Vendors Demand More From Partners, But Are Willing to Invest

Vendors increasingly expect more out of their channel partners, but are willing to invest accordingly.

That’s according to a report from Alexander Group, which provides revenue growth management consulting services. Its Partner GTM Benchmark Study compares total company revenue with channel revenue growth rates. While company YoY revenue growth figures averaged 10.4%, channel revenue growth was 24.9%.

With the channel delivering higher revenue growth, vendors subsequently expect more from partners, it said.

“In a competitive market landscape, channel sales are increasingly critical for vendors as a valuable opportunity to increase routes to market. As we saw from our research, the year-over-year channel revenue growth rate for companies with leading channel programs was 2.4 times the YoY growth rate for total company revenue. Due to this growth potential, companies increasingly expect more out of the channel and are willing to invest accordingly,” said Ted Grossman, principal at Alexander Group.

Alexander Group's Ted Grossman

For selling more products, vendors expect pre-sales collaboration to help close deals. They also expect partners to source upsell and cross-sell opportunities at existing end-customers, and find opportunities at new end-customers.

For service delivery, vendors said partners should provide solutions as part of a managed services offering. They should also enable partner-led services delivery “as a win-win to broaden vendor reach and boost partner profitability.”

Vendors Helping Partners Deliver Revenue Growth

For their part, vendors are updating their partner programs to increase partner autonomy and ease of doing business. Forty-four percent are have gone through a major partner program transformation within the last two years. Another 36% are building a new program but have yet to launch. Zero are satisfied with their current program.

Partner programs are adapting to offer:

“Vendors may invest both in dedicated channel resources and in prioritizing quality channel relationships for greater customer engagement,” said Grossman. “For example, vendors may provide solutions as part of a managed services offering or engage in pre-sales collaboration to support deal closure.”

The report noted that vendors are increasing their number of routes to market to collaborate with channel partners across sales, services and build capabilities.

Vendors now also value deeper and stickier commercial relationships prioritizing quality partners over quantity.