“For example, if the deal was closed in April, the vendor would recognise $45K, but if it was closed in June, then the vendor would only recognise $15K, meaning the rebate could be anywhere from $300 to $900 (still well short of the $6K reward for a perpetual deal).”
This means vendor programs must adapt to the changing nature of revenue accrual in an annuity model.
“One option is to reward partners for as long as the contract is in place, but that means paying small amounts of MDF for the next three years,” he said.
“The alternative is to reward partners up front, but that may mean paying a $6K rebate on $15K revenue (which on a spreadsheet looks disproportionate).
“Partner programs that today are based solely on revenue achievement will not have the influence they used to in an annuity model.”
In looking ahead, Moses said the successful vendors of the future will have a more sophisticated means for tracking and measuring performance, alongside a “far more complex” channel model to manage, with the successful traits today still relevant.
“They will have a clear understanding of the role of their channel and clear expectations of what their partners need to deliver,” Moses outlined.
Delving deeper, the future vendor will also provide transparency around direct customer dealings, underpinned by clear rules of engagement and consequences for breaching such rules.
“They will also understand that if they are going to use a channel (which not every vendor may) that the channel is not ‘a thing that the channel team looks after’ but that it is a go-to-market strategy that affects everyone in the company from the CEO down,” Moses added.
“Vendors don’t necessarily have to have the best program or the best product to be successful — consistency is more important.
“If partners know how a vendor will behave, they can build a business around that. Whereas if a vendor is inconsistent, it’s hard to trust them.”
Top 10 ways vendors can influence partners
There are hundreds of sources of influence in the channel and they tend to have a very loyal and engaged subset of followers - Forrester principal analyst of global channel Jay McBain unveiled the hot spots at EDGE 2017.
1 - Industry media
In the technology and telecom space, there are 16 sizeable media companies around the world who have been quick to recognise the communities trend, and have formed powerful offerings under their trusted brands.
Looking at their advertising guides, you will quickly notice that unique readers are high among all of them.
Simply put, partners don't have the time to read a stack of magazines or a bunch of newsletters — they tend to choose only one brand to follow. How does this align with your media strategy?
2 - Associations
There are numerous associations, both generic as well as hyper-focused. Surprisingly, the largest association in the world (by far) doesn't even reach five per cent of the intended audience. Looking at your product portfolio, are you aligned with the macro and micro based communities where your partners are engaging?
3 - Analysts
Depending on the size and maturity of partner channel you are recruiting, analyst firms can have a major impact on whether you are considered for your product category. Research by firms such as Forrester, Gartner and IDC tend to carry a lot of weight as the size of partner grows.
Also, there are hundreds of mid and smaller sized analysts that carry weight as channel consultants that also have power in making vendor decisions. Are you spending enough time building those relationships?
4 - Distributors
Depending on your product category, making the commitment to broad-line or niche distribution will be important. From an influence perspective, distributors have out- sized reach and marketing budgets to drive partner influence.
Many small and mid-sized partners use distribution almost exclusively for learning and community.
5 - Vendor communities
Several companies have built impressive communities that serve their ecosystem. For example, in the managed services world, companies such as ConnectWise and Autotask have built large and loyal followings of partners that they offer other opportunities to market through.
There are many more examples ranging from SaaS ecosystems such as Salesforce Dreamforce to traditional vendors such as HP, Dell, Cisco and Lenovo.
6 - Peer groups
Many partners that I have worked with swear by peer groups. The ability to engage with like-minded folks and solve problems in a very human- centric way is a huge benefit for them. In most cases, these peer groups try to avoid outside influence but do have sponsorships for events available. In some cases, vendors can participate.
7 - Thought-leaders and bloggers
This is a broad group, but by engaging through thought leadership, blogging and consultancy, they become the most visible people in the channel. They are very visible and they have influence on many partners.
8 - Trade-shows
Most channel professionals will only attend one or two events per year but understanding your target partner and having a healthy trade-show calendar is a must.
9 - Social
Being on social means more than having company Facebook, LinkedIn or Twitter accounts. There are some vendors currently winning this medium, with very socially-minded channel managers engaging at a personal level on these platforms. There are thousands of partners engaged, with real business being conducted by ‘people they like’.
10 - Shadow channels
Partners such as consultants, integrators, ISVs, professional services firms, born-in-the-cloud and start-ups are all disrupting what traditional channels look like. The shadow channel is currently the wild- west but they need to connect, learn, and engage like everyone else.
Tech Research Asia, in conjunction with ARN and Reseller News, created three unique and correlated surveys to analyse trends and alignment between customers, partners and vendors in Australia and New Zealand. Over 240 respondents including IT decision makers from a broad range of industries and business sizes, traditional and ‘new’ partners and a broad mix of vendors took part in the online survey conducted from June through July 2017.