Interestingly, with incentive programs being all the rage, do you really know what your getting for all that time and money invested in the channel? This question is even more interesting when you bring it down to the individual reseller level-not just on a “macro” level as is most often seen when viewing those expenses as an overall channel budget.
It amazes me how often manufacturers come out with new incentive programs which are only “Stacked” on top of existing programs to provide added discounts to the partner. This might be OK as long as you’re accounting for them and the actual cost of sale is profitable. So, you don’t think this is happening to you? Take this test:
First: Do you offer 2 or more of the following channel programs:
- Performance Rebates (or “stretch goals” as we refer to them)
- Channel SPIFs or other loyalty program to sales reps?
- End user trade-in
- Opportunity management tied to incentives for closed sales
- Champion employee reimbursement programs
- Training and certification
- CAM or SE sales support
If you’re answer is “no”, you’re done with the test (and you’re missing out on some real opportunities-but that’s another entry)
If your answer is “Yes”, then proceed through the following questions:
- Can you isolate the cost of all these programs to individual resellers?
- Are you able to compare those costs with the revenue they generated?
- Do you have an established set of guidelines and best practices for each individual program? If so, are they practiced throughout your channel organization?
- Are you able to evaluate the impact of each program on sales or the reseller’s growth over time? (as measured in isolation, or relative to their “peers”)
- Do you know how your partners perceive the effectiveness of these programs on their business?
If you answered “no” to one or more of the above, you have a real opportunity to improve the efficiency and effectiveness of your channel investment–the technology does exist people. But, don’t worry, you’re not alone. As a result, I’ve heard of many instances where resellers make more money “buying” rather than selling some products by selling it at their “cost” then making up the margin through other incentives. In the meantime your cost of channel sale is so high that you’re forced to lay-off staff in this economy. Is that really a win/win scenario? I enjoy “stiring the pot” with these blog entries, so whether you agree or not, I’d love to hear from you either way.