Appreciating the Power of Experiential Bias in the Channel Partner Experience

Appreciating the Power of Experiential Bias in the

Channel Partner Experience

By Michael Vizard

Everyone involved in sales knows a satisfied customer is more likely to buy additional products and services. That’s why so much time and effort is spent using modern applications to help transform the customer experience. But most IT vendors don’t understand—or appreciate—the need to transform the channel partner experience for the same reason. Partners that have a better experience will be more loyal to IT vendors that provide that experience, which translates into more business.

At the core of any great channel partner experience is, of course, clarity. Partners need to know how much they can make on any given deal within a specific time frame. The less friction there is, the more likely a partner will develop an experiential bias toward doing business with particular vendors.

 

There are FIVE core functions that channel managers must master to create that experiential bias in the channel partner experience:

These are the new table stakes in the channel, and just about every major vendor has some form of a deal registration process in place. Getting deal registration right, however, is another matter. If it takes days and weeks for partners to register a deal, most simply will move on. Vendors that are willing to acknowledge and reward partners’ sales efforts first and consistently will enjoy the inside track. Even if a partner can make more money selling another vendor’s product, often there’s no substitute for a sure thing when it comes to the channel partner experience.

 

  • Market Development Funds (MDF)

Most partners pour their limited resources into sales and engineering, where the return on investment (ROI) is clear to all. Marketing is still more of an art than a science, which is a big reason why so much money allocated to MDF goes unused. Partners need more than access to a general fund; they need access to ideas and associated collateral to execute against. Most partners don’t have huge marketing departments, so they need access to turnkey marketing initiatives to drive face-to-face meetings using events and, increasingly, social media. It’s not enough for vendors to provide “air cover” by aiming marketing campaigns at end users; channel partners need to know how to employ MDF to mix and match sales and marketing collateral in the moment to drive deals.

 

The channel as a whole has a love-hate relationship with promotions and incentives. The senior leadership of a channel partner doesn’t always appreciate when the efforts of their sales teams are redirected by these programs. What’s good for the sales team isn’t always in the best interest of the channel partner when it comes to overall profitability. At the same time, these leaders are quite aware sales teams are “coin operated.” Any opportunity to make a little extra money goes a long way to motivating salespeople. Given the fact that it takes six months or more to train new salespeople, the economic values of promotions and incentives is abundantly apparent. What most partners really want is a rational approach to incentives and promotions that aligns with the programs through which their organization makes the most profit. Channel managers must be able to target incentives and promotions not only to help salespeople make some extra money, but also to align with the strategic interests of the partner organization.

 

  • Rebates

It’s no secret compensation drives behavior. Partners will align their sales efforts based on the margins and rebates available to them. Vendors increasingly don’t have much room to maneuver when it comes to pricing, which means partners are relying more on rebates made after the sale to determine which IT vendors to promote to their end customers. But if it takes too long to claim those rebates, channel partners will move on to another vendor. IT vendors that make it easier to claim rebates are more predictable sources of revenue for partners, and, like any business, channel partners need to know when and how much revenue they can count on. If claiming rebates is a challenge, most partners will likely shift their focus to IT vendors that are committed to completing the transaction end-to-end rather than focusing only on the commission owed to partners.

 

No one wants to be demoted. Partners that are changed to Silver partner status after years of being considered Gold partners will harbor ill feelings toward the IT vendor, even if the move ends up helping them thrive financially. That said, channel managers must know which partners are generating the highest revenue for them. Thus, they must identify the top 20 percent of their partners who drive enough revenue to be worth recognizing at the top of their channel, and they must make sure partners have every resource they need to help keep them there. Just as significantly, channel managers need to identify which partners will be the next star performers based on either revenue or profitability.

Finally, mergers and acquisitions are a fact of channel life. Most IT vendors have had their best partner acquired by another channel partner company that is the partner of their arch rival.

 

Summary

These issues and more were discussed recently during a “Top 5 Benefits to Automating Your Channel” webcast, which can be accessed here. There are a lot of good reasons why channel teams need to automate processes to benefit their own organizations, but the best reason will always be to provide a superior channel partner experience that is so elegant that partners wouldn’t even consider going anywhere else.

 

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