Professional swim-teams have practices to make them win a competition. Players in the MSP and IT vendor sector has similar circumstances to deal with. For instance, swimming in the channel’s long tail in a partner program. What are the dynamics in this relationship that affects vendors and MSP partners?
Partner Program – Swimming in the Channel’s Long Tail
One of the practices of pro-swim-teams is to shave their entire body before a tournament. Doing this can increase their speed and performance as even the smallest friction may slow them down. In the Partner Program scenario, “small things” can affect your “big win.”
Many in the industry believe that plunging in the channel’s long tail slows them down. Consequently, it keeps them from any type of business opportunities for growth. Some misconceptions about the long tail effect partner-vendor relationships and success.
Larry Walsh shares some important points about the channel’s long tail. He is the CEO, chief analyst, and founder of the 2112 Group. Walsh talked about the 7 Open Secrets of the Channel’s Long Tail. It aims to help everyone better understand what the long tail is all about. He believes that better understanding leads to making better decisions.
The long-tail ratio is 80/20 where the long tail is 80% of the partners that generate 20% revenue. Truth is, 5% of the partners generate nearly all the revenues with a 95/5 ration. Understanding the ratio helps measure the extended channel community’s true potential.
Counting only top-performing partners in the 80/20 ratio trims down the number of active partners. The long tail refers to a group of partners, which declines in productivity. However, some people do not see this concept as it is. The long tail is not uniform and not always positive. Some long-tail partners even post negative revenue, returning more products than selling them.
Several MSP partners know that they are not in the top-performing list in a channel program. However, they are not aware that they already considered long-tail partners. Most of these businesses do not want to see themselves as “underperforming” or “small.”
A long-tail partner in one channel may be in the top-performing tier in another. Thus, judging a partner by their status in just a single channel program is invalid. Vendors must stimulate the long-tail’s revenue production. However, this may cost top performers their opportunity.
The existence of the long tail can partly be the responsibility of the vendors, especially large ones. Several vendors make the wrong calculation of their channel performance. They would only include credentialed partners, which is an internal practice. They would falsely support long-tail partners because they do not want to lose their revenue.
Thus, given this data, vendors must not dismiss the value or potential of the long tail. Swimming in the channel’s long tail allows a better understanding of their dynamics. All these can lead to better decisions to grow the partner program as well as strategic initiatives.