Time is our most precious commodity. Waste yours or your channel partners time at your own peril. Effective deal registration programs not only establish who you’ll be putting your resources behind, they can also augment partner time management very effectively. Effective deal registration programs make commitments readily visible to partners so they know before they start investing time in a new opportunity.
Two channel partners in the same market were both trying to sell the same product to the same clever customer. A customer who cleverly complained to one partner that their pricing wasn’t as good as the pricing from the other. In reality they were both the same. Nonetheless, the partner reduced their price. At this point the clever customer contacted the other partner to inform them their price was no longer competitive. As a result, they, too, lowered their price.
Eventually the completely content and clever customer ended up with a far lower price. However there wasn’t much difference in the financial outcome for the partner who won the deal and the one who didn’t. The only thing that really changed was that the margin became tissue-thin. Meanwhile, the vendor remained wholly oblivious to the entire deal.
At one time in the early development of the IT channel, this scenario was playing out constantly. Firstly, it was two partners pursuing the same customer. After that, vendor’s direct sales force was competing against channel partners. Then it got worse.
Many partners saw the wisdom of having a vendor’s rep join them on sales calls to show customers the closeness of their relationship. Along with how they could make wonderful resources available. Customers started scratching their heads when several local channel partners showed up with the same vendor rep. Imagine how awkward it became when the customer greeted the vendor rep with “nice to see you again!”
The greatest casualty in all this is wasted time, our most valuable resource.
Partners, vendors, direct sales reps, and customers were repeating the same process with different combinations of others. No new persuasive value was conveyed to the customer. The only thing the customer became encouraged to do was to play each partner off against each other to get a better price.
A few vendors with vision quickly realized they needed to do something to conquer this channel conflict. They wanted to save everyone’s time, help partners preserve their profit margins while also increasing deal closures and decreasing everyone’s cost of sales. It was also important for the vendors to provide their partners compelling reasons to remain loyal.
The most popular solution that emerged was deal registration. Channel partners were required to register the deals they were working on with the vendor. Once a deal became registered, several aspects were now under the control of the program. Including:
Pricing – In some cases the first partner to register an opportunity was accorded a special discount enabling them to be more price competitive than others. In other cases where exclusivity was not part of the program, the special discount was only available to those partners who registered the deal. This allowed the registered partner to preserve their margin on the product sale. The one challenge to this objective was the existence of other competing vendors.
Protection – Some programs purported to prohibit other channel partners from competing with the registrant. In most cases, it meant the vendor’s direct sales force was completely prohibited from competing.
Partnering – Though many partners elected to ignore competition prohibitions, the vendor agreed to only participate in joint selling activities with the partner who had the deal registered. This eliminated having multiple joint calls to the same customer. Effective deal registration programs also make special resources available to the registered partner, sometimes extending to marketing funds for larger opportunities.
Preference – For most programs, the only way to change the registered partner was for the customer to express their preference for a specific partner in writing. Given that the speed at which a deal is registered is not a valid arbiter for which partner is best to serve the needs of the customer, this provides leverage against first-come-first-served being the constant rule.
Pipeline – The vendor and the partner often agreed to provide updates on their progress to each other for all registered deals. This improved visibility which led to more informed strategy.
As with managing the many moving parts of most processes, deal registration struggles with several challenges and rules-based questions. Many customer corporations are enormous. What happens when different partners and/or direct salespeople are pursuing different departments in the same company, how is that managed? Many consider each department to be the equivalent of a company unto itself. Deal registration makes sense for large opportunities with large corporate customers, but what about small and medium-sized companies? Will there be exceptions to first-come-first-served deal registration? How will partners be required to qualify themselves for pursuit of a given opportunity? How will the myriad of small details involved be accurately tracked in a timely manner?
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Removing repetition and defining the rules of engagement accelerates the sales process moving it to closure far faster. Partners proceed to invest time and effort into competitive sales efforts with far greater confidence. Vendors and partners improve the closeness of their relationship when they demonstrate their commitment to each other by remaining fully compliant with those rules. Customers avoid time-wasting repeated meetings and move toward a successful solution far faster. Effective deal registration removes the damaging effects of channel conflict in a way that is acceptable to all. Everybody wins.