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Top Ten Reasons Partner Programs Fail
By Marc Zasada

November 27, 2002

All successful technology organizations share a common characteristic: robust partner communities. According to management guru Peter Drucker, “The greatest change in corporate culture — and the way business is being conducted — may be the accelerated growth of relationships based on partnership.” A recent Accenture study concluded that 82 percent of technology executives view partnerships as the primary channel for future revenue growth over the next two years.

Nurturing effective partner programs, however, is both art and science. The path to success must be paved with more than good intentions — and much more than a set of criteria for others to become your gold, silver or platinum partner.

The first edict is to understand the nature of the beast. Partner programs provide a systematic, standardized method for working with dozens, hundreds or thousands of partners — and provide your partners with a like method of working with you. This “one-to-many” model stands apart from strategic alliances, which by nature are built around ad hoc, one-to-one relationships; and the issues are often substantially different.

Starting from this understanding, experience offers some insights into the most common reasons partner programs run aground:

  1. Confusing means and ends. Partner Programs are not goals unto themselves, and must not become irrelevant to the real business issues in the marketplace. In the excitement of creating a program, its raison d’etre is sometimes lost, resulting in a lot of logos on a partnering Web page without any business benefit to the parties involved.
  2. Mixing apples and oranges. Not understanding the difference between the A-List and the B-List, or “Managed Partners” and the “Affiliates.” Key partners need customized, strategic approaches — and large groups of affiliates need a simple, structured way to do business with you. Don’t confuse these two very different kinds of partnering. Strategic alliances are not partner programs; they don’t live on the same continuum &3151; each is distinct and merits thoughtful management in its own right.
  3. Whose goals are they? To ask the question is to acknowledge the problem. Not recognizing that the goals of your partners are always different than your goals. This is toughest for the very biggest companies, because you are often leading a “hearts and minds” battle of one kind or another, and it’s hard to understand that may not be enough for your partners. You must deliver on partner goals if you want then to continue to work with you, and to promote your interests.
  4. Leaving the bumps in the “solution sales” road. Not recognizing that it is difficult to create a seamless experience for a customer working with a variety of “partnered” vendors, and not creating the infrastructure needed to provide that seamless experience.
  5. Favoring structure over substance. Focusing on the programmatic structure of the partner program, or the niceties of “the deal” instead of the strategic goals of the partner program and the long-term relationships with partners. Remaining mired in fussy details provides a sure shortcut to failure.
  6. Meaningless metrics. The number of partners doesn’t matter, and sometimes even direct partner revenue generation doesn’t matter. A program with 100 participants may be a failure, and a program with a dozen may be a success — it all depends on the strategic goals. You may have a “partnership” relationship that is losing you money on the face of it, but which is critical to your market position. Like any relationship, only those inside it can really understand it.
  7. Trying to dispense with the personal touch. No program, no “relationship software,” no high-budget marketing events can replace a handshake. Every partner needs someone at your company who will take his or her call and make the partnership make sense — even if that individual is just one of thousands of partners.
  8. Leaving your own house in disorder. Often partner program managers fail to deal with internal barriers to partnering (finance, legal, sales and administrative issues within their own company), and fail to reorganize and evangelize their colleagues around partnering. As a result, partners often get one message from the “partnering group” and a different message from others within the organization. Once the “partnering message” is heard and internalized, these barriers become significantly easier to scale.
  9. Layers are for cakes, not programs. Humans love to create unnecessary bureaucracy: complicated gating criteria, PRM software, tiers and levels that no one has the time to understand and cope with. Fight that urge with all the energy you can muster. Simplify, simplify, simplify.
  10. No rubber on the road. Failing to provide a clear and realistic go-to-market strategy for partners. “We’ve got a new technology” is not a go-to-market strategy.

With eyes open and all parties on the same path, it’s that much easier to clear the way to profitable and productive partner relations. As in virtually all facets of business, a mixture of intelligence, patience and leadership can take the partner program manager far.

Do you have a comment or question about this article or the ASP industry in general? Speak out in the ASP Discussion Forum.

Marc Zasada is a senior consultant with PartnerStream, a company that works with technology companies to develop their large-scale partnering programs.

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