Why are only 20% of partners driving 80% of your channel revenue?

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Most businesses that work with channel partners enter the relationship to grow revenue. The desire is that each partner will generate leads and deals from their current clients and connections. The hope is that partners will actively market to grow the number of deals beyond their current connections. In reality, not every partner is able to achieve these expectations. In fact, only 20% of partners generate 80% of channel revenue. 

There’s a reason for this — The Pareto Principle. It says 80% of results come from 20% of the effort. This rule applies to partnerships, too. 

Most companies will sit back and accept this as their reality. In our experience, we see underlying problems that keep partnerships from breaking through this barrier.

  • Most partners lack a clear sales process to be able to sell your product or service. 
  • Your product or service needs to fit into the partner’s marketing capabilities.
  • You have limited bandwidth to support partners equally.

What makes a successful partnership

Partnerships are successful when they align with both companies’ goals. In most businesses, success is measured by revenue. When you’re looking to create successful partnerships, consider these factors:

  • Trust levels: First, you must trust the business with which you’re partnering to do the right thing for you and themselves. 
  • Willingness to communicate: Partnerships require easy, consistent communication to keep teams apprised of the latest company developments and direction. Treating partners as an extension of your team is a great way to think about the level of communication needed.
  • Follow-through: Any company can say they’ll do what you need. Look for those who can demonstrate their effectiveness at coming through for their partners. Partners will focus on the companies that are giving them mind share. 

That seems easy. Why can’t more than 20% of partners contribute more revenue again?

If you follow the success factors from the previous section, then every partnership can be successful. If your company is small with a handful of partners, then you can easily manage. If you have hundreds or thousands of partners, on the other hand, execution is really hard. 

  • As mentioned earlier, companies with partner or channel marketing and sales teams have more requests from partners than they can ideally manage. You end up focusing on the top-performing partners and making sure they have a clear understanding of sales and market development processes.  
  • Partners do not sell your product or service exclusively. They tend to focus on what is easiest to sell. If they don’t get the right information or collateral at the right time, they will move on to the next company.
  • Partners need to know how to sell to their current customers, and they also need help to fill their pipeline. The companies that can fill their pipeline become invaluable because it helps them grow. This can be challenging. 

How do we overcome this and engage all our partners?

To overcome the Pareto Principle and engage more than 20% of your partners the right way, you need to make sales enablement and marketing programs scalable across all partners. Here are a few things to keep in mind while you develop or revamp your partner program:

  • Make life simple for partners. Use a PRM to communicate and share information. Ideally, choose one that uses automation to co-brand marketing collateral and make things easy for them to share.
  • Fill your partner’s pipeline. Provide complete lead generation marketing programs they can implement easily. Provide funding to support their marketing programs. 
  • Help them close. Share leads so they feel you have a vested interest in their success and enable their sales team to close deals and sales efforts. Measure everything: Data will give you insights on which partners need more help. It also shows you which marketing collateral and campaigns are working and which need addressing. Get attribution to make sure you reward partners correctly for generating leads and deals.
  • Make it easy for yourself. Use a platform to scale these items for each partner. Otherwise, you’ll be stuck with the 80/20 rule. 

xAmplify replaces friction with automation to help partnerships scale marketing automation and sales enablement across all your partners — not just 20% of the most active. To see how xAmplify can improve and amplify all your partner relationships, request a demo.