It was recently announced that Trend Micro will be reducing the number of partners they have through a formal review program. The company cut 600 U.S. partners in 2013 as a result of the review process, and may cut another 12 percent to 15 percent of its 6,000 partners this year – which means that another 700-900 are on the chopping block.
It is extremely hard to cut partners (just writing that line reminded me of the song I will reference at the bottom, and now it rings through my head as I type – which is fun but distracting much like this little insert in the post.). Many companies continue to keep non-performing partners in perpetuity (which means a really long time or an annuity that has no end). These companies feel that the partners are not a risk and offer upside and are a captured audience to market their wares.
On the surface, it seems there may be little cost to maintaining partners that do not perform. However there are a number of risks associated with doing such. This includes dissemination of competitive information, the increased cost of maintenance and sales cycles spent trying to increase these partners’ sales, increased cost of marketing communications, and the devaluing of the relations with your performing partners.
Lou Gerstner, during his tenure at IBM, was famous for revitalizing the company. One of the strategies he used was to annually cut the bottom performing 10% of the staff. This was viewed as harsh, but the results were very positive. It can be argued that the impact of such across the board cuts punishes the most efficient units most, the least efficient units least. Applied to the channel, making a ten percent cut to a low or non performing channel makes sense.
Focused efforts on the top performers and the next tier of performers will lead to greater sales results. There will always be the up and coming partners and those with great potential that need attention and care to evolve into the sales dynamo that you expect. Those can be part of the program, but after investment of time and resources, if performance does not increase its time to move on. These are hard choices and in the end Trend Micro will be better off for making these choices.
Any tough can fight – few can play
Any fool can fall – few can lay
Any stud can reproduce – few can please
Anyone can pay – few can lease
(It’s a hard hard hand to hold
It’s a hard land to control)
Any man can claim – few can find
Any girl can blink – few can lie
Anyone can promise – few can raise
Anyone can try – but a few can stay
Any brain can hide – few can stand
Any kid can fly – few can land
Any gang can scatter – few can form
Any kid can chatter – few can inform
It’s hard – It’s very very very very hard – so very hard