Channel Champion Blog

by Scott Lincoln

If you ask almost any executive with global channel management responsibilities if their company is partner-centric, they will say ‘yes.’ In fact, they will often say it is their number one responsibility to make their channel programs partner centric. The question is what does partner-centric mean to them?

business man targetHere at CCI, we believe creating partner-centric channel programs begins with an understanding of how your partners’ customer buys, and then creating programs to support that sale. And, that it ends with the way you reimburse your partner for their participation in your programs. For this blog posting, I am focusing on that last bit – how you reimburse your partners, and what we believe it means to be partner-centric versus program-centric.

Currently, there are over 180 currencies in the world. The value of those currencies in relationship to each other changes every day. For example, today one US dollar is equal to 1.03 Canadian dollars. During the past year that same US dollar has been equal to as little as 0.96 and as much as 1.07 Canadian dollars. What about that same Canadian dollar in relationship to a Euro? Over the past year, one Euro has equaled as little as 1.25 and as much as 1.41 Canadian dollars.

The value of any one currency fluctuates based on economic conditions. However, if you are living in Canada do you really notice the change as part of your everyday life? Probably not, unless you are in partnership with a foreign company, and getting reimbursed for participating in their programs. In that case, that fluctuation can make a big difference in how you feel about the program and the partnership. As a partner, you want to get reimbursed dollar for dollar, whatever currency you spent.

When reimbursing partners you have two choices – do you reimburse based on the current value of your native currency or on theirs? In this case, being partner-centric means reimbursing your partner the exact amount they spent in their local currency. If they spent $1,000 Canadian dollars, reimburse them $1,000 Canadian dollars.

Partner-centric means that the company chooses to absorb any difference in financial value that fluctuating exchange rates generate. A partner-centric model maintains the partner’s local currency as a constant throughout the process while the over-arching base currency will fluctuate with the market—this allows the partner’s currency to remain constant.

Program-centric means that the company chooses to have the program operate under one currency that they define, and all reimbursements are done in the one currency selected. The partner absorbs any fluctuation, which can be positive or negative depending on the economic conditions.

From a best practice point of view, we always recommend that a partner-centric program be implemented for all global programs if possible. Partners will have a more positive experience during the use of the program when they can count on being reimbursed exactly what they spent to participate. Over the years, we’ve seen that this approach pays back far more than the additional cost because it increases partners’ loyalty and participation. This is especially important as companies are becoming ever more dependent on their global sales channel for growth.