June 2011 Feature

The Art of Reducing Channel Complexity

by Anna Johnson

If you’re not getting the partner mindshare you want, ask yourself, “How easy is it to do business with me?” When answering this, consider how many steps it takes for a partner to access a whitepaper or new product information. How slow is it for your VARs to get an approval on a pricing and quoting assessment? Do you believe your partners are able to clearly articulate an escalation path for sales support issues? If you are unable to answer these questions and others around the topic of complexity, consider complexity as the key saboteur of driving your partners away. If that’s the case, the key to improving partner engagement may be simplicity itself.
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Whatever complexity you shower your partners with, multiply by 20, because that’s how many vendors they are dealing with on a daily basis. And if you can’t simplify your programs and processes so that you can be the easiest vendor to do business with, you will find yourself in last place when vying for your partners’ attention. More rebates and sales bonuses won’t cure your complexity disease. Minimizing complexity is a win/win scenario—creating a more satisfying experience for your partners, and reducing the administrative burden for you.

To find out more about the challenges of complexity and what to do about it, Channel Management Insights sat down with Dale Taormino, CCI’s Director of Professional Services to discuss ways of reducing channel complexity and improving the way you do business with partners.

Begin by Listening

Before you start blowing parts of your channel program to pieces, get your finger off the trigger and listen to what partners have to say about the ease of doing business with you. “What programs and processes maybe perceived by you and your company as being complex may be working just fine for your partners,” says Dale. “And what programs and processes that are perceived by your partners as being a big headache may be a surprise to you.”

More often than not, your partners don’t have a dedicated staff person to understand the nuances of your programs and searching for contacts and content they need. Instead, the burden of understanding your program falls on the shoulders of sales reps and business owners. And conducting business with you is just a sliver of their overall responsibilities. Tune in to this perspective when asking the channel what programs are most complex. Rely on qualitative feedback to help prioritize what programs or policies to simplify first. Remember, there is no better source for guidance than your partners.

Design Programs for the Partner Majority

Many times vendors will design channel programs, policies, and processes to target the small percentage of partners that misuse the system. “The downside to this approach is that the program becomes overly complicated and discourages partner adoption,” says Dale. “We advise vendors to design their programs for 70% of their partner base as a rule. That way the focus is on greater partner adoption and usage.”

For example, some vendors design a deal registration program where every deal that is submitted to the company must be qualified and approved by a service representative before being accepted into the system. The hope is to filter out all the unqualified deals from the very beginning. However, for partners that have very qualified deals, this process is too time consuming and requires too much interaction with the vendor when they would rather be spending energy closing business with the customer. “Instead of using your people resources qualifying all partner deals, do random spot checks or look at the lead-to-close ratio and investigate the partners that appear to be abusing the system rather than designing a complex program to ward them off,” recommends Dale. By engineering your programs and policies for the majority instead of the rule breakers, the system becomes inherently simple.

Decisions, Decisions, Decisions—Perhaps One Too Many

Why does it take so long to decide on sales performance rewards, a deal registration process or to answer a MDF question from one of your partners? Is it perhaps the time it takes for your company to make a decision? “Nah, couldn’t be,” she says sarcastically! There are lots of reasons why it takes vendors a long time to make decisions. Some decisions may be too political and others are procedural. If making a procedural decision takes more than two steps, you are impeding the speed and increasing the cost of doing business.

Being able to make timely decisions affects everything from:

  1. Pricing/quoting assessment, management, and approvals
  2. Pre-sales support and assistance
  3. Issue resolution and escalation processes

So if your company has the habit of stalling the decision-making process or worse, is indecisive, there is little you can do to reduce the complexity of your partner program and any effort to streamline or automate will be thwarted until this issue is addressed.

The Argument for Standardization

There are a several benefits to standardizing your programs and processes. Standardization provides:

  1. the foundation for back-end consolidation and integration with front-end systems like your partner portal
  2. predictable procedural behavior from your company and partners
  3. a path to reducing complexity by streamlining and simplifying programs and processes
  4. the ability to scale across all partners regardless of size and location

“Standardization forces you to hone in on the areas of complexity and simplify or at best eliminate nonsensical parts of your program,” says Dale. To begin your standardization project, learn the difference between wants and needs and then architect the system accordingly. Dale continues, “Deciding on what’s required versus what is wanted is an excellent skill to cultivate and master. Once mastered, your standardization project will be much easier to begin and implement.”

Some would argue that standardization kills the ability to be flexible. However, if you have a mature or maturing partner program, chances are you have a good idea of what programs and incentives work to make a good case for standardization and automation.

Conclusion

Here are some key tips you can use today to reduce complexity:

  • Change your perspective. Understand that:
    • You are one of many vendors interacting with your partners
    • Doing business with you is just a sliver of the overall responsibilities your partner has on their plate
  • Use qualitative feedback from partners to determine the areas you need to simplify first
  • Approvals for programs like deal registration and MDF requests and reimbursements should take no more than two steps
  • Simple and straightforward program guidelines that are designed for the majority rather than the rule breakers

Reducing the complexity of your channel program is more than just streamlining. It is about becoming a preferred vendor because it’s easy to do business with you. This is when your channel program becomes a true competitive advantage for you. Use feedback from your partners as a guide to determine the areas that need simplifying, designing programs for the majority, and learning to distinguish between needs versus wants. Once these skills are practiced and mastered, consider standardization and automation as the path to simplifying programs and processes. With luck, this process will result in programs that are easier for you to manage as well.