For a lot of people in the channel, vendor programs have lost their allure. The reason? Many are out of step with current trends.
Precious metals. Rare stones. Platitudes a mother would only bestow upon her favorite.
I am, of course, talking about labels technology vendors give to their “best” partners. You know them by heart: “Platinum,” “Diamond” and “President’s Club.”
For a lot of people in the channel, these distinctions—not to mention the engagement programs behind them—have lost their allure. The reason? They are out of step with current trends. Partners no longer rally around the vendor with the best deal; instead they gravitate to those with superior technology and long-term financial rewards. The shift in interest—from sales rewards to customer outcomes—has resulted in a disconnect between the rewards vendors offers partners, and the things partners actually need.
This has been going on for some time. But it has apparently come to a head this early spring. See what experts are saying this week alone. On Tuesday, for example, channel consultant and occasional Penton Xpert contributor Gary Morris, CEO of Successful Channels, Inc., posted a blog on LinkedIn entitled, “Have Channel Sales Executives Forgotten Why We Have a Channel?” That same day, Larry Walsh, CEO of The 2112 Group, wrote an essay lamenting that “despite the assertions of vendors about their commitment to the channel, partners are fairly mixed on their vendors’ commitment to working with partners.”
On top of that, Computer Market Research began promoting its latest ebook, “The One Thing That Stands in the Way of Sales and Marketing Program Success.” In it, it poses the question, “Why do indirect channel incentive programs fail?” Also this month, Relayware, a provider of partner relationship portals, training assistance and loyalty development programs, released a new study that concluded that two-thirds of channel managers struggle to maximize channel partner revenue.
Then there’s the take of our friends from Elastic Grid, which has developed a marketplace to access, create and publish channel marketing campaigns that has been leveraged by NetApp, Juniper, Dell and others. In January, the company published a report entitled, “Reinventing Channel Marketing.”
The key take away from it: technology—be it the digital imperative, SaaS, APIs, etc.—has altered the way the channel operates, says Brian Dudley, chief revenue officer at Elastic Grid.
“Vendors that are taking alternative approaches are experiencing higher program adoption, executions and leads, which drives pipeline and ROI,” Dudley says. What is more, he adds, is “the channel is [actually] growing and most resellers are small entities (less than 10 employees). Vendors, thus, need a better way to activate the long tail of their partner ecosystem.”
Brian Dudley, Chief Revenue Officer, Elastic Grid
For some perspective on what’s going on, I turned to Carolyn April, senior director of industry research at CompTIA and Penton Xpert contributor. She previously wrote in the CompTIA Industry Outlook 2017 study that vendors face a mandate to revamp their programs to bring them more in step with current trends.
“Channel firms are becoming more finicky when it comes to partner program tastes," she writes. "What they once valued as essential from a vendor benefit standpoint is less relevant in today’s services-based market. Especially among partners heavily invested in consulting work and services, traditional incentives such as sales spiffs, upfront discounts and backend rebates are not what endears them to any one vendor over another. Indeed, while vendor-provided margin once accounted for a majority of their revenue, channel companies today credit their own sales and marketing activities for driving the bulk of sales. What does this mean for vendors? Time to revamp partner programs.”
In conjunction with the changes under way at key vendors, more partners have begun to rethink their sales strategies. They recognize that customers are doing their research online and coming to them with solution-based needs, not individual product requests. Recognizing this, partners should build a strategy for the long haul, according to Dudley.
“This is a marathon, not a sprint,” he says.
Which begs the question for vendors and IT consultancies alike: “Is the program you rely on built for the long run?”