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Provide incentives across the partner life-cycle and throughout the sales cycle. ............................ 3
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Reward your partners based on Life Time Value (LTV) of the deal. .................................................. 4
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High levels of segmentation and personalization to each partner group and partner tier
Clear rule structures built around two or three behaviors that consistently produce one specific
performance improvement result
Alignment to the partner group business model
Mutual benefit for the vendor and the partner
Successful vendors realize the need for an integrated approach to engagement, education,
measurement and rewards. These vendors balance short-term benefits with long-term structural
changes in partner behavior and attitudes.
Now lets jump into the loyalty & rewards best practices for 2013 and beyond!
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1.
Marketing and lead generation activities are more important than ever before. It seems
every vendor has a Marketing Automation tool designed for vendor-led and/or partnerled marketing yet partners use them sporadically. If you reward marketing associates
at the partner level for using your automation tool, as well as for the leads generated by
the campaign, youll increase utilization and accelerate results.
Vendors are also providing catalogs of pre-packaged, integrated marketing plays. These
plays are more than Marketing Automation they integrate a number of elements into
a cohesive campaign instead of a single DM piece or EM piece, and they include social
media and SEO optimization. Vendors should incent individual channel marketers at the
partner level for executing campaigns and providing proof of performance data.
Provide incentives for sales training and accreditation. Partners are able to more easily
sell products and services when theyre knowledgeable, demonstrate expertise and
provide exemplary customer service, so these behaviors must be encouraged through
incentives. Results should be measured against pre-determined customer satisfaction
scores, using mystery shoppers or other KPIs.
Incent technical training and certification of your cloud solutions. Keep it simple. Make
sure theres something in it for them and you will help accelerate business process
transformation at the partner level.
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Discussions with Forrester have revealed two leading trends in deal registration
extending your program from deal registration to opportunity registration and
rewarding partners sales teams earlier in the sales cycle.
Connect your deal/opportunity registration program with your lead and sales funnels to
track your sales pipeline effectively. This will help you reward partners for more than
closing deals. Instead, require partners to generate a specific number of qualified leads
to maintain top tier status.
During the transition period from licensing to cloud, vendors need to reward their
partners sales teams on the total LTV of the contract (or at least for the first years
value). Once vendors transition to a recurring revenue model, they will be able to use
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Forrester reports that today 45% of employees feel their personal computing devices
and applications are better than what their IT departments provide.
Contrast that with the much smaller 27% of executives who have a clear strategic vision
for employee adoption of consumer technologies (Accenture).
This is an industry-wide trend that sets the landscape for the future of the channel.
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In the New Channel your successful partners of the future may not be sitting in your top
tier today. This means you must focus on more than just your Tier 1 partners. You
should pay attention to your Tier 2 and 3 these are the partners that may be most
agile in adapting to business transformation.
Rewards are typically skewed toward Tier 1 partners, but they are often already at
business capacity, while Tier 2 and 3 partners are more apt to be cloud focused and
centered on SMB business.
In order to maintain current revenue opportunities, while positioning your business for
opportunities in the New Channel world, you must focus your rewards on partners
across tiers.
The time is now to refocus your thinking about partner tiering and incentives
consolidate existing partner rebate programs with individual rewards built around
solution selling. This practice builds deeper relationships with target partners, improving
the effectiveness of complex solution selling.
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measurements, instead of how well they support the real goal of increasing partner
performance.
Start by Identifying best practices from within your New Channel organization, and
define two or three behaviors that consistently provide one specific result
(improvement).
Decide on the length of your program cycles by determining the frequency of that
behavior.
Track both behaviors and results so you can provide feedback to your partners sales
representatives. Measuring the results and providing a response (individual and team
performance metrics) will encourage the desired behavior and improve performance.
Once partners understand which behaviors will make them successful, its time to
introduce them to your program currency. This should motivate their salespeople and
management, compelling action throughout your programs lifecycle.
A business owner is motivated by financial incentives directly impacting the bottom line
but this isnt true for a partners sales teams. They are motivated by an award selection
of name brands, experiences and Lifestyle Reward options.
Trophy value rewards, as opposed to cash awards, offer a lasting impact and produce
fantastic results. Participants are already receiving cash as a reward in the form of
commissions. Besides, you want to stay away from rewards that may later be
considered an entitlement.
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Balancing means shifting your incentives focus from volume partners to value
partners to maximize your channel investment. Essentially, you will increase value
partner rewards and decrease rewards for volume partners who simply take orders.
Start by assigning rewarded activities (or desired behaviors) to the individual sales
representatives and sales engineers dedicate 55% of your overall budget to this.
Dedicate 25% of your budget to team incentives (ex: sales, marketing, services) for lead
generation, lead management and opportunity registration.
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Direct the last 20% of your budget back to the partner based on the performance of
their sales team. Reward for new and target accounts, as well as focused products.
Stack incentives with your alliance vendor partners to be successful in the solutionbased New Channel model. Stack incentives by adding funding from other vendor
alliances when solution selling.
Dont structure your incentive programs to reward existing and recurring business at the
individual level ensure your rewards encourage behavior that grows new business.
Rethink rebates.
Combine company-level (rebates) and individual/team level (rewards) into a single incentives
program built around solution selling to reduce operational costs and improves overall program
effectiveness. A unified approach to incentives builds deeper relationships with target partners,
improving the effectiveness of complex solution selling.
Create quotas around revenue growth, not attainment. You must position your
company-level rebates to drive new business, not existing or recurring business.
Consolidate rebate and rewards programs to ensure all stakeholders are aligned and on
the same page.
Simplify the registration/activation process. Make accessing and signing up for rewards
programs as easy as logging into the partner portal and clicking once (no separate signon!).
Ensure your terms and conditions are clear and meet all local, legal, and tax
requirements.
Design a user friendly claims process with fast, data-driven validation. Swift validation
requires consolidated, cleansed and staged POS data.
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where they stand, and all the rewards for which theyre eligible, will motivate them to hit their
goals.
Provide graphical representations of progress to the partner and sales teams via
performance dashboards.
Performance measurement should take into account not only product transaction
revenue, but also deals that are focused on solutions or services, and won by partners
where the product portion is transacted elsewhere (i.e. through Distribution, DMRs).
Make sure that at a minimum your rewards technology can provide reports with the
following metrics to drive key performance indicators (KPIs):
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The individual driving your incentive strategy must be invested in its performance and
accountable for successes or failures.
This individual is typically an articulate change agent, who takes risks and has the
authority to make changes. He/she has access to the executive team, understands how
to drive buy-in and speaks the language.
This champion will lead research to identify the partner groups that will ultimately drive
the desired outcomes. They will also pinpoint the desired behaviors by reviewing the
metrics and interviewing the top performing partners.
He/she will also work closely with the chosen agency to support your incentive program
as the driver behind the advertising of internal successes such as market-share gains,
increases in sales of specific products or services, testimonials and more.
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Video messages when aligned to a lifecycle, these messages will be far more
motivating and thereby more likely to compel action.
Webcasts can be used to provide executive reports that highlight best practices and
showcase early indicators of success.
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Make it fun and lively! keeping your messages fresh and engaging will ensure your
program remains top-of-mind for participants.
Start at the top when a CEOs confidence in a loyalty strategy is outwardly apparent,
partners will be more likely to buy-in.
Approach applicable departments it is essential to align sales and marketing and win
the hearts of internal operations, finance and IT. Getting these teams on board can
make your program a core component of your companys winning strategy for the
future.
Recent economic challenges make it necessary to run programs as lean and mean as
possible. Aside from increasing operational efficiency, this will also make it easier to run
your program globally. Employing a global approach is easier said than done, as local
channel managers will almost certainly experience the not-invented-here syndrome.
Avoid this by providing local managers with controls that give them the flexibility to
drive the program in their regions. After all, they are the experts in their regions?
Achieve global and local control with a rewards platform that is 60% managed by your
worldwide organization, and gives 40% local control through different mechanisms and
configurations.
A single platform offers advantages for both vendors and partners because it provides
centralized data and a single source of the truth to understand your programs.
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You will experience reduced administrative burden, reduced head count to run the
program, and centralized program information, providing easy access for headquarters,
regional offices and the field team.
A single platform delivers easy global scaling and offers flexibility to tailor programs to
regional needs.
Centralized reporting gives partners a quick view of all their incentives activities. Seeing
where they stand can help motivate them to reach sales goals.
A single incentives portal integrated with your PRM platform can help you manage the
needs of many different partner types and many different types of programs.
When you combine a data-driven rewards strategy with a sound platform you will be
empowered to Engage Acquire Grow Retain & Foster Loyal Partners.
Budget for platform setup and configuration. The best practice is to allocate up to 25%
of your total budget for services, and invest the balance for rewards the first year.
For the second year and beyond, you should budget at least 5% of your annual spend for
changes, and another 10% for ongoing program management and support.
Most vendors typically allocate between 0.5% and 2.25% of captured revenue to
incentives and from 2% 5% to rebates.
The rule of thumb is to fund your rewards budget on a contra revenue basis, and your
services spend against your marketing opex budget. This is another reason why aligning
sales and marketing is critical.
Vendors should agree on a process when buying goods and services in different
currencies, as exchange rates tend to be more flexible than budgets. Account for
variances in the Value Added Tax (VAT) rates and acknowledge that in some countries it
may be difficult or impossible to reclaim the VAT.
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2 = Meets expectations
3 = Exceeds expectations
The ratings should be examined in aggregate as well as individually, and used to measure and compare
how the program ranks in each area. This will allow you to identify which benchmarks make programs
perform better than others.
Performing a true assessment of your program will provide you with the actionable knowledge you need
to make changes that promote greater program success. With insight into the aspects youre strong in,
and the ones that need additional attention, you will be prepared to steer your program in the right
direction even in this ever-changing channel landscape.
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Some B2B companies have resisted the surge of social media, claiming their target audience doesnt use
it, but we all know that isnt true. 55% of respondents to a recent B2B survey said they search for
information on social media. Who are those people? Theyre your partners! With more than 1.5 billion
total users of the big three social media platforms (Facebook, Twitter and LinkedIn) you can be assured
most of your partners are spending their spare time checking their social media profiles.
How to reach your partners social media.
Partners sales, marketing and services teams are bombarded by dozens if not hundreds of emails daily,
leading them to tune out the messages in their inboxes. Email overload leads to low open rates and
click-through. The preferred method of communication for many B2B and B2C professionals is now
social media.
If your channel partners are already there, shouldnt you be too? Today, you have the opportunity to
engage partners using their preferred mediums, like Twitter, LinkedIn and Facebook and can take
advantage of other great media-sharing tools like YouTube and Instagram.
Dont tell your partners, show them.
Social media messages that arrive in the appropriate context and are aligned to a program lifecycle will
be motivating for partners. Launching an integrated communication strategy around your loyalty
program can encourage greater engagement and promote best behaviors. Instead of sending out an
email with a list of winners, think about recording a video of an awards ceremony and posting it on
YouTube or sharing photos showing top performers (rewards at hand) on Instagram the links can be
tweeted to partners, giving them the option to view the multimedia instantaneously. You should also
highlight specific examples of best practices or behaviors which consistently produce improved
performance (via written, video, photo) and resulted in sales, marketing and services teams earning a
trip to trips or other rewards. Distributing positive examples via social media lets your partner base
digest the information quickly and easily while learning behaviors they can engage in to drive leads and
sales.
Vendors should ensure that launch and ongoing communications initiatives reach the entire participant
base. They should also include frequent online postings of participants performance to encourage
competition and the right attitude! Media-sharing tools are great in this regard because the photos and
videos you upload will stay there until you take them down, thus creating a catalog of positive
reinforcement for partners. By scrolling through pictures and videos, partners will see the most
successful partners and better understand the behaviors that made them successful.
Keep them updated.
Aside from motivating through recognition, social media like Twitter can also be used as a notification
system for program changes or developments. Imagine your partners team waiting for sales claim
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validations to be loaded and converted to points in their accounts. But they arent sure when this will
happen. You can really make a difference by tweeting when this occurs or exactly when they should
expect to receive their points. Its important to keep your partners engaged, and this is definitely a step
in that direction.
In-platform communication.
In addition to the social media communication suggestions above, we submit that including social
communication features within the actual rewards platform is critical today. Providing a system that
fosters social engagement within the partner environment, and widespread messaging within the
rewards technology, will improve engagement and accelerate desired results. In this day and age, ondemand reward technology must include the social media components within the loyalty rewards
program to socially engage participants within their own partner, business group, region or country. Do
not accept anything less!
Who owns social media initiatives?
As social media matures and channel professionals gain more experience and proficiency with it, we are
seeing a shift in who owns and contributes to social media efforts. Heres a hint its not just the
responsibility of your marketing team anymore. Here are a few tips to help you get the most out of your
social media initiatives.
Make sure you have enough resources to participate in real-time/near time conversations. As
social media becomes a part of everyones daily life, users are now more demanding and critical
than they were even 12 months ago. Ignoring time-critical discussions can create more damage
to your brand than you might imagine. Good news though, its no longer the sole responsibility
of marketing to participate.
Ownership of social media is becoming decentralized, with more people from other
departments and from outside of channel being involved in discussions and posting content.
This may fill some with trepidation but the demands of social media require an enthusiastic
group of professionals with specific expertise (and dont forget personality). Its important that
whoever is communicating to your partners does so in a professional but personal tone that
doesnt feel like its been written by Corporate Communications!
Think of creative ways to integrate the content and tools you have at your disposal into all of the
platforms youre already participating in. This will make you an invaluable contributor to the
group and raise your companys profile and your profile at the same time.
You will need C-level ownership to evangelize and share your vision, align business units, define
policy and implement processes, provide training and make resource available.
Summary.
The shift to the cloud and a recurring revenue model is driving business transformation in the channel.
Change is inevitable, and as such, we need to adapt how we conduct business. But dont think you have
to abandon your existing rewards infrastructure. Following the best practices in this eBook will allow you
to adjust your existing loyalty & rewards program to fit the demands of the New Channel.
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With the channel changing so rapidly, you probably find yourself wondering how all the new trends will
impact the way your channel programs function. Performance is dependent upon knowing how to adapt
your programs to meet the changes around you, how those changes impact your partner ecosystem and
how to incorporate these changes into your existing programs.
The best practices and strategies shared in this eBook can enable you to adjust your programs in
accordance with the advancement of the channel. If you find you need help with making changes to
your partner program, remember youre not on your own, we can help. Feel free to contact us at any
time for a free consultation or to set up time to review your loyalty or rewards program. Contact us
today at team@hawkeyechannel.com.
Heres to a productive 2013!
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