Competition for recruiting Solution Providers has historically hinged on one of two factors: the technical superiority of your products, or the “channel friendliness” of your partner program. And while both factors are still legitimate elements of your relationship with Solution Providers, the game is changing.

1. Engage Your Partners in the Total Business Opportunity
Engage Your Partner in the Total
Business Opportunity
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2. Engage Your Partners in the Total Business Opportunity
Competition for recruiting Solution Providers has historically hinged on one of two
factors: the technical superiority of your products, or the “channel friendliness” of
your partner program. And while both factors are still legitimate elements of your
relationship with Solution Providers, the game is changing.
In the past, vendors were content to have partners in the program and generating
whatever results they could... channel growth came more from new partners than
from existing partners. But today the hot topic is loyalty - represented by exclusivity
for vendor relationships or more aggressive engagement on the part of the Solution
Provider. If loyalty is the goal, then the conversation needs to be broader than just
products and program.
Leading vendors have expanded the conversation to include the total partner business
opportunity. In the past, financial conversations were limited to talk about margins...
but margins are shrinking across the board, and partners are asking for more. So how
do vendors balance the need to provide partners with an attractive business opportunity
with the financial reality of shrinking margins? The answer lies in the other compelling
elements of the financial relationship between vendors and partners.
The recommendation is not that you break the bank by adding expensive new program
elements that drive up the cost of your program, but rather to make certain you’re giving
proper exposure to all the ways you already help partners earn money. Consider how
each of these program elements helps position you as a more attractive partner for
Solution Providers:
• Product Margin - The first criteria all partners consider when evaluating business
opportunities is the margin available directly on the re-sale of a product. But rather
than discussing only the raw margin in terms of percentage, expand the conversation
to also address the total financial opportunity, which is a function of the size of the
market opportunity as well as the velocity of sales through the channel.
• Maintenance / Support Program Margin - Most vendors allow partners to profit from
the sale of the initial warranty and support services - whether the partner will deliver
those services or not. But more vendors than ever are allowing partners to participate
in the renewal of these service packages as a way to provide partners with future
earning potential.
• Services Opportunities - Whether partners simply re-sell the technical and
professional services provided by you, or they actively engage in delivering services
around the transaction of your product, the simple fact is that without the sale of your
product, the services opportunity would not exist. In other words, whether you’re
paying partners for selling services, or they are directly billing customers for their
services, partners stand to sell high margin services as a result of your products.
• Performance Accelerators - Whether paid in the form of back-end rebates for
reaching sales targets, or in the form of additional margin at specified sales plateaus,
performance incentives give you the double benefit of being able to motivate more
effort from your partners as well as rewarding those who do perform well.
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3. Engage Your Partners in the Total Business Opportunity
• Marketing Funds - Vendor programs typically provide marketing accrual funds to
partners, but because vendors rarely promote these funds proactively, partners tend
to think of them as an entitlement rather than a shared investment in the growth
of the partner’s business. To get full credit for this investment, emphasize not only
the accrual funds, but also the other resources that go into your marketing support
programs - development of campaign materials, program administration, tracking
and measurement, lead administration, etc.
• Investment Funds - Initiative-based funding is an emerging opportunity for
vendors to influence the behavior of partners as well as help grow their businesses.
Rather than accruing funds after a sale is made, investment funds happen before a
transaction, and can take the form of marketing programs, co-funded headcount in
the partner’s organization, pre-paid business services, etc.
• Deal Registration Accelerators - Many vendors have learned that a small investment
in a deal registration incentive can offset much more expensive investments in end-
user demand generation campaigns. This by no means eliminates the need to market
to end users, but it can reduce the investment required when partners are motivated
to step up and fill more of the demand generation responsibility.
• Upsell / Cross Sell Incentives - Most vendor programs put a disproportionate amount
of emphasis on Solution Providers bringing in net-new customers. New customers
are valuable, but they take longer to win and cost more to persuade. Don’t eliminate
incentives for winning new customers, but to add a component that pays partners
an incentive for winning more business by penetrating existing accounts more
effectively.
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4. Engage Your Partners in the Total Business Opportunity
ABOUT IPED
The Institute for Partner Education & Development (IPED) is the profes-
sional services division of the CMP Channel Group. IPED applies proven
best practices to deliver customized recommendations that accelerate
channel revenue through access to exclusive data and expert analysis.
With over 20 years of institutional knowledge, IPED is the only professional
services organization that can leverage the resources of the CMP Chan-
nel Group, the unrivaled leading provider of information and access to the
Channel. We empower vendors to understand and react to the motivators
and business value propositions that matter most to their partners.
Services for Vendors
• IPED empowers vendors to understand and react to the motivators and
business value propositions that matter most to their partners.
• This knowledge enables vendors to forge mutually profitable and long
lasting relationships with their channel partners.
• Differentiate their approach to channel partnership by enhancing their
business value proposition.
• Through data collection, analysis and interpretation, IPED provides market
intelligence that will set them apart from their competitors.
• IPED’s proven methodology helps technology vendors support to their
Solution Providers and present their portfolio of technology and business
solutions for a mutually beneficial business relationship.
For access to channel sales and marketing resources that focus on increas-
ing channel revenue, contact:
The Institute for Partner Education & Development
www.iped.com
Toni Clayton Hine
tclayton@cmp.co
212-600-3113
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