That channel and vendor relationship really matters

One of the things that channel partners need in order to survive and thrive is a good relationship with the vendors they work with. The clue is in the name, I guess. So the good news, at least when it comes to US IT companies, is that more than two-thirds of partners (67%) describe their vendor partnerships as very strong or strong.

According to Partner experience trends 2022 by CompTIA, only 5% view their partnerships with vendors as declining in relevance or weak.

Those are pretty impressive results, even when you factor in the 22% that describe their relationship with vendors as a mixed bag. I can’t say for sure whether it’s any different on this side of the Atlantic, but I doubt it would vary much as the US is unlikely to be a massive outlier when it comes to vendor/partner relationships.

According to the report, the high satisfaction rating is attributable to a couple of factors. Partners have a greater choice of vendors “in a marketplace that has mushroomed as part of the cloud era”. With more choice, there’s a better chance of finding the best fit.

As a result, vendors have had to do better when it comes to recruitment, enablement, tech support, benefits and other intangibles that partners value. “In other words, it’s all about optimising the experience for partners that have options to go elsewhere,” says the report.

Vendors that make the partnering process simpler, from recruitment to support and management, compensation and other aspects of the relationship lifecycle, will improve their channel reputation and their prospects.

The report found that more than one-third of partners (35%) said good partner experience practices were “critical” in choosing a vendor and a further 57% described it as “important”. Only 9% viewed it as a “nice to have”.

There was some volatility when it came to vendor relationships, with 40% revealing they had increased their number of vendor programmes, while 16% had reduced them and 31% were unchanged.

The value of vendor relationships was highlighted in another part of the report, where 40% of  respondents said most of their revenue flowed in as vendor-based compensation (margin points, discounts, etc). This was higher than the 35% of partners who said they generated the bulk of sales via their own internal efforts. Just over one-fifth (22%) benefited from a mix between the two.

The revenue-sourcing ratio was fairly consistent across channel companies of different sizes and business models, “which makes clear that partners still rely on vendors – and vice versa – to balance out their own pipelines”, said the report.

Given the value of the partnership between channel companies and vendors, it was heartening to see that 70% of respondents said joint/co-selling with vendor representatives was a positive, effective experience. Only 15% thought it was a negative experience.

Half of the respondents viewed joint selling as a benefit because it allowed their company to appear bigger to the customer. “Perceived size, scale and resources can go a long way in convincing a customer that your firm is the one to do business with,” said the report.

For some, joint selling is an important consideration when it comes to choosing which vendors to work with because it gives them greater access to potential customers and leads, expands their geographic reach and gives them greater negotiating strength during the sales process.

The report added: “These benefits fall into the category of competitive differentiator for the universe of small channel firms that couldn’t scale otherwise.”