Driving the Right Kind of Business in the Right Way
In my last blog post (Are Vendors Recognizing the Value of SMB-Sized Partners?), I noted that it wasn’t that long ago when larger vendors began taking notice of the SMB market. It has taken time since then for these vendors to create the infrastructure they would need to be successful in this new market. In this post, I’ll walk through some real-world examples of what vendors have done to achieve success in this market.
Twenty years ago even the largest tech vendors didn’t have deal registration programs. In fact, such programs really only came about in the last 10 or 15 years. By enabling partners to register deals and be rewarded on those deals, vendors can avoid conflict between partners and between direct and indirect sales.
A lot of partners don’t like having to go into a portal to register deals. They just want to sell, make their money, and move on. But this deprives vendors of the data they need to forecast sales. By rewarding the reseller for registering a deal that is going to close in, say, three months, the vendor is better able to predict what their future revenue will be.
Incentives for Certifications & Authorizations
Worldwide, Microsoft has approximately 200,000 resellers. But they are not in touch with about 140,000 of them. They don’t know how knowledgeable the resellers are about Microsoft products or services, so they’ve created certifications and authorizations. And to encourage their resellers to learn about their products and take its certification tests, Microsoft provides incentives and issues rewards.
MDF Dollars for New Markets
The big vendors also reward companies that are strong in a particular vertical. If they want to tackle markets or industries in which they do not have a strong presence or haven’t done significant marketing, they provide incentives to resellers in the form of MDFs and other tools to start to realize the potential of that niche market.
Changing Behaviors for Mutual Benefit
As you can see from the slide, there are countless incentives like these that help vendors’ channel organizations create a disciplined, profitable ecosystem of small resellers ready and willing to go after small-to-medium businesses.
The incentives help the smaller partners, too. After all, these partners want to sell more and grow their businesses. They want to become more profitable. They want access to the type of programs that reward them for learning more about a vendor’s products. The better they are at conducting sales, establishing an effective social media presence, improving customer experience, and learning countless other business techniques, the more successful they can be.
Over time, these incentives create a sort of virtual cycle: The better resellers get at selling the vendor’s products and services, the more incentives become available to them, and the smarter they get about selling even more.
What Has Changed Since This Model Was Created
As I said at the beginning of this post, I created the above graphic about two years ago. What, you might ask, has changed since then? Not much, really. A lot of organizations are starting to go to the cloud. But the same methodology still holds for developing channel programs with or without the cloud. What changes is the content of the vendor education programs, the certifications, the kind of data the vendors often need to incent resellers to capture, often with the aid of TPMAs (through partner marketing agencies).
This is not to say that expanding channel operations to serve the SMB market is easy. Vendors must find ways to assess potentials small resellers. They must connect with best-of-breed TPMAs. And they must understand how these new incentives work and how to implement them. Many of these same vendors are now working with CCI to make this expansion as painless and profitable as possible.
A Final Comment
It is an all-too-established convention that marketing and sales rarely communicate or collaborate with each other. This slide, I hope, illustrates how sales and marketing units at best-in-class companies are interacting with each other. Their common goal is to make sure that the value proposition of all their products and services are articulated seamlessly to the customer, prospect, or end user. This is a model other vendors would do well to imitate.
ABOUT THE AUTHOR
John Walker, Business Development, EMEA General Manager at CCI
With 15 years experience in channel program development and support, John Walker manages CCI’s EMEA office and heads up our channel research team. He is regularly engaged to support strategy development and execution for some of CCI’s most high profile clients – EMC, Google, Plantronics, and Hitachi. John also supports CCI’s multi-channel and sales strategies and detailed implementation tactics.