Channel partners desire simple partner programs
Thursday, November 22 2018
Classic partner programs must evolve as new technologies emerge and partner types blur. As market competition intensifies and business becomes more about new customer acquisition and engagement, the exponential pace of change has created anxiety across the IT industry. Nonetheless, training in new business models requires time and experience, thus resulting in challenges towards demand creation and customer adoption for partners. Besides organizational changes, partner programs also need modernization across partner agreements, processes (for example quotation, deal registration, MDF, incentive visibility), technical training and support, marketing and sales alignment, and others. The risk is these all increase the complexity within partner programs, when partners are collectively seeking greater simplicity in their working partnerships with vendors.
Simplicity is challenging yet crucial
Numerous challenges have surfaced when shifting partner programs towards software, subscriptions and services. But among them, one of the most challenging is having the right requirements and benefits matrix that incentivizes partners. This is also while making sure the program is still compelling to hardware and volume resellers (such as direct market resellers, large account resellers, corporate resellers). The changes vendors seek in partner programs ought to be realistic, scalable, and ensure a system infrastructure is in place to incentivize partners wherever they operate globally.
So far, vendors have evolved partner programs and compensation incentives through various strategies. Nutanix has opted to completely revamp its channel program with a new Velocity program (mid-market-focused) and launched its Power to Partner program channel charter shortly after, with an emphasis on enabling partners’ sales and marketing, but with no revenue requirements for partners. Dell EMC, on the other hand, has made services revenue compulsory for partner program membership. Juniper Networks, Oracle, and Red Hat (being acquired by IBM) have built new specializations and programs aimed specifically at growing partner cloud business practices, while Cisco is embarking on a multi-year journey to shift all its partner programs and incentives towards subscription and lifecycle services. Cisco also recently updated partner logos, allowing up to three credentials (eg, Gold, Master Specialized in Networking, Lifecycle advisor) in one logo to let partners tailor identities towards specific target audiences or campaigns. VMware is leveraging its partnership with AWS to recruit experienced cloud and software partners. To streamline partner processes, HPE Pointnext reorganized its 14 services rebate categories into four.
Riverbed, meanwhile, has centered its partner program around a digital point-based platform, to let partners grow flexibly with Riverbed whether they are selling hardware or software/services. Sales are translated into a common points system, which measures partner performances (new customers, XaaS, renewals, refresh, trade-up) and their benefits usage (see Canalys report published 29 March 2018, Riverbed launches new Riverbed Rise partner program). Cloud service provider vendors AWS, Google and Alibaba Cloud are ramping up investments in partner enablement, investing in partner training and growing their portfolio of vertical, solution, and workload partner competencies for example.
As partners increasingly develop hybrid business models shifting towards software, subscription and services, incremental benefits can center around partner activities related to customer adoption and post-sales services. To effectively scale a partner program, recognizing regional differences and similarities is also crucial. Customer experience is becoming an important metric.
Partner experience and success are ultimate goals
Based on Canalys research, partners’ common pain points include lengthy approval times in quotations, administration complexity in claiming marketing funds, navigating volumes of information on poorly designed partner portals, inexperienced partner managers and competing with vendors’ direct sales. Partner program design leaders must bear in mind that if implemented badly, digital transformation can work against them by creating slower response times or meaningless interactions.
To effectively modernize partner programs, partner program design leaders must:
Have access to information to make the right decisions
Be knowledgeable in new technology
Able to implement an effective digital strategy that aligns their partner businesses with the vendor’s
Partner account managers should demonstrate knowledge on value propositions of software, subscriptions, and services, support multiple sales cycles, improve competitiveness by contributing to partners’ business strategies (for example through analytics), coordinate effectively within and with collaborative organizations, as well as manage channel conflicts professionally for strong ties. Any information system upgrades for improved partner experiences should deliver accurate information, address the right issues, and demonstrate an understanding of partner experiences. Cybersecurity should also underpin these digital system changes. The extent that vendors share customer data they collected from or with partners is also a barometer of partner-vendor trust.
Simplicity is key
Vendors take on significant business risks when moving towards software, subscription, and services. Transformation requires upfront capital and time investments to create seamless collaboration between humans and systems, as well as between networks. Partners working with numerous vendors have little patience for complex changes and may feel forced when changes happen suddenly. Partner program leaders should be compelled to build simplicity into partner programs by design, taking a grounded approach towards change at the same time. Otherwise, they will be forced into changing programs, and risk alienating key partners. Simplicity is challenging but if placed at the core of these partner program transformations, will reap rewards when done well.
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