How many loyal partners are in your channel universe?
I was in Rainier National Park recently for a nearly all-night session with a group of other enthusiastic photographers. We got some beautiful shots of the Milky Way galaxy and I was humbled by the sheer enormity of the galaxy (OUR galaxy) and Earth’s small place in it.
Since I had a couple hours’ drive home at 4am and was working hard to stay alert, I found myself wondering… how many stars are there in the Milky Way galaxy?
Multiple – and vastly different – guesstimates abound. It turns out the exact number is impossible to determine and the guesstimates vary wildly based on methods used to make the guess, whether it is based on the average mass of a star, average light/wattage emitted by a star, or by counting a sample size and extrapolating a number. In other words, it’s a best guess, using the methods at hand.
Not unlike, I think, methods for answering a question many manufacturers ask these days: “how many of my channel partners are loyal?”.
“Loyalty” itself is a bit of a slippery concept when you come right down to it. When we say “loyalty” we all have a mostly-shared conceptual understanding of partners/businesses who will continue to do business with us and who are advocates of our solutions and brand, but the details often feel elusive. How many of your partners are loyal? Well, the answer to that question – like the answer to “how many stars are in the Milky Way?” – is dependent on the methodology chosen.
The old-school method for measuring B2B loyalty was all about revenue – the most loyal partner is the one who buys the most. Simple. Easy to measure.
And unfortunately, too simplistic. Today we’re more sophisticated. In fact, loyalty isn’t (or shouldn’t be a single measure, it’s an “index” – a well-reasoned, mathematical construct of different measures of engagement that – theoretically at least – total up to a single value that we assign for loyalty.
You can fold a whole host of measurements into building a partner loyalty index:
- Do they read your emails?
- Participate in training?
- Complete certifications?
- Regularly access your website?
- Participate in discussion groups?
- Talk about your solutions in social media?
- Co-brand their solutions with your company’s name/logo?
- And yes, do they sell more of your product?
- Sell your new solutions?
- Attend your webinars?
- Attend your events?
Measuring the number of stars in the Milky Way is a science – but one that can be conducted using one of several methodologies, each of which yields a different end result. Measuring your channel partners’ loyalty is a science too. And how you engage in that exercise can yield different results. Focusing on one measurement – like revenue – will yield a much thinner evaluation of channel partner loyalty. Developing a rich index to measure loyalty means a thoughtful alignment with your strategic roadmap – ask yourself what measurements arrive at an index that helps promote my long term goals? And which are most important to achieving those goals (that should receive a heavier weighting).
If your company’s strategic roadmap emphasizes the sale of subscription services, then a partner who faithfully sells your product x every quarter may be posting some nice revenue figures right now, but over the long term, this is a partner whose value will decline. And if they aren't embracing your new solutions, then their “loyalty” isn’t to the vision your company has, but to a legacy that you are moving past. And regrettably, for some partners, that may be like hanging on to a quaint vision of the universe where the sun circles the Earth.
Understanding your channel partner loyalty then isn’t just an evaluation of one or two measures – like incremental revenue or partner engagement in racking up certifications. It should be a comprehensive look at the multiple factors that contribute to a relationship between you and your partners and that align with your strategic goals. Thus, your partner loyalty index is, and should be, unique from that of your competitor.
After all, it is your universe!