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The Secrets to Preparing your Channel for an Economic Downturn

In June 2022, we see inflation reach new heights and supply chains stretch thin as the economy reels from one surprise to the next. While everyone would qualify the recent events as a “downturn,” another possibility may loom in our collective futures, casting a long shadow over conversations, today: economic downturn

Whether you are reading this article in light of a turbulent global economy or just want to have better control over your spending, below are tips on how to stretch your partner program budget while minimizing the fallout of reduced spending.

Why Partner Programs are Ideal for Times of Economic Uncertainty

The good news is that channel partner programs are a sound investment in times of financial uncertainty, especially compared to growing your Direct Sales team. Reasons include:

  • You only pay partners through commission on their sales, and acquiring new program participants is essentially free. While your Direct Sales team will make the bulk of their money through commission, they also require a baseline salary and benefits. Other related costs could include office space or at-home office equipment and their travel expenses. On the other hand, it costs you no extra money to enroll a new partner (assuming you have the appropriate baseline technology in place). For this reason, if a partner fails to generate meaningful profit, you needed only minimal upfront investment anyhow.
  • You can share marketing costs with partners. By engaging in co-marketing activities with partners, you share both the successes and the upfront costs. What’s more, you can leverage your partners’ brand equity and contacts to further magnify the reach of your joint messaging for overall greater success.
  • Partners help you reach new audiences so you’re not “all in” on one region. As the COVID19 pandemic made evident, we all feel the ripple effects of sizable events. However, some local economies felt the backlash more than others. Creating a multinational partner ecosystem strategy lets you diversify your exposure so one country’s hardship will have less impact on your bottom line. What’s more, it’s quicker to establish new channel partners than to build a new office overseas. Case in point, Zoom was able to “strike while the iron was hot” during the early pandemic by launching their Master Agent Referral Partner Program in March of 2020. They grew their business 7X that year with 20% of sales coming from their international partners.


How to Strategically Reduce Partner Program Spending

Let KPIs Drive Your Budgetary Cuts 

Not all partner programs operate the same, so blanket statements about effectively stretching a budget may not necessarily apply to your particular situation. Therefore, the best advice we can give is to calculate the ROI of your strategies, keeping in mind: 

  • What MDF spending yields the highest (and lowest) ROI – Review marketing development fund (MDF) data by marketing campaign type, partner type, region, content messaging, and highlighted product. Just be mindful that, if MDFs are established rewards for higher tier performers, overnight changes to your strategy may not be well received. Therefore, if you roll back MDF accessibility for some partners, give as much forewarning as possible, communicate why, and see if there are other ways you can reward program participants for lesser costs (promotion on your website, for instance).
  • Which partners are worth your time – If you haven’t done so already, create partner tiers based on performance. This will lead your channel account managers to invest greater energy in relationships that are more fruitful than those that yield lesser returns

Improve the Sales and Partner Journeys for Higher ROI

A new partner doesn’t automatically generate new sales, just like a new lead doesn’t mean surefire revenue. Improve the ROI of your partner program by assessing: 

  • How to better retain the partners you have – Investing in the partners you have will ultimately yield higher ROI than consistently having to recruit new ones and onboard them (only to soon lose them). Blend your partner platform’s engagement data with qualitative feedback to diagnose program flaws that could dissuade partners. 
  • How to better nurture the leads you have An underserved (or incorrectly serviced) lead is a squandered opportunity. Review your sales enablement content and partner group success rates to narrow on the winning (and losing) strategies. Collaborate with your Direct Sales team and trusted partners to figure out why some approaches work better than others and/or some audiences are more receptive. For more guidance, read Auditing Your B2B Sales Funnel – Recommended Process and Tips

Improving the success rate of program participants will ultimately yield both short-term and accumulative long-term wins. 

Refreshing Existing Materials Rather Than Continuously Create New Ones

The expression time is money takes on a literal meaning when collaborating with creative personnel. Lessen this part of your marketing spending by revisiting past materials that:

  1. Performed well against their chosen KPIs (user engagement, audience reach, etc.)
  2. Are overdue for a refresh of messaging or medium (don’t re-release something you published a few months ago)

For example, let’s say you created an infographic in 2018 – why not repurpose the visuals in new materials, whether it be illustrative battle cards, articles, etc.? Similarly, if the marketing team recently hosted a webinar, why not use the slides and talking points as the foundation of a new training asset? 

Maximizing Your Team’s Current Potential Through Automation

An economic downturn can linger for years, meaning that channel teams should consider long-term solutions like PRM automation. While the initial setup requires additional hours, many Customer Success teams (like Allbound’s) will handle much of the software integrations and technical pieces, like creating partner settings. Automation of partner training, sales enablement, and general support makes your team less bogged down by menial tasks, enabling each account manager to facilitate a higher number of relationships. In turn, your program can scale without significantly more internal hiring. Examples of automated partner management tasks include:

  • Behavior triggered content suggestions
  • Multi-step onboarding processes paired with quizzes 
  • Email notifications to partners based on portal activities (or lack thereof)
  • Email alerts to your team about concerning performance declines 
  • Unlocking new tools based on predetermined partner achievements 
  • Selective content accessibility based on partner grouping 
  • Step-by-step playbooks based on registered deal information  
  • CRM real-time synchronization to near-eliminate conflicts 
  • PRM data visualization for attractive reports that marry related engagement touchpoints 
  • Co-branding capabilities for selective materials and partner groups 


Additional Ways to Economic Downturn-Proof the Channel Partner Program

  • Assess your technology suite for under-utilized or redundant software – Perhaps you regularly utilize an advanced technology platform but only for one of its features rather than the full suite. In such a scenario, you may be able to find a less expensive alternative that focuses solely on what you need. Alternatively, perhaps a singular, comprehensive package of features is what you need rather than a series of disjointed tools that somewhat overlap in capabilities. Economic downturn or not, it’s wise to regularly review your subscriptions to determine if you spend more than you need. 
  • Assess your spending related to vendors – Similar to the above, a reduced budget could be the perfect opportunity to reevaluate vendor relationships. Are your vendors utilizing all of their allocated hours or is there room to update the SOW? Is there an alternative vendor who is at a different price point? It’s possible that the partner program inherited the preexisting relationship from Marketing, meaning that it may not necessarily be the right fit for your specific needs and have diminished ROI. For example, are they familiar with the particular geographic regions you hope to enter? Are their ideas and materials yielding the desired results amongst partners and their leads? Consider exploring alternatives, if only to understand if you’re receiving a fair rate from your vendors.
  • Shift from in-person events to digital – This reduces travel costs, as well as the expense of the venue, food, and physical materials. Keep in mind that your partners or potential customers may also be looking for easy ways to reduce spending, meaning that they may be less likely to pay for team members to attend faraway events.

Don’t Panic and Forget About the Big Picture

When COVID-19 first struck, the airline industry laid-off employees in record-breaking numbers and, when they found that they needed higher staffing levels soon after, they faced a multi-year struggle to rebuild the workforce. While it’s difficult to say if such actions were necessary or induced by panic, a lesson remains for all of us: avoid making short-term decisions that have significant long-term consequences (like downgrading your PRM technology from software to spreadsheets). 

Instead, you should take advanced actions to reduce spending in ways that minimize the fallout while ideally leaving the foundation of your partner program intact and ready for future opportunities. 


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