All organisations need defined objectives by which they measure success. For channel businesses, a carefully chosen partner network is cultivated to meet these objectives by increasing revenue, market penetration and more.
However, channel partners have their own objectives, and all too often, the big-picture goals set by the channel business can be forgotten, resulting in both parties drifting apart without even realising it.
Here, we look at how partner strategies and organisational objectives can become misaligned, what impact this has on the businesses, and why it is important to realign your strategy and prevent future deviation.
Why Do Partner Strategy and Organisational Objectives Become Misaligned?
Some of the most common organisational objectives for channel businesses are increasing revenue, market share, customer satisfaction, and customer retention, but whatever the goals of your business are, your channel partner network should support your efforts to achieve them. Good partnerships are not simply additional salespeople or distributors, but allies working towards mutual success.
However, it’s not uncommon for an organisation’s partner strategy to be misaligned with its organisational objectives, leaving your partner’s efforts less than effective and reducing ROI.
Changing Business Objectives
It may be the case that when the partner program was first created, it aligned with organisational objectives. However, business objectives can change and often do more regularly than partner strategies, meaning they can become misaligned easily without detection until there is a significant gulf.
Inconsistent Branding
If channel partners use branding or messaging that is inconsistent with the organisation’s, confusion for customers and weakened brand identity can be caused, making marketing and sales efforts less effective. Even if the channel partners accurately represent the products or services, the mixed messaging of two distinctly different brands can result in misalignment.
Similarly, this conflict can hinder coherent market engagement if a partner has a different approach to sales and marketing – for example, types of sales channels, promotional strategies and pricing models.
Conflicting Business Cultures
Channel partners may have markedly different cultures or value systems to the organisation, which influence both business practices and priorities. This can lead to misalignment in business operations, affecting everything from customer service to product development.
Channel partners may also have different risk tolerance levels which result in a more or less aggressive approach to pursuing new opportunities, investing in innovation and more. This can affect the speed and direction of strategic initiatives.
Competing Instead of Collaborating
Ideally, partners bring complementary strengths to the relationship, but this is not always the case. Sometimes, both the partners and the organisation have similar strengths and compete for the same market rather than collaborating, resulting in missed opportunities to leverage each other’s unique capabilities.
For example, suppose a partner is focused on short-term revenue gains, such as hitting monthly sales targets, but the channel business is prioritising long-term market share growth. In that case, the strategies may not support each other and one may even impede the other.
Poor Communication
A lack of clear, open and consistent communication between the organisation and channel partners can easily lead to misunderstandings and divergent strategies. A lack of consistent communication can also contribute to partner programs becoming outdated when organisational objectives change.
If partners target different markets or customer segments do not align with the organisation’s strategic focus, brand messaging can quickly become diluted, leading to an inefficient allocation of marketing resources.
Forgetting the “Big Picture”
A lack of shared vision can also lead to misalignment. Both parties should have the same vision for what they aim to achieve. With proper partner selection and onboarding processes, partnerships should begin with a shared vision, but if objectives change, this may no longer be the case. Even if business objectives have not changed, a shared vision of success should be established and communicated between partners to avoid misalignment.
Partner goals that do not align with those of the organisation can conflict with those that do. Market focus, revenue targets and growth strategies should be synchronised between partners to avoid clashes.
Lack of Commitment and Engagement
It may also be the case that there is a different level of commitment to the partnership between the channel partner and the organisation. One party may consider the partnership a cornerstone of its strategy and put additional resources towards and expectations on the relationship, whereas the other party may only view it as a minor aspect. This conflict will often result in decreased effort and time investment on one side and disappointment on the other.
What Impact Do Misaligned Partner Strategies Have On Business Performance?
Partner strategy misalignment happens all too easily and can occur for several reasons, but how damaging can misalignment be?
Most misalignments begin fairly innocuously, but over time, they can undermine reputation by damaging revenue, responsiveness and coordination. Moreover, organisations with properly aligned strategies outperform competitors that do not in terms of growth and achieving objectives.
Businesses with misaligned objectives often suffer from poor performance management, leading to missed projections and decreased stock and company value. It is a slippery slope once misalignment starts to manifest. Initiatives for supporting and sustaining growth begin to stall because it is no longer profitable to do so without aligned business objectives.
Profitability can also take a hit, especially if misalignment or unsuccessful initiatives delay new product launches. If there is a predetermined window that is most effective for launching a new product and the organisation misses it but its competitors don’t, this can be highly damaging to revenue, reputation, and market share.
Without proper communication and visibility (often a cause of misalignment), partners will quickly become self-directed and drift away from organisational objectives, potentially resulting in reactive spending and replication of initiatives. Time and money can also be wasted pursuing poorly qualified leads if partners are not as invested or clued up on the types of leads they should target. Sometimes entire campaigns may need to be rebuilt because not everyone sings from the same hymn sheet.
All of these consequences of misalignment cause friction between an organisation and its channel partners, which could result in incentives being removed, further damaging the relationship and performance levels.
Partner relationships should not be taken for granted. Partners are often better positioned within the market and closer to the end-user than the organisation and can provide invaluable insights on the market and customer feedback.
This is why it is so important to bring them back into the fold and put in the effort of realigning your partner strategy with your organisational objectives.
How Do You Identify Areas Where the Misalignment is Most Pronounced?
Before you can rectify your misaligned strategies, it is important to understand where the effects are felt the most. You can do this by evaluating the performance and expectations of your channel partners across some key metrics.
Sales and revenue are the first statistics you should look at. Compare the expected sales targets with the actual sales figures for each partner.
While misalignment might not be the only factor at play here. Related issues such as partner capability or effort levels may also lead to diminished sales figures.
You should also assess if there are any geographic regions or market segments where performance is below expectation. If market penetration and coverage are key objectives for your organisation, this metric can indicate that your partner strategy is not aligned or that your partners lack the necessary influence or expertise to be effective in this pursuit.
Finally, you should assess customer satisfaction and retention, as this can expose gaps in your partner strategy. If partners are not delivering value or providing customer service levels, this is a key area you should address when realigning your strategies.
Related Article: The Most Effective Ways to Monitor Channel Partner Performance
How Can Partnership Alignment Be Achieved?
Once you know why your organisational objectives and partner strategy have become misaligned and where misalignment is most pronounced, the focus should turn to rectifying the problem and investing the necessary time and resources into realigning your operations.
It is important to lay the groundwork for preventing misalignment in the future.
Collaborate with your partners to redefine your strategy
Start by going back to the drawing board and planning your projects with channel partner input. Whether your objectives are increased revenue, market share, customer satisfaction, or customer retention, collaborate with your partners to understand how they can help you achieve those goals and what resources and support they will need.
Your partners may already have clear goals they want to achieve, so it is important to see how your partnership can help to achieve them. If your planned objectives make it more difficult for partners to reach their own targets, then it will be challenging to establish a mutually beneficial working relationship.
By making your partner’s goals part of the strategy, you will gain their loyalty and engagement.
Working together at the project planning stage helps ensure everyone is aligned and working towards a shared vision. You don’t have to give up control or compromise on your objectives. Simply giving your partners a seat at the table shows your confidence in them and willingness to listen to their concerns, needs and desires. It also demonstrates your trust in and commitment to them, which can be a motivating factor before any incentivised rewards are introduced. Agreeing on targets from the beginning will make future progress checks much easier.
Establish consistent channels of communication
Active, consistent communication should be the foundation of your renewed partner strategy if you want to safeguard against future misalignment. When the lines of communication are lost, priorities can shift, responsibilities forgotten, and important updates slip through the cracks, resulting in your partners losing sight of the big-picture goals.
Establish what channels you will use to communicate and schedule regular catch-ups, whether via phone, email or even face-to-face. Set a precedent that communication is welcome and encouraged at any time so your partners feel comfortable contacting you if they have a concern and don’t feel they need to wait for the next scheduled meeting.
Your communications shouldn’t just be you reciting your expectations and checking your partners’ progress (although these should be included). You should encourage your partners to present ideas and raise concerns. Validate your partners by listening to their experience and taking note of their insights, even if you think you will be going in a different direction.
Taking this approach to communication with your partners fosters a synergistic and positive atmosphere, helping everyone stay on track towards your objectives while also identifying opportunities for change and improvement.
Related article: A Guide to Successful Channel Partner Management
Share KPIs and monitor partner effectiveness
If your objectives have KPIs attached to them, then the goals become measurable, and you can share these with your partners so they have a clear understanding of what success looks like.
If you want to improve customer retention, you can monitor the number of repeat visits or orders made on a website or in-store by returning customers. If you have yearly sales targets, these can be broken down quarterly or even monthly to give a better picture of what kinds of sales your partners need to make.
If you and your partners are both working towards the same specified KPIs, they can share information about what they are doing to achieve those goals, as well as how close they are to achieving them. Certain partner activities might be helpful towards realising big-picture objectives, while some will be less so. Having open, consistent lines of communication will allow you to reign in less-helpful activities and encourage beneficial behaviours.
As well as the KPIs that relate to your operational objectives, you should use KPIs that measure partner effectiveness to ensure that you are allied with the right people. Partner experience, training engagement and partner satisfaction with your partnership should all be considered. You should also monitor how valuable they are in contributing to your big-picture goals.
In many cases, you can use this data to iron out any issues and help partners overcome their weaknesses. It may also give you the data needed to justify terminating the partnership and finding a better fit.
Provide high-quality training
Through the process of redefining your partner strategy, you may discover gaps in your channel partner’s knowledge or experience that prevent them from reaching their potential. The best way to address this is by providing them with high-quality training materials to educate them on everything they need to know about your brand and products.
A bespoke channel partner LMS does just this, providing your partners with around-the-clock access to the materials they need, allowing them to fit training around their schedule. Translation tools also mean that partners all over the globe can benefit.
Using this type of software also allows you to accurately monitor partner engagement and how invested they are in development. You can track which partners complete which courses, how often the LMS is accessed and much more. Plus, partner feedback allows you to adapt your training program to add courses or materials and fill knowledge gaps.
Through proper training, channel partners are better equipped to sell more of your products or services, introduce them to new markets, favour your products over your competitors, and encourage repeat business and customer loyalty.
Introduce incentives to motivate your partners
If you are not already running an incentive program, this can be a great way to reward your channel partners for hitting targets and encourage continued alignment for contribution towards your big-picture goals.
As long as activities are measurable, they can be rewarded.
Hitting sales targets, generating quality leads, receiving positive customer feedback and carrying out product demonstrations can all be incentivised, as long as your partners know exactly what they need to do and what they will receive.
Monetary rewards, gift cards, getaways, and entertainment tickets are popular incentives. Business-based incentives work too, such as offering lunches with executives (which provide an opportunity to network), discounts on wholesale products, free training courses, certifications, or market development funds (MDFs) can all be powerful motivators for your channel partners.
Related article: Developing Incentive Programs for Channel Partners to Maximise Performance
Summary
While it is not uncommon for partner strategy and organisational objectives to become misaligned, it is a concern that needs to be monitored and addressed as soon as it is identified. The consequences of a misaligned business might be minor at first, but it can soon become damaging to both revenue and reputation.
Revisiting your partner strategy in a collaborative effort with your channel partners allows you to build a strong relationship that is resistant to future misalignment.
By keeping the lines of communication open, establishing agreed-upon KPIs and providing the necessary training and resources for your partners to succeed, you can ensure that your partnership is mutually beneficial and consistently driving towards big-picture targets.
To give your partners the tools they need to represent your brand effectively, consider our channel partner LMS, a cutting-edge platform that arms them with the knowledge and skills they need to thrive in today’s competitive landscape.
