You want a profitable deal? Get in a partner and then get out of the their path

Why do I always argue that a partner led sales is more profitable for a vendor organisation? Pl don't get me wrong, I am not advocating to put a partner in a deal without reason but if you want a more profitable deal where a partner is involved, try to get out of the way. They will get you a better overall deal. I would like to lay out my case here:

1. Margin protection and financial discipline: Partner sales reps are acutely aware of the need to protect their own margins. Unlike vendor sales reps who might prioritise closing a deal at almost any cost, partner reps operate with a different set of constraints. They typically don't have detailed knowledge of your product’s gross or net margins, which forces them to be more conservative and strategic in their pricing. The thin margins they operate on mean that they can’t afford to make costly mistakes and as a result, they develop a sharp sense of financial discipline. This learning curve is steep but quick, making partner reps much more adept at maintaining profitability in deals than vendor reps, who might sacrifice margins for volume or speed.

2. Compensation structures drive smarter pricing models: Most partner sales reps are compensated not just on top-line revenue but also on bottom-line profitability. This dual focus discourages them from dropping prices impulsively just to close a deal. Vendor sales reps, on the other hand, may have compensation plans that incentivize closing deals quickly, sometimes at the expense of profitability. Partner reps, by contrast, are more likely to maintain price integrity, ensuring that the deal remains profitable for all parties involved.

3. Client relationship focus: Partner sales teams often don’t have control over key aspects of the product or service they are selling, such as features, pricing or delivery timelines. This lack of control shifts their focus to what they can control: the client relationship. Because they typically nurture relationships across various roles within client organisations, they have a more holistic view of the client's needs and challenges. This deep client understanding allows them to negotiate deals that are not only financially beneficial but also aligned with the client's long-term interests, leading to more sustainable and profitable relationships. I have seen partner sales reps sitting on the same side of the table

4. Resistance to price-driven pressure: The pressure to close a deal can often lead vendor sales reps to lower prices prematurely, sacrificing profitability for the sake of securing a contract. In contrast, partner sales reps, who are less likely to have such intense closing pressures, are better positioned to resist the temptation to drop prices. They understand that maintaining a strong relationship and delivering value is more important in the long run than simply closing a deal at a lower margin. This perspective helps ensure that deals are profitable and that the partner’s value in the sales process is recognized.

By empowering your partner sales teams and giving them the autonomy to manage deals, you can leverage their strengths in maintaining profitability, fostering strong client relationships, and resisting unnecessary price reductions. Partner-led sales; when executed effectively, not only bring in revenue but do so in a way that maximises long-term profitability and strengthens your market position. ?