Resellers See Room for Improvement in Vendor Leads & Spiffs
by Steve Murphy
When we put together the Vartopia Reseller Survey, we wanted to know about how resellers viewed vendors’ programmatic efforts to help partners boost revenue growth. In our earlier post, Reseller Survey Reveals Low Satisfaction with Vendor Deal Registration Programs, we reported on reseller perceptions about vendor deal registration. In this post, we will focus on vendors’ push/pull tactics, specifically:
- Push – providing partners with qualified leads from the vendor’s demand generation efforts
- Pull – rewarding partners’ sales reps with incentives for registering deals and closing new business
Since partner revenue growth can be accelerated with tighter integration of both vendor leads and partner generated leads into deal registration and CRM workflows, we wanted to find out if vendor leads were being received and managed effectively from the VAR perspective.
Nearly all respondents acknowledged either occasional or frequent receipt of vendor leads. Some 70% of respondents rated vendor-sourced leads as moderately to extremely important to their sales efforts. However, none reported vendor leads as a primary source for new customers.
Overall, more than half of all responses (56%), were that no leads were provided when thinking about a specific vendor. For those receiving leads, respondents were evenly split between difficult and easy in assessing the process. They were also relatively evenly split in terms of not qualified vs. qualified leads with more than half of those reporting an easy process also finding the leads to be unqualified.
While barely scratching the surface of the wide variances of vendor lead distribution and management tactics, the survey reflects that the industry at large has yet to reach consensus around consistently executed best practices. With the emergence of more robust through-partner marketing automation tools, we expect that gap will close in the near future.
Incentives for partners’ sales teams, on the other hand, have been widely used for many years. The history of spiff rewards has shown that, while they can be very effective, often they are not embraced or even permitted by reseller organizations. Often they are perceived as being poorly aligned with the reseller’s business and, as a result, either they were poorly embraced or not permitted. Meanwhile, we’ve also observed a trend of applying spiffs to more than just closed sales. So we asked how important are vendor spiffs or loyalty rewards for a variety of different activities:
- Closing net new business
- Upon approval of registered deal
- Completing technical and/or sales certification
- Referring new customers
- Setting up demos or pilots
Both closing new business and approved deal registration ranked highest, each with half or more rating it Very Important. Since we knew that there were reseller firms that discouraged spiffs or even restricted them as a matter of policy – we asked them. Less than 7% said they were not permitted as a matter of policy. However, some 35% said they required management to approve the spiff – which seems unsurprising given the concerns noted above.
Since we’ve also been noting a shift from spiffs – traditionally cash-based and often one-offs (e.g. $100 for for a customer sale) – toward ‘loyalty rewards’ which tend to be points based, rewarding reseller employees for a cumulative set of behaviors, we wanted to know if resellers perceived them differently. Sixty percent said they were no different than cash spiffs. Of the remaining, twice as many thought they would be more likely than less likely to meet with management’s approval. In our view, again, this speaks to the alignment concerns particularly those related to one-offs for closed sales.
When asked how they felt personally about spiffs/rewards, three quarters responded positively that either they actively participate or thought they should be encouraged, while the remaining quarter said they were neutral.
We also wanted to probe for any operational issues. Were resellers annoyed because the process for claiming spiffs can be an administrative challenge at best and a distraction to the sales process at worst? So we asked what potential improvements could be made to vendor spiffs to improve their impact. Reducing or eliminating claims forms required ranked as the most important followed closely by aligning spiffs more closely with the reseller firm’s goals.
In summary, we found respondents were more positive about spiffs than we had anticipated while citing room for improvement both with simpler, easier processes and aligning the rewards more closely with the resellers’ objectives.
Let us know if you’ve got any questions or would like to schedule a time to discuss how your programs might be perceived.
For a deeper dive, you can read the full Reseller Survey Summary Results.