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
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!
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.
Keith Lubner is managing partner of Channel Consulting Corp., a N.J.-based global consulting organization focused on channel strategy, design, enablement, outsourcing and training for growing companies.