Examining Partner Lifetime Value® as a Crucial Aspect of Success (Part 1 of 6)

As the supply chain model changes to be increasingly based on collaborative partnerships, vendors are looking for ways to inspire loyalty in their partners. AchieveUnite undertook a data-driven research project aimed at investigating the ways in which I.T. channel partners and vendors can work towards more collaborative, successful partnerships. This research was based on a concept called Partner Lifetime Value™ which evolved out of Customer Lifetime Value.

The value of loyal customers is well established, both in empirical literature and industry wisdom about best practices. Lifetime customers are of great value to a business—they increase profit by saving on the costs of new customers, for instance, and generally provide a reliable metric of success. Accordingly, businesses place a premium on developing customers who remain loyal throughout their lives.

Research has shown that cooperative relationships with partners can also greatly benefit profitability and are an important measurement of success, yet many of those in business are deeply unsatisfied with their partnerships. How can this situation be changed? Knowing the benefits of healthy partnerships, what can service providers, MSPs, and their channel partners do to improve their B2B partnerships and cultivate loyalty?

This question is complicated by the fact that, while research shows that B2B cooperation can benefit profit, it has also shown that the context and the type of cooperation is important. Cooperation can take many forms—sharing information, tackling problems together as businesses, etc. and not all these aspects of cooperation have equal impact. How can a company know which aspects of its B2B partnerships need improvement and how can this improvement be carried out?

These questions inspired AchieveUnite to undertake a study of Partner Lifetime Value™, a quantifiable measure of the success of channel partnerships. AchieveUnite wanted to investigate the ways in which I.T. vendors who were focused on developing loyal, growth-oriented partnerships were taking proactive steps to build Partner Lifetime Value®.  The study assessed business’s channel partnership practices and identified the areas and practices most crucial to success.  Practices such as having a conscious partner profile, were found to be highly predictive of success, and broad domains of partnership practice such as “Investment and Planning,” and “Allegiance and Cooperation,” were identified.

One crucial aim of this study was the notion of going beyond B2B partnerships as merely sustainable. Previous research on B2B partnerships has often focused on the costs of switching business partners, and other deterrents of leaving partnerships. This research looked not only at costs of leaving, but at the notion that business partnerships may be actively enriching and serve as sources of growth.

Curious to learn more? This is just the first in a 6 part blog series of blogs about our Partner Lifetime Value™ study and its results. Check back next week for more!



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