I got a call last year from an ISV founder who wanted help fixing his "recruitment problem." He'd signed nine VARs in eight months and closed one deal. He wanted a better prospect list and a sharper pitch for the next round of partner outreach.
I asked him one question before we talked about any of that. What does a partner make on a $40,000 deal of yours, in dollars, in the first year?
He didn't know off the top of his head. We did the math together on the call. Between referral margin and a thin implementation scope, a VAR closing that deal made about $3,200 total. For a rep who carries a quota and has a dozen other products in their bag, $3,200 doesn't clear the bar to get out of bed for. It's not that the partners were bad. It's that nobody would rationally prioritize your product over something that pays four times as much for the same selling effort.
The tell
If you've recruited a reasonable number of partners and none of them are bringing you deals, the instinct is to blame the list, the pitch, or the enablement. Sometimes that's right. But there's a specific pattern worth checking first: partners sign up, seem enthusiastic in the first meeting, and then go quiet. They're not ghosting you out of rudeness. They ran the math themselves, privately, and moved on to something that pays.
VARs are running a portfolio. Every product in their bag competes for the same finite selling hours. A partner doesn't need your product to be the best one available. They need it to be worth the opportunity cost of not selling something else. If the commission, the deal size, or the services attach rate doesn't clear that bar, no amount of enablement fixes it. You'd just be training people more efficiently on a product they've already decided not to prioritize.
Run the VAR's math, not yours
Founders usually think about pricing from the buyer's side and the company's side. Is it competitive. Does it cover cost of goods and support. Does it hit the revenue targets in the model. All fair questions, but they skip the third party who actually has to go pitch it.
Sit down and calculate, in real dollars, what a partner earns on your average deal size in year one and over a three-year term if you have recurring revenue. Compare that to what a VAR in the same ecosystem earns reselling a mid-market ERP module or an established add-on they already carry. If your number is meaningfully lower, you don't have a partner engagement problem. You have a math problem, and partners figured it out faster than you did because they run this calculation on every vendor that walks in the door.
This is uncomfortable to hear if you've built your pricing around your own margin targets and don't have room to move. It's worth hearing anyway, because the alternative is spending eighteen months on recruitment events and enablement portals that can't overcome a bad number.
It's not always about raising the percentage
The fix isn't automatically "increase the referral fee." Sometimes the margin is fine and the problem is deal velocity. A partner earning a good percentage on a deal that takes fourteen months to close is still doing a bad trade compared to something that closes in six. If your sales cycle is long, look at services attach, renewal residuals, or a faster path to a smaller first deal that gets a partner selling and earning sooner, even if the initial contract is modest.
Sometimes the issue is deal size itself. If your product sells for $8,000 a year, no margin percentage makes that number interesting to a VAR whose average deal in the ecosystem is $60,000. That's not a channel problem to solve with better partner ops. That's a product-market fit or packaging question, and it deserves to be treated as one instead of getting routed through six more months of partner recruitment that was never going to work.
What I tell founders who don't want to hear this
It's tempting to keep tweaking the partner program because that feels like forward motion. New portal, new deck, new outreach sequence. None of it touches the actual constraint if the constraint is economic. I'd rather tell a founder in month two that the numbers don't work for a VAR than watch them burn a year discovering it the slow way through a program that never produces a signed deal.
If you've already run this math and the numbers hold up next to comparable products in your ecosystem, then fine, the problem probably is recruitment, enablement, or follow-through, and that's a different conversation. But check the math first. It's a twenty-minute exercise that can save you a year.