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:
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.
More Resources
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