud” Partners. The problem is that demand outstrips supply many times over and this applies in all regions we estimate by a factor of 10! Secondly everyone wants to recruit the “successful” cloud Partners and most successful Partners tell us they are resource bound not opportunity constrained, even if they were interested in more Cloud based solutions. Finally most Cloud vendor value propositions are very similar and margins are typically in the same 15-30% band*(Softletter Survey shows 90%).
2 Double whammy of Recruitment Efficiency and Partner Effectiveness decreases performance to 10%
Old habits die hard, we know that Partner performance since the 1990s the ratios remain the same with 20% of Partners producing 80% of channel revenues. Recruitment efficiency ratios remain typically the same too with more than 50% of Partners recruited failing within the first year. So let’s look at the simple maths; if you recruit say 10 new Partners, 5 will fail to engage and/or be properly enabled. Of the remaining 5 only 1 is likely to be a significant effective performer! Overall a 10% success rate, given the cost of the recruitment and enablement, plus Partner management this is not a great Return on Investment.
3 No silver bullets but new approaches can make a 30% channel performance improvement a realistic target for 2020
Many cloud solution vendors are already starting budgeting and planning for 2020, only 145 days to go.
So you could plan for more Partner recruitment, given the average cycle time from campaign to revenue is typically 9-12 months you would need to start soon! We suggest a more structured approach, this is based on our experience but rarely heeded as people look for silver bullets!
The elements consist of: a structured assessment of your existing overall Partner performance, Partner performance improvement planning and a revised approach to Partner engagement and enablement.
*Typical performance results from a recent vendor Partner program “ Recruited Partner success rate 15%, Partner effective enablement 22% and Tier 1 ARR performance 20% to 23%”. This top down cascade of improvements yields overall improvements of 30% without recruiting any new Partners in 2020.
So before you plan to recruit more Partners or budget for more enablement we can offer a free exploratory discussion to see how you can change your Partner performance ratios to meet your 2020 KPIs.