Where Do Partners Fit?

We just want your customers!

The B2B technology marketplace provider – where do partners fit in that scenario? Aimed at Buyers, are partners just affiliates driving traffic to the marketplace? Is this the future of the channel partner (as an affiliate)?

In some ways this has been coming for a while. For anything other than networking and voice, many vendors have turned their partner programs into basically a Referral model. You give us the lead, get out of the way and we will close it (and pay you).

This shines the light on the vendor view that the channel is coin operated.

But if the partner’s sales were basically referral deals, how much does that partner own the customer? And if the roll-ups are just to get to the customer, what are they getting?

Many small businesses do not use a CRM. Partners are small businesses (solopreneurs in many cases). The contacts for that business have likely changed – due to time, M&A, employee churn, etc. So again what asset is being acquired? How are the roll-ups getting customers?

The PC Debate

There has been a debate about the master agency term as non-PC. Let me ask you then, when partners are “invested” and sign exclusivity agreements, wouldn’t that be a master relationship?

In 1999, there were partner programs that had exclusivity clauses in the contract (cyclical huh?) People got around that by setting up a new LLC or putting their spouse on the contract. It’s even easier today to establish an LLC.

The Wheels Are Falling Off

Why are partners rolling up the bases (or selling to master agencies)? There are many reasons including partners are getting ready to retire. Another significant reason is the carrier contract with quotas. The quota go up every year despite factors that would make it hard to meet quota. For example, network price compression means selling more and more just to stay level. Another example, CenturyLink (now called Lumen) is a merger of so many carriers: Sprint/Embarq, Qwest, Savvis, Elastic Box, Tier3, GukfTel, KMC, GTE, Level3 (itself a combo of many companies including TWTC) and they have spun off so much (like data centers and now ILEC), how do you meet quota if you only used to sell Qwest colo? How do you keep getting paid for the Qwest colo you sold? Roll it up. Carriers think partners are greedy; I have news for you, every company is greedy and mainly short sighted.

CenturyLink is also selling off a bunch of assets to PE. Will those partners still get paid?? What happens if you were only selling C-Link ILEC in those regions but now you have a quota to carry that you can no longer fulfill with your sales?

When I started in this biz in 1999, I was selling BellSouth. Every quarter BellSouth would move the cheese. Every single quarter. To me that is a failure at many levels. It also seems like gaming the program to screw partners. It is that kind of mentality that leads to a coin operated un-loyal partner program.

It is all about self-interest. And you are partners while your self-interest align.

I’ll leave you with this last question: Do carriers start to play hard ball with Quota and MDF – and effectively mess up the partner ecosystem as it stands?

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