Rewarding the Channel's Influence

By Pedro Pereira  |  Posted 2007-03-14 Email Print this article Print
 
 
 
 
 
 
 

Opinion: Other vendors should follow IBM and Microsoft in taking steps to reward partners for influencing sales.

As VARs, integrators and IT service providers move into the role of trusted adviser, it makes sense for vendors to recognize channel partners for more than product fulfillment.

Often a channel partner plays a role in the sale but doesn't actually make the sale. In these cases, the partner fulfills the role of "influencer" by steering the customer in the direction of a certain product or solution.

The role of influencer is vital to a vendor's strategy to gain market share, and that is something that IBM Corp. recognized a year ago by launching a program to reward those partners that influence but do not close sales.

IBM found that software developers and integrators who build applications on the vendor's platforms influence customer decisions to buy IBM-branded product at least 40 percent of the time.

To reward the swaying power of those partners, IBM put in place a system by which influencers receive a commission on the sale. The percentage of the commission increases based on factors such as whether the partner plays a role in fulfilling the order and whether the sale is to a SMB customer.

This kind of partner compensation makes so much sense that you have to wonder why other vendors haven't rushed to follow in IBM's footsteps.

A major obstacle, of course, is figuring out when a partner influences a sale. It gets particularly hairy in situations involving very small partners who might not even be authorized to carry the product involved in the sale.

Such is the case with Microsoft Corp. SMB partners who play a role in steering customers to licensing agreements that require doing business with a so-called large-account reseller. Microsoft has partnerships with 18 of these large-account resellers, who are authorized to sell Enterprise and Select licenses for IT shops of 250 seats or more.

Microsoft recognizes that it cannot track the involvement of small VARs in steering customers toward these types of agreements, so the vendor is calling on the large-account resellers for help. So far, 14 of the vendor's large partners have agreed to participate in a program through which they will share with Microsoft information about the involvement of smaller VARs in influencing sales.

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With that data in hand, Microsoft plans to put a system in place by which the large partners compensate the influencers. The vendor is still working out the details of how the compensation will work and when it is appropriate.

Once the plan is in place, assuming all parties involved do what they are supposed to, Microsoft will have taken a meaningful step toward strengthening partner loyalty.

Of course, striving for partner loyalty may even strike some as unnecessary considering Microsoft's ubiquity. But choices do exist and, besides, a major reason Microsoft has become so prevalent is because the vendor has always understood how to work with the channel.

And that understanding today has to take into account the constantly evolving channel. The evolution has sent channel companies down myriad paths, some of which have little to do with moving product or physically handling software licenses.

The sooner other vendors understand what Microsoft and IBM already do, and act on it, the more successful they will be in winning partner loyalty and grabbing market share.

Pedro Pereira is editor of eWEEK Strategic Partner. He can be reached at ppereira@ziffdavis.com.

 
 
 
 
 
 
 
 
 
 

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