Channel Partner Mechanics: Why Deal Registration is the Starting Line
by Casey B. Lockwood
Deal registration was created to provide deal and pricing protection to VARs (Technology Resellers). Prior to deal registration, VARs would often spend countless hours consulting, planning, strategizing and generating sales proposals only to lose the deal to a competitor who undercut them at the finish line. The scenario above, and many others like it, birthed the concept of deal registration; a way for resellers to notify a vendor about a net new opportunity and, in exchange, the vendor would provide additional points of margin as a means to “protect” the deal for that reseller. Originally applied only to ‘Big Deals’, the practice has become far more widespread to the point where many vendor channel partner programs feature persistent registration, expecting every new deal to be registered.
While the process of registering deals does provide this pricing protection, this is only one of the many factors that are now in play in today’s complex and evolving tech space. Pricing protection alone is hardly a sufficient reason for technology vendors to invest large amounts of time and energy into making deal registration easy for VARs. As deal registration became ubiquitous, smart vendors quickly realized that the greater benefit that deal registration provided was pipeline visibility. Deal registration became, and still is, a critical metric in predicting future revenue.
What started out as a simple concept, registering deals, has now become its own ecosystem; a necessary part of any technology vendor’s channel operating system. Included in this ecosystem are deal registration, sales training, MDF, spiff programs, portals, and more. New companies are creating solutions and vying for valuable dollars that tech vendors spend aimed at improving, empowering and optimizing their partner channel. Often times, however, these investments are a waste. Too often, vendors focus on the latest features and functionalities that are possible before they get the necessary foundation in place. Similar to practicing your curveball before you can throw a strike, the mechanics matter. Things like through-partner marketing, and reward/spiff programs are incredibly powerful in today’s world, however, they should be viewed as enhancements to an already streamlined channel partner program. You wouldn’t bring your company into social channels without a solid social media strategy and framework, the same concept applies when looking at your company’s partner program.
This is not to say that these offerings aren’t valuable, but rather that if your internal and external partner strategy isn’t precise from both a process and tools perspective, these investments will not deliver the value that they claim to. The themes below can serve as a foundation for proper mechanics in rolling out and enhancing channel partner programs.
1. Establish and maintain a process that can scale with your partner program.
Above all else, your partners want to know where they stand with you. Too often we see vendors who have not solved the communication process for their partners when it comes to training, enablement, registration, registration status and approvals, etc. The tech industry is too competitive to solve the bigger channel process challenges once they arise. By thinking through how partners will register deals, receive updates on their approval statuses and understand who and how to follow up on these items is critical. As the number of partners in the ecosystem grows, communication with partners becomes a hefty load that someone has to do. By establishing a communication framework early and sticking to it as the partner ecosystem grows, partners are able to scale and grow with you.
2. Define and obsess over the funnel.
There are specific conversion rates that create a predictable, scalable line of sight into future revenue. Registrations per Partner and per Partner Sales Rep, Submitted Registration: Registration Approval, Approval: Opportunity, Opportunity: Closed/Won are all critical driving forces in predicting partner revenue. The first step is to know the metrics inside and out. Get the data and then get a plan in place to review it monthly. These metrics are the DNA to your entire partner ecosystem, read: Not Optional. Once there is a clear understanding of your company’s specific metrics, and a process to review them on a continuous basis (a meeting should be scheduled to review with key stakeholders), then it’s time to find the weakest link. What is your poorest conversion point? This is where you should start your program improvements.
3. Automate where you can, plan where you can’t.
Unfortunately, tools will not be able to solve all problems. Tools like Vartopia’s single instance, multi-vendor deal registration solution increase the likelihood that your partners will adopt and adhere to your registration program, but they won’t guarantee it. Your goal should be to make the partner program as easy and intuitive as possible. VARs want to do business with companies that make it easy to do business with them. Make it easy. There will always be anomalies and it’s how your organization handles these anomalies that builds a lasting partnership. Trust is built through overcoming challenges. Make sure you have a role and process to manage your partners’ unique inquiries and circumstances. Find tools that give your VARs as much “self-service” as possible when it comes to knowing where they stand. For what’s left, create an SLA (Service Level Agreement) internally for response time. Assign tasks to appropriate roles. This SLA should be reviewed monthly, ideally at the same time that the funnel outlined above is addressed. Assuming you’ve got it normalized, publish your SLA so your partners know exactly what to expect.
4. Reward good behavior.
A core tenet in any behavior-change model is rewarding desired behavior. Put a process in place to reward your VARs for registering deals, for completing sales training, for adopting through-partner marketing tools, etc. This does come with one caveat, that the reward must be associated with the desired behavior. Too often, we see spiff programs that deliver the spiff upwards of 6 months after the registration. VAR sales representatives must first follow up to find out if their registration was approved, then they need to print out a form, fill it out by hand, and then email/fax it in. Hardly a motivating incentive…
According to Harvard University Research conducted in 2011, “Consumers who buy a product intending to use an accompanying mail-in rebate often do not redeem the rebate”…”consumers anchor on scenarios of successful redemption and adjust insufficiently for things that could go wrong in the redemption process.”
Applied to spiffs, sales reps rationalize that the redemption process will likely go wrong, and therefore traditional spiff process and payment fails to create the desired behavior. The barrier to entry is too steep. Improving this process can dramatically affect how early and often VAR reps register deals. Making the reward as seamless and timely as possible increases the likelihood of success.
The partner channel is clearly established as a critical function of vendor growth and success. Partner programs exist to optimize indirect revenue for technology vendors. These programs should have a stable and consistent foundation with enhancements and features that reflect strategic and data-based goals. Hopefully the above helps to stabilize this foundation for your company’s future growth.
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