7 Steps that Bring Clarity to Channel Sales and Marketing Programs
Why do channel partners continue to opt out of sales and marketing programs?
This question has haunted vendors for generations; it simply doesn’t make sense why channel partners continue to ignore extremely profitable opportunities, especially when the incentive is easily attainable.
So, what are vendors doing wrong?
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Their programs are too obscure.
Following are seven things vendors either fail or forget to implement when designing sales and marketing programs for channel partners.
1.) The Start Date
It may sound obvious, but not including a start date is one of the most common mistakes we see in the channel. Think of it as telling a friend it’s going to rain without specifying when or where.
Regardless of the program type, communicating to your channel partner when the actual incentive becomes active is crucial for high program adoption and efficiency in driving revenue.
You should also be clearly stating ‘where in the channel’ the program becomes active. Does it begin the moment your partner purchases from you, or the moment after your partner sells to a customer.
This avoidable yet costly error affects your program in two ways. First, you leave partners guessing which program applies to which transaction — almost guaranteeing chaos and a flood of angry and confused participants.
Second, your auditing team is forced to establish a start date while the program is in effect.
Their responsibility of evaluating claims now becomes a game of trying to distinguish which partner is eligible to receive which incentive program.
In order for sales and marketing programs to become successful, auditors must know the exact timeframe of when to associate partner sales and performance with a designed incentive.
The end result not only reduces productivity and program ROI, but also weakens the relationship you’ve worked so hard to establish with your channel partner. This creates a cocktail of frustration and confusion for not only channel partners, but your internal staff as well.
2.) The Expiration Date
If not implementing the start date is troublesome, not documenting the end date will create even more problems, particularly in terms of motivation as sales and marketing programs are built with the idea they will create a sudden surge in channel activity.
Without an end date, partners become complacent, thinking they have all the time in the world to qualify for a program. By clearly communicating there is only a specific amount of time to purchase from you or sell to a customer, will help to motivate partners and instill urgency and productivity into their workflow.
Ultimately, channel sales and marketing programs should be used as business driving tools that drive revenue and help you better understand current market conditions. They shouldn’t be used as an endless perk for doing business with you.
Whether presenting a new product or implementing a strategic program to capitalize on a specific market, clearly stating the start and end date creates something tangible as partners know the exact timeframe of when a program is and isn’t available.
3.) Partner Eligibility and Exclusivity
One of the most important qualities of creating a well-defined program is to establish who can play.
This step should be used to pinpoint who you want participating in the program, which is critical in achieving your goal efficiently and qualifying transactions. Correct partner program selection and recruitment also helps achieve maximum partner participation with least possible conflict and, if you plan on growing your revenue, your team must be able to associate the right partner with the right program.
Each channel program should be tailored around your partners, your products, their competitors, their end customers, and market position. Overall, the better you’re able to understand partner’s end goals, the more you will be able to realize your own — and the more effective your program will be.
Segment your partners carefully and clearly state who is eligible to participate in each program. For example, is the program open to:
Direct Marketing Resellers? Distributors in a specific market? Are VARs able to participate? Are low-performing resellers eligible to join? Is it open to ISVs who haven’t purchased from you in over six months? Is the program only open to one specific partner?
The more you are able to specify exactly who is able to participate in the program, the less confusion and confrontation you and your partners will experience when paying out the incentive.
4.) Qualifying Product
Clearly stating which product or product family applies to which program is essential to communicate. Aligning your sales and marketing programs to encourage the sale of slow moving units is a big reason why channel programs exist.
Making clear to your partners which product qualifies to which program — as well as the volume of units needed to be resold on purchase — ensures your incentive was earned in conjunction to fulfilling your business goals.
5.) Program Rules
Similar to establishing which products qualify for which program, detailing the individual rules needed to participate helps create an objective playing field. For example: How much product training or technical sales preparation is needed for program eligibility?
What is the minimum revenue commitment level? Is there a minimum or maximum quantity needed to be purchased or sold? Does your partner need to sell to a specific market or end-customer? Must partners participate in quarterly sales training? Does your partner have to feature your solutions in their marketing and sales activity? Did your partner successfully attain the quarterly sales revenue goal? What is the deadline the claim must be submitted after-purchase?
Whatever programs rules you choose to instill, it is crucial they are clearly communicated and easily traceable within the program documentation.
6.) Is The Program Stackable
Stacking, in a nut shell, is disclosing whether or not a single transaction applies to multiple programs and, if so, how those programs’ discounts are prioritized.
Stacking also allows partners to pick and choose which transaction offers the biggest bang for their buck. It’s crucial this is clearly communicated on the program documentation, as it discloses whether or not a transaction is exclusive to one program. If multiple programs can be added to a single transaction, which of those programs retains the highest discount, and vice versa.
Along with detailing the benefits and opportunities the program creates, channel partners want to know as much information as possible in order to ensure their efforts don’t result in a waste of time.
7.) Requirements When Submitting A Claim
The final piece of a well-defined channel program is to detail the requirements for when partners submit claims. On top of being one of the most important components of a channel program, this also happens to be the most widely overlooked.
Partners should be provided with a roadmap or checklist that is easy to follow and explicitly outlined. Some requirement to consider including are:
The program number The invoice number The part or SKU number The invoice date The amount of dollars to be claimed
Whatever information you think you need in order to efficiently and accurately evaluate a claim, add it. After all, it’s better to be safe than sorry, especially when thousands or potentially millions of dollars are at stake.
By following these seven steps, you’re well on your way to creating a program that brings clarity to a subject that is usually confusing and obscure. At the end of the day, a successful channel sales and marketing program relies on how well you’re able to communicate with your partners.
A thoroughly detailed channel program ensures a happy partner base, and a happy partner base ensures a successful program.
Partners will appreciate this because you’ve helped to make their job easier, and by making their job easier, you set yourself a part from the competition while developing a more successful and productive business in the process.