Most people plan and build their channel programs for success — but the really successful managers also plan for failure.
Why? Because no matter how good your program, you must imagine the worst case example of what could go wrong and build in safeguards against that. Frankly, you have to factor in the knuckleheads.
Design your program to take into account expecting “A” but incenting for “B” The truth is, very few things go according to plan. Seasoned solution provider partners know too well that salespeople at large vendors do whatever it takes to get the deal done, and that includes flipping from one partner to another. The partner that lost out might have been counting on that $100,000 or $200,000 of gross margin, which pays the costs of their businesses.
That’s the partner who has just been the victim of a vendor “knucklehead.” That the partner lost the ability to pay staff, rent or other bills does not factor into the sales professional’s thinking because he or she is operating based on their goals and incentives. The vendor wants cooperation between its sales force and the channel but has set up a goals and incentive scheme with sales that expects A (cooperation) but incents for B (get the deal done). The integrity of a channel program is everything. So, no matter how well a program may be crafted, safeguards must be built in to protect the partner.
Plan for failure – and then plan for success. Channel managers must find ways in which it can synchronize the goals and incentives between its sales force and channel. Once that’s done, every salesperson should be acting with the channel. Encourage in-person relationships with partners, and provide incentives and SPIFs (sales performance incentive funds). Also, outline the type of cooperative behavior you expect, and be specific: Relationships first, sales second.
With the partners as well, acknowledge and reward correct behaviors. If you say there are 10 things to do to be a successful partner, reward the steps that are achieved on the way to the sale. Provide incentives at each activity level, and finally, reward on how much revenue you bring in.
Build your sales plan with the channel’s needs in mind. It’s much easier to create a direct sales plan. Too often, vendors do that first, so the channel portion feels bolted on and unnatural. By baking the channel plan in from the start, it’s natural to offer rebates, incentives, MDF and training. They aren’t tacked on as afterthoughts, but rather, built in as features.
Sometimes, vendors are faced with successful salespeople who just don’t understand the importance of the channel. Let’s call them “hardcore.” Maybe they’ve always done their jobs one way, but now they need to apply their appreciable skills toward working with the channel. If that’s the case, and you need to change someone’s behavior and make them more channel-centric, find a way to put them in the channel for a time. Something like, “A day in the channel,” for example. It’s a fast reality check.
One of the benefits of using a tool such as Q2E is that it provides non-financial metrics that paint a picture of the channel’s value. It defends the importance of the channel to vendors and manufacturers. Further, it explains why a channel manager must provide MDF, rebates, training, incentives, etc. Providing that kind of information lets the channel manager empower partners to be more successful.
Naturally, the channel manager’s job isn’t always going to run smoothly. Humans are unpredictable, and things can go sideways. By planning for those rare yet inevitable circumstances, you’ll wind up with a channel program that profits everyone.