Beware The 'Partner' Trap

As a new year begins, it's important to take stock of your progress and relationships, both personal and professional. Just as you reach out to appreciate your family and friends, it is a good time to think about your relationships with partners, vendors and colleagues. Now is the time to analyze who you are doing business with and why to ensure everyone is getting the full value.

In the same spirit, you should examine your customer base to ensure each is contributing to your success. It is also a good time to examine your vendor relationship to determine if it is still the best match to support your business goals.

The word "partner" is thrown around a lot—particularly by vendors. Webster's Dictionary defines it as "a person who shares or is associated with another in some action or endeavor." Legal definitions refine this to include "sharing its risks and profits." Microsoft is the 800-pound gorilla using the word "partner." Dell is criticized for not being "partner friendly." ConnectWise calls its customers "partners." Examples abound—these are just three. But are they really your partner? Do any of these organizations share in your risks? Do they share in your profits? Are they invested in your success?

Vendors embrace the term "partner" because it has a positive marketing feel. Would you rather buy something from someone who seems invested in your business, or one who doesn't? Vendors put forth a positive, I-am-your-partner-not-your-vendor approach. Vendors will schmooze with gifts and attention. I don't blame them—we do the same to our own customers. Solution providers encourage it. It feels good to be "friendly" with your vendors, to consider them part of the organization, and there are advantages to presenting a unified front to your own customers.

But I believe this is a disservice to everyone, and particularly our customers. Ultimately, both sides should approach the equation with a fresh perspective.

Our best experiences working with a vendor happen when we answer some simple questions. What makes them tick? How do they make money? Is it hardware sales? Software licenses? Now, does our relationship actually help them achieve their goals, maximizing their profit as well as ours? If it doesn't pass this test, you should not be surprised if they aren't interested. To truly partner, you need to take into account their business as well as your own.

Vendors need to focus on how solution providers make money, and recognize that we, the solution providers, are their customers. To be an exceptional vendor, examine how solution providers make the most money. Recurring revenue remains one of the best ways for a solution provider to profit. As a vendor, does your product or service allow for that? How do your solution providers become more profitable with their services based on your product? What are their costs of getting to that point, and are those costs acceptable?

My message to fellow solution providers: Don't fall into the trap of "partner." Your customers are your customers. You should provide solutions to your customers that bring together a collection of your best vendors to provide the best possible solution. You need to manage those vendor relationships so your customer doesn't have to. This is the value you bring, and if you reduce that, you lose.

My message to vendors: Stop focusing on spifs, discounts and promotions. Your best customers are your solution providers that work with you, that engage you and who fundamentally get that you make money on the product you deliver. A service provider who is trying to squeeze an extra percentage point out of you doesn't get it. In general, as a vendor, you are bigger than we are. Does your program invest in us, with things like training or marketing?

And to both sides: Examine your list, and make sure you understand what that party is contributing to your business. Ask if you understand what you contribute to theirs. If the answer isn't clear, you can't possibly expect it to truly be a partnership.

By being critical of the relationship, you can start to actually achieve a true partnership. Real partners are critical of one another for mutual benefit. Is that your approach?

For more on Evolve Technologies, go to www.evolvetech.com.