7 causes of failed partnerships and reseller relationships.

Different values held by leadership and expressed in organisations. 

Values exist in an organisation whether they are communicated outwardly or not. Many organisations have identified a set of values but more importantly to a business relationship is whether these values drive behaviour and decision-making. 

I recommend you investigate the values of any organisation you consider engaging as a partner or a reseller and vice versa. Some of this investigation may be ‘gut check,’ and here are some tips:

  • Ask the leadership team questions about the company’s strategic plan. 
  • Make contact with some customers and ask them about their experiences and how they are treated by the company. 
  • Conduct at least 2-3 meetings with the person or team with whom you will be working most closely. What systems do they have in place? How do they respond to issues? Do they have empowerment to make decisions or is there a culture of top down decision making? How long have these people been in the company?

Different cultures in the organisations. 

This is related to values but needs to be considered critical to the relationship. If the culture of one firm is client focused and the other is not, there is going to be a disconnect at some point. If you have an organisation that likes to move and respond quickly to opportunities and your partner or reseller is bogged down by decision making and risk aversion; that is a recipe for disaster. 

One of my clients is (was) a reseller for a European software company. My client was consistently compromised in its delivery of customer service by the vendor being slow to respond and unwilling to undertake any work or activity without cost or a work order. My client had a reputation for being agile and responsive. My client determined their reputation was worth more than the vendor relationship and has commenced the process of ending the reseller relationship. 

Market differences between vendor and reseller. 

The vendor operates in a different market to the reseller or partner. This has impacted one of my clients. The vendor was focused on customer segments that had simple requirements, uncomplicated structures and short term product implementations. My client has a reputation for successfully working with large complex organisations that require longer implementation projects. The vendor lacked the skills and experience to support my client as they won deals with organisations that required solutions that were more critical to business outcomes. 

Lack of engaged support. 

In my experience, many vendors engage resellers and never truly engage with them to support the product/service. The vendor does not seek input for product development and avoids taking input from customers of the reseller/partner organisation. The vendor may relegate support for partners and resellers to a lower priority than their direct customers. 

Lack of trust and transparency. 

This issue is related to values and culture. If trust is lacking in any relationship, it is doomed to fail. Trust is not developed or sustained in a contract. Trust is personal and it should be the objective of both parties to build and protect trust. 

No shared marketing.

This issue surprisingly common. The vendor provides no marketing support. The vendor may commit to marketing support at the outset but this wanes over time. The partner or reseller is forced to re-invent the marketing strategy and undertake its own marketing activities without participation by the vendor. It may be an issue of the vendor not having the resources to do this effectively; regardless both the vendor and the reseller/partner must work together on effective marketing content and communications. 

Personal meetings and visits are not regular or held at all.

This is the key to having effective relationships based on trust. There is no substitute for personal meetings and regular communication. If you are a vendor and not prepared to travel to visit your partners and resellers, forget it. At the very least you need to have the discipline of regular online meetings that should involve business topics as well as personal discussions to forge mutual understanding and trust. 

Possible impacts of failure. 

Reseller and partnership relationships can be extremely successful and deliver more than the sum of the two parties when the relationship is trustful, collaborative and customer focused. Too many businesses engage in reseller and partnership relationships without undertaking due diligence of the other party. The other critical mistake is undertaking a partnerships or reseller relationship without effective planning and allocation of resources. 

The impact of failed reseller and partnership agreements can be more than hard feelings. Failed relationships can impact the reputation of both firms and do long term damage to the viability of the product in the market impacted by the failure. 

Prevention is better than cure. 

The 7 causes of relationship failure listed above are not exhaustive. I can help you develop a reseller/partnership strategy. If you are aware of the need to improve your partner and reseller relationships, it may be time to get some help.  

Let’s face it:  it always helps having another person to give you perspective and honest feedback.  You need to get some advice from a person who can bring ‘fresh thinking’ to your business.

Do you need a trusted business advisor, someone who can help you see your business and goals through ‘fresh eyes’?  Contact me and I will work with you to look at where you want to go and help you find the best way to get there.

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