Channel Program Revolution

Channel Program Revolution

One of the largest drivers of business evolution in our industry today is the changing nature of vendor routes to market and its impact on channel programs. The options for vendors have expanded to include the likes of value-added resellers, dealers, service providers, distributors, manufacture reps, consultants, and technology alliance partners. Simultaneously the “traditional” sales channel has evolved its business to include dedicated sales and marketing teams, business development staff, and an ever-growing list of new service offerings focusing on selling total solutions versus just a product.

With this evolution, channel marketers are continually tweaking their channel programs in an attempt to capture the partnerships of these diverse routes to market. The wider variety in channel segments is in turn driving variations between program structures for each segment. From the channel partners’ perspective, simultaneous participation in multiple programs from a variety of vendors has become so complex that you are seeing the creation of new job titles like “vendor manager” within some organizations. Add to that the myriad new manufacturer relationships represented by new startups and changing business models, and it is logical that they are becoming more selective in choosing vendors and the programs that are most beneficial to their business.

The days of channel partner segmentation being defined as silver, gold, and platinum tiers tied to volume alone are long gone. Some fresh ideas that I am sure we will see in future programs start off with the most obvious: keep it simple, and make it easy to do business together. Remove the complexity, streamline the processes, and create a path for timely resolution to issues that can be a win-win for vendors and partners alike. Throw away the 100-plus page program and certification guideline documents. Tomorrow’s programs should be focused as a means to the partners’ success. Programs should align mutual goals and leverage the areas that are mutually beneficial.

Change SPIF, or sales performance incentive fund, programs into loyalty programs. Instead of offering incentives for just closing sales, create layered, behavior-based incentives that contribute to the overall sales success. This could include activities like completion of training, updating forecasts, as well as closing the deal. They could be structured with a point system that can be accumulated and redeemed over time for products, travel, and services. This allows rewards to be easily targeted at various roles within the organization and for a diverse range of actions.

With more vendors putting an increased emphasis on building technology alliance partners, offering channel programs and benefits that align multiple technology alliance partners to create a more strategic selling opportunity for joint channel partners of the companies seems like a simple idea.

It is also critical that the next generation channel programs provide partner development tools that not only support the goals and objectives of the overall program but also bring greater value to the partner. One of the most overlooked areas is a tool to guide the channel partner in how to make money selling your product. Think of it as an online business planning tool that allows them to enter their growth plan that not only details products, pricing, margins, staffing, and marketing, but also shows training, demo equipment, and other investment costs to provide a customized business plan, and profit and loss statement in a short amount of time.

Speaking of training, there are a lot of instructor-lead and e-learning courses in our industry, but most of it is technology and/or product focused. It seems that the next step should be workflow-training tools that could serve dual roles, teaching them how to complete a task with real-life output when concluded. These could be sales driven, such as walking a sales person through the selling process with a customer while creating a complete proposal, or management driven, such as creating a ROI-driven marketing plan.

Another area where a good tool could be invaluable is management of market development funds, or MDF. Almost every channel program has some form for funded programs to generate sales opportunities, but they lack the ability to accurately forecast and track return on investment from the program.

The good news is that vendor companies are beginning to take new approaches to channel programs and how they are partnering to incentivize and reward success. These new approaches will retain classic financial metrics, but will also incorporate future-value metrics like some of the items mentioned above.

Randy Riebe is a senior channel sales management executive with 18-plus years of experience building teams for global technology providers within the unified communications, audio/video, and control and automation industries.

Partner Management Tools for Manufacturers

As the routes to market continue to become more complex, many companies are turning to new-breed partner relationship management or PRM systems. I say “new breed” because many of the legacy PRM systems don’t have the tools and resources to handle many of the things discussed in the article. When you mention PRM, typically the first question is, “why is it different than our customer relationship management (CRM) system?” When you sell through the channel, the complexity is much greater than a company that sells directly to the end user, and the tasks that need to be tracked and managed are much different.

PRM is a component or add-on in many CRM solutions, and there are also vendors that offer specialized PRM products. One point of note is that the integration of PRM with CRM, marketing, and ERP systems is critical to achieve the full benefit of what a PRM can do for you.

PRM solutions typically provide the following key tools: partner portal, dealer registration, lead distribution, MDF management, and co-marketing campaigns; they typically allow customized branding, automated partner onboarding, multitier partner support, and detailed reporting and analytics. Options may include training and certification, CRM integration, document management, channel communications, and business planning.

A few of the key players, in no particular order, include Channeltivity, Relayware, Treehouse Interactive, Salesforce Sales Cloud Partner Management, and many more.
—R. Randal Riebe