Vendor-based incentives have long been an integral part of the channel business model. The recession, however, has caused many vendors to rethink how they reward and incent partners, resulting in reductions in front-end discounts and rebates to more stringent requirements for the use of such resources as marketing development funds. These actions are a cost-cutting measure for most of the larger vendors, and while typically described as temporary actions, in reality they often become a permanent way of doing business.
Not every vendor cut back on incentives. Some got more aggressive in what they offer as a way to sway loyalty and lure new partners during a tough economy, but those factions were rare among the largest players in the market.
A rollback in incentives clearly is not good news for most solution providers, but it does open up a golden opportunity to assess your company’s reliance on incentives as a source of revenue and soberly critique which incentives are truly valuable – and which are not. The fact is, depending too heavily on incentives without focusing on the value-add you bring isn’t good business for the long haul.
When it comes to marketing, for example, the tougher requirements to receive MDF dollars might not be such a bad thing. In writing proposals for funding, solution providers are forced to be creative and detailed in what they are trying to accomplish. It’s like grant-writing and while tedious, is a great way to figure out if that idea you had for this demand gen activity or that demand gen activity holds any real water.
My question are multiple:
— As the economy slowly improves, what vendor incentives do you most hope return to former levels? — Are there incentives that you found easy to live without and others that really hurt to lose?
— Which alternative vendors that went in the other direction and sweetened the incentive pot had the most impact?