Are You Getting the Most From Your Channel Partners?

Optimizing Channel Partner Incentive Programs

Channel Partner Frustrations

Sellers make significant investments in their channel. However, even though channel partner incentives are the primary means to drive behavior and results, they are often underestimated because of the effect of contra-revenue. Despite these investments, only some marketing and sales leaders are satisfied with their channel partner relationships. As one executive commented:

“We’re spending all this money, but our channel partners aren’t providing the value that we expect. They simply feed off their existing base instead of driving new business.”
– Senior Channel Sales Executive

Aligning incentives is a major issue for all companies with significant partner-driven revenue. Challenges include a need for pay-for-performance within the channel incentive program, stemming from channel program investments that are not aligned with business objectives.

Common symptoms of a poorly aligned program include the inability to recruit, enable and retain the right partners, lack of a compelling partner value proposition and rewarding partners for behaviors the selling company does not value.

Leadership and Strategy Alignment

If these symptoms repeatedly occur in channel partner relationships, it is probably time to revisit the strategy and leadership alignment behind the program to identify root causes, which frequently include:

Leadership centric – Corporate leaders did not consider channel needs and requirements until after they set the internal strategy.
Channel ignorance leadership – The company was unaware of channel capabilities or had misaligned expectations.
Strategy timing – Timing for direct and indirect channels is not aligned.
Heavy over-allocations that are driven by corporate expectations
Strategic disconnect – Direct and channel strategies are being executed in a silo or are at odds with each other.

The solution lies in revisiting the strategy while ensuring leadership alignment will prevent gaps in the channel program design.

Channel Strategy Is Dynamic

Channel strategy constantly responds to industry, customer and internal changes, including market and business conditions, which will impact the channel strategy in three areas:

Market conditions

Market conditions can change quickly. For example, industry sectors have recently experienced a shift to services-led selling, increased importance of cloud applications, growth of SMB and emerging markets, preference and reliance on mobile apps, and increased government regulation. These conditions must all be monitored and incorporated into channel strategies.

Sales and Service

Sales and service objectives reflect the change to a customer-centric focus as companies evolve their product and service offerings. As a result, companies continue to change their go-to-market coverage, expand into new markets and adapt to continuously changing partner roles.

Partners are evolving

Partners are evolving to adapt to new business realities and customer demands, including shifting from reseller to service provider. Customer-driven insights are crucial to understanding how channel players must contribute. Channel plays are also adapting to the continued shift from service to managed service while finding ways to add value to the distribution process.

Improving Channel Program ROI

Receiving the intended value and return from a partner program investment requires leadership commitment, advanced technical capability, and adapting to a continuously changing business environment. Ultimately, all channel partners must align with and drive behaviors toward a single customer value proposition.

Partner program investments will improve their ROI by combining efforts that address all channel partners’ needs.

Incentives and rewards

Incentives and rewards can include finder’s fees, deal registration, discounts and rebates, and special incentives and rewards

Sales and Marketing

Sales and Marketing can combine forces by offering consistent marketing materials, joint marketing funds, joint development funds and lead generation

Advanced tools and information

Advanced tools and information can improve visibility throughout the channel and include dealer portals, product promotions, newsletters and insights

Training and certification

Training and certification programs improve the knowledge base and are shared with customers, including product training, technical training, authorization and product or solution certification

Investing in these programs will prevent program design disconnect while highlighting channel partner contributions’ value. Outcomes include clearly defined roles, responsibilities and rules of engagement while rewarding sales and partners for performance.

A successful channel partner programs allow companies to focus on growing their business, differentiating rewards for specific sales objectives, differentiating programs by partner type and ultimately enhancing partner capabilities with advanced skills, marketing support and unique offerings.

Getting the Most From Your Channel Partner Program

Alexander Group has the expertise to help companies get the most out of their channel partner investments by combining end-to-end sales coverage strategies and targeted sales compensation programs.

Maximize the Value of Your Partnerships

Alexander Group can help your business establish and strengthen these mutually beneficial channel relationships.

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Developing Your Channel Partner Strategy

A successful partner strategy helps accelerate growth. Alexander Group can help you identify your partnership needs.

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Knowledge Drives Growth

Alexander Group conducts ongoing revenue-focused research and benchmarking to drive better results for your dynamic organization.

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About Alexander Group

Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.