Many leading vendors are already busy reinventing their channel partner ecosystem to deliver a better experience in the digital-first economy.

Jay McBain (from Forrester) does a lot of research on the topic so if you need more context or data points, check out his articles and reports. Several vendors are already working on renovating their partner ecosystems. You can also watch what some channel leaders are saying and my quarterly discussions with Jay on my eChannelNEWS video interviews.

Typically, vendors create channel programs to engage with and empower their partners to become successful. They provide support like training, deal registration, marketing funds and incentive programs to facilitate the sale of their products.

This sounds good, but the reality is that MSPs need to engage with dozens if not hundreds of vendors, stay informed about thousands of products and provide coherent solutions for their end customers. It becomes a growing and daunting task for many MSPs. Most times, they just sell what’s easiest instead of what’s the best-fit solution for their customers.

Since 2020, it has truly been a seismic change in the economy and the way people think. We were all pushed out of our comfort zones and did what we had to do to survive. Now, we find ourselves navigating business and life in a new reality, in a future that is still unclear.

In a recent survey of CEOs, KPMG found that 75% said the pandemic accelerated the creation of a digital customer experience and 64% created new digital business models and revenue streams. 77% will continue the use of digital collaboration and communications. 69% will be downsizing office space. 68% said communications with employees have improved. See the full report.

Tech giants have already figured most of this out. What may be less obvious is why they are getting the crazy valuations. When you start to understand how “Wall-Street” evaluates these companies, it becomes much clearer. Remember, always follow the money…

It basically comes down to building a one-stop-shop (marketplace, ecosystem, community) where everyone who is remotely involved in contributing to the success of the company can come to connect, learn, buy and play. The better they do this, the bigger the valuation. Never forget that it’s the big ecosystem builders who are dictating the rules and charging “taxes” to play on their turf.

What should vendors do?

Most channel leaders should do some soul-searching to boldly go where they have never gone before. Nothing is without risk, but there are fundamentals that you can never go wrong with, like building trust, relationships, inclusion, simplicity and transparency. The underlying mission is to build an ecosystem of partners where everyone feels connected, appreciated and rewarded.

Many vendors spend the bulk of their budget on infrastructure like marketing automation and partner portals but not enough on basics like actual content to help partners generate leads. Consider helping and rewarding your partners who make small incremental steps towards building a sustainable and predictable lead-generation practice and you will eventually see the success. Reward heavily for the behaviors that will lead to the outcomes you desire and not only for the transaction.

It takes time for any ecosystem to build momentum and get up to critical mass. It is not only about the number of channel partners in your ecosystem. It is mainly about the quality of the partners, how much revenue they can make selling your stuff and how you support ALL to succeed.

If you are a SaaS vendor, an open API that allows fast and seamless integration with any platform is critical for creating a more successful partner ecosystem because it empowers partners to plug you into their systems instead of forcing them to go to your platform to do business with you. Keep in mind that MSPs have to navigate many vendor portals so making it easier for them to do business with you is a smart competitive advantage.

CompTIA’s recent “State of the Channel” report shows that 25% of partners said the customer experience is critical in choosing a vendor. 37% were looking for better communications and support. 39% were looking for better profitability. 33% looking for emerging tech.

Always think about the partner experience (PX). If you give them the best possible experience and help them make more money, then they will show you the money.

Too often, vendors do things through their lens at the risk of (knowingly or unknowingly) alienating the vast majority of their partners. I do not know why, but my guess is the 80/20 rule has been too deeply ingrained in the brain. Either you ignore the 80% and double down on your 20% or you create a new playbook where 100% of partners have a viable path to success.

The future demands a more nimble and digital transformation savvy partner community to help all businesses succeed in the digital-first World. Some of the current business models of channel partners are already becoming obsolete in the race to full digital transformation. Tomorrow’s MSPs will have to help their clients leverage a wider variety of technologies to help them engage with everyone they touch while fending off cyber attacks and adhering to a variety of compliance regulations. That requires a different set of skills and it’s not easy to do.

Anyone who truly understands digital transformation will tell you that it’s a never-ending journey that requires an ecosystem of capable partners to be successful. It demands everything necessary to meet the needs of buyers, employees and suppliers (If you are looking for some deeper context, check out a new book by Shane Gibson and Dr Denis Cauvier “Real Results in a Digital-First Economy”).

Take the first small step…

Get out of your echo chamber to get a full dose of the new reality. Start listening to people outside of your room. Talk with us or other channel experts. Digest the data.

From there, build a re-energized channel playbook and keep an open mind to make adjustments based on actual data-driven evidence and outcomes. You may have to adjust some of your processes, reallocate resources and replace some automation tools.

The channel will soon be hitting its 40th birthday. By the time the channel hits 50, it will likely be unrecognizable from what we know today. The evolution continues and the biggest vendor winners will be those who best follow (and lead) their customers’ journey – the channel partners.

For newcomers to the channel, sorry you missed the fun times in the wild west early days of channel building, but what matters now is that the channel is in your hands to leverage, shape, expand and nurture. If you do not have deep experience in the channel, go all-in to learn and understand how the channel works and how you can play nicely in their sandbox.

History has shown that the channel has been one of the biggest forces in the technological transformation of the planet. The indirect channel already accounts for about 75% of goods sold so the debate is over. Vendors make cool tech, but the channel partners are the ones on the front lines that make it work. The channel matters and what vendors do with partners is imperative.

Ready to talk about channel partner ecosystem building?