It’s Not About the Margin

We talk to A LOT of channel partners. At bChannels we conduct a significant amount of research around the partner’s experience with their technology manufacturer or vendor and what makes for a really great partner benefits program. In almost all of these conversations, when asked, the partner inevitably mentions that the most important thing to them is the margin that (insert your favorite technology company) brings to the relationship when the partner sells on their behalf.

But is this REALLY the answer to a great partner program?

Last summer I took up downhill mountain biking. There are a lot of mountain bikers in the world, but far fewer downhillers. I like to mountain bike, but I LOVE to downhill. There’s a big difference between the two activities. In regular-ol’ mountain biking, you ride a trail that has a lot of uphill, a lot of downhill, and a lot of uphill (the uphill seems like it’s far more than the downhill even though it’s not). In downhill mountain biking, you strap your bike to a ski lift, haul it to the top of a mountain and ride down on a trail that’s often about 2-3 feet wide with MANY obstacles in your way (including jumps, rocks, trees, etc). I get far more adrenaline out of the downhill but it is a bit dangerous and not for the faint of heart.

On one of my first times riding downhill, I was flying (that’s what it feels like) down the side of a mountain and TOTALLY missed a turn. I flew off the trail into a bunch of trees. I put a two foot scrape on my leg (which bled like crazy), twisted my bike up a bit (it’s fixed), and put holes in my gloves. All I could think was…”good thing I had on my helmet…but heck ya’ that was fun.” And, I kept on riding for about 6 more hours.

Both mountain biking (enduro or XC) and downhill require a mountain bike. In both cases, you’ll eventually crash. But what makes me prefer one over the other? It’s really about the experience, the journey, the story that’s associated with riding downhill. Even though the bike is basically the same (small differences from bike to bike), I have a better ‘experience’ with the downhill and it keeps me coming back.

As a technology manufacturer, your relationship with your channel partner is a lot like this. When asked, your partner is going to say, I need more margin. But, at the end of the day your margin from vendor to vendor is all about the same (with small differences). Do you need to pay attention to staying in line and providing good margin (yep – just like bikes evolve so does your program). After you make sure your margin is ‘in line’ with your competitors, the more important part of the program is really the experience you provide the partner (the other ‘soft’ benefits that make for a GREAT experience). It’s the ‘stuff’ that makes for this experience that keeps them coming back, and that’s NOT the margin. Be different…more valuable…when it comes to your ‘soft benefits.’ Understand what THOSE needs are.

You’re going to have obstacles. You’re going to have challenges. And, you’ll eventually crash and have to pick up the pieces to continue on. If your partner is having a great experience, if you’re meeting THOSE needs, if you’re giving them a great journey, an awesome story. They’ll keep coming back for the next 6 hours, next year, or even the next 6 years.

#OpinionPiece