The Proven Formula for Vendor and Partner Success
Another example of this disincentive for partners to behave predictably is in deal registration. The concept behind deal registration is that reselling partners graciously surface their opportunities to the vendor and in return, the vendor will offer the partner compensation and protection on the account. The result is reduced channel conflict, improved pipeline visibility and accuracy, accelerated sales cycles, increased close rates and improved closing margin.
In theory, this is all well and good, but when a partner alerts the vendor of an opportunity, it usually ends up looking more like this: The partner sends the opportunity information to the vendor. It is routed to the direct sales team for review and approval which, again, makes rational sense so that a large named account does not have multiple representatives from the same vendor wandering around interacting in an uncoordinated way.
The issue arises when the opportunity sent for approval is not on the named account list, and the VP of Sales, feeling a huge amount of pressure due to a rough quarter, offers the excuse that he or she deserves this deal because the channel partner wont be able to close it anyway, etc. You get the picture. Resellers immediately stop surfacing deals, conflicts erupt, street price goes through the floor and the channel forecast has no validity. Again, the Channel Performance Outlook report shows that conflict and deal registration are indeed issues. Forty percent of channel partners say they experience vendor conflict, and 54 percent said vendors dont provide a means to register an opportunity and secure exclusivity.
The fix here is operationally easy, but requires some executive alignment at the vendor level and commitment by the partner. First, the channel chief needs to have a discussion with the VP of Sales regarding the purpose of the channel for the company and then create the rules of engagement where there is bi-directional value and accountability for both the vendor and partner. If a partner organization exists to drive revenue in small and mid-sized businesses (SMB), for example, then the vendor should agree to send all qualified SMB leads to partners. Equally, any deal registered for an SMB, if it meets the program criteria, should be approved. On the other side of the equation, if the vendor makes this commitment, then the partners also need to agree to certain conditions such as contacting a target number of qualified leads within 24 hours or converting a set percentage to opportunities and revenue. Under these provisions, a vendor may choose to cut off the qualified lead pipeline for 90 days if a partner falls off their commitment.
The key here is building business alignment around the channel and having each party commit, setting up rules of engagement and enforcing the rules with rewards and consequences. This is only one small step in helping vendors and their partners drive revenue more effectively together, but it will certainly reduce the connection anxiety these two groups encounter when working in tandem.
Charles Watson is senior vice president of marketing and sales of Blueroads
Channel Insight Solutions