MSPs' New Needs Call for New Incentive Programs

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incentives for MSPs

Old incentive programs can't meet new MSP needs. Vendors need to know how to best engage with, support and provide incentives for MSPs.

Incentives for MSPs

Incentives can be offered in many forms, but manufacturers must first begin by defining who's being targeted within the MSP. With most other partners, it's often the sales rep or company owner who's rewarded with sales performance incentive funds/bonuses, points or merchandise rewards. But with MSPs, the decision-makers are usually the technical account managers and solution engineers. Ask: How do I motivate both the technical staff and the sales people? Are those rewards the same or different?

Customer satisfaction ratings and churn rates will also likely be popular incentive metrics, but the biggest issue will be figuring out which incentive options apply to MSPs. Even many of the top, most innovative cloud companies aren't doing enough to incentivize the partner for the life of the customer relationship; rewards only for first-time revenue are still frighteningly common.

Given the subscription focus of MSPs, manufacturers will need to create incentives that span beyond the first deal close—similar to how channels have been run in more subscription-heavy industries like insurance and telecommunications. Incentives must recur throughout the life of the customer relationship and award MSPs beyond the first year of customer use.

The ball is in the manufacturer's court. The nature of the channel partner has fundamentally changed. IT has changed, too. And everything is more complicated.

But change creates opportunity. MSPs have capitalized on it, and now it's up to manufacturers to determine how they can find stability in subscriptions. Properly incentivizing the MSPs selling your solution is a good place to start.

Christopher Becwar, a veteran channel and software management leader, is currently director of product management of channel solutions for Revitas, which specializes in contract, revenue and compliance management solutions.