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Five short videos with Channelnomics CEO Larry Walsh, and one argument running through all of them
Most channel programs are not short on effort. They are short on sequence.
When partner growth stalls, the reflex is to add something. Another incentive tier. More partners. A new partner relationship management (PRM) platform. Each of those can help. None of them does much on its own, and the order you tackle them in changes the result.
We sat down with Larry Walsh, CEO and chief analyst at Channelnomics, to work through the questions channel leaders keep running into. The result is a five-part video series, each one short enough to watch between meetings. Taken together, they make a single case: Strong partner performance starts with intentional program design, with every element working toward a shared goal.
Here are the five questions, in the order we would answer them.
1. How many channel partners do you actually need?
Vendors are under constant pressure to grow revenue while protecting margin. Recruiting more partners looks like the fastest route. It rarely is. Spread funding, attention, and support across a wider partner ecosystem, and every partner gets a thinner slice of all three.
Walsh makes the point that the 80/20 rule holds at any scale. Whether you manage 10 partners or 1,000, performance will cluster. The goal is not a bigger ecosystem or a smaller one. It is a balanced one, with enough coverage to reach the markets and customers you care about.
He offers four questions to test whether a partner is still relevant to your ecosystem:
Does the partner have the technical expertise your customers need?
Is the partner producing meaningful sales results?
Does the partner hold strong relationships with the customers you want to reach?
Can the partner cover the right segments of your addressable market?
Run every partner through those four, and partner tiering stops being a loyalty ladder and starts being an investment decision. Some partners deserve more. Some deserve a rebuild. Some deserve an honest conversation about fit.
Watch: Partner Tiering: How Many Channel Partners Do You Really Need?
2. Why do partners choose one vendor over another?
Once you know who belongs in the ecosystem, the next question is why they would give you their best people and their best deals.
Most vendors assume the answer is money. More margin, bigger rebates, more funding. Channelnomics research points somewhere else. Walsh frames it as a choice between adding fuel to the engine and removing friction from it, and the data favors removing friction.
Vendors that are easier to work with see three times more share of wallet from their partners, along with higher growth and higher profitability. Partners will even choose a less profitable vendor if that vendor lets them move faster and spend less effort getting a deal closed.
The reason this is hard to fix is that friction is usually built in on purpose. Walsh argues that most programs are designed from a defensive posture. Vendors worry about overpaying a partner or rewarding work that was not done, so they add review steps and approval layers. Each one is reasonable. Stacked together, they tell partners that the relationship starts with suspicion.
The alternative starts with a decision about trust. How much are you willing to extend, and what do you expect in return? Settle that, and workflows stop acting as gates and start helping partners close faster.
Watch: Channel Partner Program: The Real Reason Partners Choose You Over Competitors
3. What actually motivates partners?
This is where a lot of channel budget goes to die.
When a channel incentive program underperforms, the common diagnosis is underfunding. Walsh says that gets it backward. Salespeople are not, in his words, coin operated. Partners respond to meaningful opportunities, and incentives should reinforce the value of pursuing them.
Three patterns show up in programs that are not working:
Rewarding historical transaction volume instead of the behaviors that build a partner's business over time
Treating a rebate as the entire strategy, then calling the program a failure when it does not return quickly
Expecting incentives to compensate for economics that do not work for the partner
If the underlying economics do not work, no rebate fixes that. What has to exist first is a real opportunity, and Walsh breaks that into two parts. There needs to be customer consideration, meaning a buyer who already sees value in what the partner offers. And there needs to be a clear mission, something the partner can do for that customer on your behalf that earns them money independent of any single product sale.
Build the opportunity, remove the friction around it, then layer incentives on top. That sequence works. The reverse does not.
It is also worth separating the two kinds of incentives you have available. Monetary rewards like rebates, market development funds, and sales credits reward specific behaviors. Non-monetary support, such as enablement, training, and shared resources, lowers the partner's cost of doing business. Most programs over-index on the first and underuse the second.
Watch: Channel Incentive Management: Incentives Don't Motivate Partners
4. Can you trust the data behind your partner metrics?
Every decision above depends on knowing what your partners are actually doing. That is where most channel organizations hit a wall.
Walsh has asked rooms full of channel leaders how many have access to good partner data. Few hands go up. Almost every organization Channelnomics works with has the same issue: data that is out of date, duplicated across systems, or too disorganized to use with confidence.
Garbage in, garbage out. The part people miss is that bad data is worse than no data, because half-baked insight still gets treated as fact and still ends up in a board deck.
Assume you fix the inputs. A second problem shows up right behind it. Teams expect the data to hand them both the question and the answer. It will not. You have to decide what you are measuring before you go looking for it.
Walsh sorts channel partner metrics into two buckets:
Imperatives. The partner performance metrics that satisfy real business stakeholders and answer the question every channel leader eventually faces, which is what the channel is worth and what it is producing.
Feel facts. Numbers that make a report look healthy but carry no relevance to any decision anyone is about to make.
Measure the first. Let the second go.
Watch: Channel Partner Metrics: Why Data Quality Comes First
5. What has to be true before you automate?
Which brings us to the platform question, and to the reason it belongs last rather than first.
Every channel leader wants faster growth and better margin. When the numbers are flat, the search begins for something that accelerates the program. Incentives and automation are the two usual candidates, and both can genuinely accelerate a program. Neither creates a strategy where none exists.
Walsh's position is direct. Before any level of automation or AI gets applied, a set of organizational questions has to be answered:
What is the program, and what are the workflows behind it?
What policies and processes govern it?
Who governs it, and who is accountable for making each piece work?
Skip that, and a PRM implementation can still fail to deliver. Not becausethe technology does not work, but because nobody built the foundation it was meant to run on. Walsh sees the pattern often: a vendor buys a system expecting it to solve the program, and ends up fixing governance after the fact, which costs more and takes longer than doing it first.
Acceleration without direction just produces more activity.
Watch: Partner Relationship Management: Automation Won't Fix a Broken Program
The through line
Read the five together and a clear order emerges.
Decide who belongs in the ecosystem. Make yourself easy to work with. Build a real opportunity before you fund incentives. Get the data honest enough to tell you what is happening. Then automate, once there is something worth automating.
Success starts with deciding what the program is for, and the order in which its pieces should be built.
The technology matters, but it matters second.
Where e2open fits
Most of this work is design work, and it happens before any system goes live. E2open Channel Managed Services supports vendors through program design, governance, and partner incentive enrollment, with in-region specialists who stay involved after launch so the program does not drift away from the plan.
On the data and measurement side, e2open Channel Data Management brings partner incentive plan management together with the channel data and performance metrics that show where opportunity actually sits, rather than where volume happened to land last quarter. Collaborative Channel Planning adds the shared view of plans, funding, demand, and inventory that makes ecosystem decisions easier to defend.
Frequently asked questions
What drives channel partner performance more, incentives or program design?
Channelnomics research suggests program design matters more. The size of a partner's total economic opportunity, along with how easy a vendor is to work with, tends to influence partner commitment more than the size of the incentive layered on top. Incentives can accelerate a program that already works. They rarely rescue one that does not.
How many channel partners should a vendor have?
There is no universal number. Start with the customers, segments, and regions you need to reach, then compare that with each partner's technical expertise, sales results, customer relationships, and market coverage. The 80/20 rule applies whether you manage 10 partners or 1,000, so the useful question is balance and relevance rather than headcount.
What is ease of doing business in a channel partner program?
Ease of doing business describes how much effort a partner spends to transact, get support, claim funds, and close deals with a vendor. Channelnomics research indicates vendors seen as easier to work with earn roughly three times more share of wallet from their partners, along with higher growth and profitability.
Why is channel partner data usually inaccurate?
Partner data commonly goes stale between the moment it is captured and the moment someone acts on it. Records are also duplicated across systems that were never designed to talk to each other. The risk is not just missing insight. Analysis built on unreliable inputs still gets presented and acted on as though it were sound.
What should channel leaders measure?
Focus on imperatives, meaning the metrics that answer what the channel is worth and what it is producing for real business stakeholders. Set aside what Larry Walsh calls feel facts, the numbers that look good in a report but do not inform a decision.
Should you implement a PRM platform before fixing program governance?
Governance usually comes first. Program goals, workflows, policies, and clear accountability determine what a PRM implementation or incentive platform can actually deliver. Building that foundation after the technology goes live tends to slow the rollout and raise total cost of ownership.
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