The Vendor's Channel Program -- It's All in the Details

The key to determining a program's success is knowing to keep a close eye on the small stuff.

• By Keith Lubner
• March 01, 2007

Finding a vendor to layer on top of your existing Microsoft competencies is not an easy task. Among the many things you need to examine is the vendor's formal channel program. Too often, vendors pretend to slap a program together by placing a "sign up now" button on a Web page. The top-notch vendors of today, however, pay attention to the details of the program and continually examine those details to make sure the program is moving in the right direction for its partners. These are the vendors you want. Let's look at the common details of successful programs.

Levels and Margins
When considering a vendor's channel program, make sure the program has different levels. I recommend three, but depending upon the company and type of product, this could vary. The reason you want different levels is that you want to make sure incentives exist for you to "move up" to obtain greater benefits, including better margins -- which increases your profitability! If everyone is at the same level, it's more difficult to differentiate yourself as well.

Channel Conflict Avoidance
One of the biggest reasons vendor/partner relationships fail is because of channel conflict. A "complete" program will have mechanisms in place so that you're rightfully compensated when the inevitable conflict occurs. Make sure the vendor's salespeople have incentives to work deals with partners. Make sure there exist clear lines of distinction between what the vendor's direct sales force works on and what the channel works on. Without guidelines in place, channel conflict will happen -- causing you much grief in the process.

Training and Enablement Process
I've seen many channel programs come and go over the years. The ones that stick around are the ones that have a well-documented training plan in place for their partners. Make sure the vendor's plan not only covers up-front training but also considers the ongoing training needs of its partners. If you're searching for an additional vendor for your portfolio, many won't have the breadth and depth of Microsoft's training program -- but at least strive for those that come close.

Business Planning
A key component of a strong vendor channel program is the vendor's ability to do business planning with its partners. I'm not only talking about forecast planning as it relates to sales, but full-blown business planning on the scale of offering services to help you build your business. An extremely good program will have a component of this sort of planning available to its partners.

Lead Distribution/Registration Process
Up to this point, you have examined the vendor's technology and have determined that there's probably a fit. You most likely have also examined your internal processes to see what level of demand generation you can take on internally. A good channel program will have a certain amount of lead distribution, with processes and procedures around it, with a varying quantity of leads coming from the vendor. But paramount to a good program is the vendor's opportunity registration process. You want the ability to register an opportunity (different from just a "lead") into the vendor's system, so that you can avoid channel conflict as well as any potential disputes downstream. Make sure the vendor's program contains this component!

Supporting Infrastructure
As a Microsoft partner, you are already accustomed to having personnel in place to support your efforts. Make certain the vendor you're choosing to add to your portfolio has "channel" people in place. If the vendor is trying to turn a direct salesperson into a channel salesperson, watch out. Not a lot of people can make this stretch because the channel dynamic is very different. Examine the personnel that the vendor is assigning to support you. Interview them. These people are going to be responsible for helping you grow your business, therefore you need to place a high level of importance on getting to know them.

Be careful when examining the formal program from the vendor. A program can have too many details and processes to it. You must see "balance" in the vendor's approach: a complete program that doesn't "bog you down" with processes and procedures. Finding the right balance will most certainly allow you to grow your business.