When is the Right Time to End a Sales Partner Relationship?

By Seth Jacobsen Posted on 7/8/15 7:30 AM

It was never supposed to be like this. When you first brought on that sales partner, you had high hopes. Maybe this wasn’t the first time you had partnered with someone and just assumed you would learn from past mistakes. Maybe it just made sense on paper that such a mutually beneficial relationship would turn out profitable.

In any case, here you are, wondering if it’s time to let a sales partner go or not. If you’re cautious about cutting ties, don’t feel bad. This is an important business decision you’re about to make, so you should take the following factors into consideration.

When is the Right Time to End a Sales Partner Relationship?

READ MORE: How Can I Automate a Sales Incentive Program for My Partners Using PRM Software?

The Partner Is Costing You Money

This one is a no-brainer. Sales partners are brought on board to help you grow your business profitably. Before you brought on that partner, you probably ran the numbers to evaluate when your upfront investment in time and resources would begin to pay off. Hopefully you had an objective approach on which to base that decision.  

All partners will come up to speed at a different rate and it is important to provide them the tools they need from the outset to be successful. During the initial phases, you may have to invest more in some partners than others. However, if it’s past that point and this partner is leaving MDF (Market Development Funds) on the table (or worse, wasting the MDF they have recieved), it’s probably time to take a closer look. There may be other factors at play but, at the very least, you need to sit down with them and make it clear what needs to take place to move forward successfully.

Opportunity Cost

Even if a sales partner isn’t losing you money, that doesn’t mean they’re still worth your investment. It may be cultural differences that keep business priorities misaligned, or perhaps that partner’s existing customer base is not well suited for your products and services. Whatever the case, keep in mind that there may be more profitable opportunities out there in other markets that are worth pursuing instead. If your company has limited bandwidth in terms of channel support and resources, it is critical to make the most of those with partners that are most likely to succeed. As a result, you may have to reduce the number of existing partners before adding new ones.  

Communication Is Poor

You can’t expect that things will go well with a sales partner without the proper lines of communication. Making an earnest effort to reach your partners is only half the battle. You need to understand that their time is limited and whatever information you intend to provide needs to add value.

If this has already been taken into consideration and you realize that some partners are just not actively engaged, try to reach them in a more personalized or one-on-one environment to see if their needs are different than the rest of your partners. You may come to find out that they are more likely to work with your competition or that their internal resources prevent them from promoting your products as much as you would like. If either of those are the case then you have made your decision that much easier.  

When is the Right Time to End a Sales Partner Relationship?

They’re Hurting Your Reputation

What if a sales partner was misrepresenting you? Money is something you can eventually earn back. But your reputation? Don’t be so sure. In the age of social media, companies have had to close their doors after decades of business because of one slip-up.

You have enough on your hands managing your own company. The last thing you need is a sales partner becoming a liability either through questionable practices, poor service or some other behavior that will reflect poorly on you.

Even if a sales partner doesn’t have a connection to you that would be obvious to the public, they can still hurt your reputation. Remember that your partnerships are a reflection on your business so have some guidelines and protocol in place to deal with these situations.

They’re Violating the Terms of the Partnership Agreement

With practically any of the above, you may want to sit down with your partner and talk before cutting them off. Make sure there’s not something else at play. However, if you catch a partner doing something that is a clear violation of your agreement, you need to draw a line in the sand. This can relate to improper pricing or even illegal kickbacks to the end customer. This needs to be dealt with immediately and permanently before your own reputation is tarnished.

Ending a relationship is never easy and the one you have with a sales partner is no exception. If you hold your partners accountable and set realistic expectations from the outset, you’ll have much more solid ground to stand on when the time comes.

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