The state of partner programs 26 June, 2007 By Vanessa Ho

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The survey interviewed vice-presidents of partner programs from 55 U.S.-based technology companies. The report noted that IT vendor companies were continuing the execution of their programs with what they have already laid as a foundation without considerable change. But Amazon Consulting said they do have some enhancements around creating the right tools to support program elements, feedback and rewards.

One finding of the report noted that almost all of the respondents, except for two, had a partner portal. The report questioned if these portals were effective at engaging, empowering and managing partners.

"The hard part about partner portals is that every vendor has one. If you are a solutions provider selling several vendor products, you have to go to every vendor portal to get information, register leads and apply for marketing development funds (MDFs)," said Diane Krakora, president and CEO of Amazon Consulting.

"With partner portals, [vendors have] put the work back on the partners. If you want to learn more about us, then you go find stuff. The question is are these truly the tools that help partners collaborate together and help them be effective at selling and positioning their services to end customers or is it the newest version of a channel account manager except that it is reactive than proactive," she added.

There has been talk of a vendor bridge that combines multiple vendors into one portal or using dashboards that links data from partner systems together. But Krakora thinks that a common multi partner portal won't happen because of the competitive nature of vendors.

"They want to capture the partner and keep them on their portal instead of linking them off elsewhere," she said,

The report also noted that while 75 per cent of respondents had partner conferences, only 68 per cent had a partner feedback system. Krakora was puzzled as to why partners didn't have one.

"It's detrimental not to have that input. Most organizations say they are channel-focused but most don't have this constant feedback on what is working well or not in the sales and services of their product," she said.

"Vendors are engaged in one way [communication]. They care about their sales and growing their sales [and providing] data and information to partners. But it's surprising they only had a mouth and no ears," added Krakora.

She suggested vendors implement a feedback forum on its partner portal or a feedback system from a regular survey or Total Partner Experience (TPE) metric that tracks the relationships with many partners throughout the year, rather than relying on just a handful of top partners or assumptions to help set priorities and needs.

In addition, 65 per cent of the respondents noted having sales incentive programs in place, but only 60 per cent have a partner locator or directory solution for customers to find possible partners. It highlighted a disparity between program goals and the tools necessary to ensure the success of the partners.

More companies had lead distribution rather than deal registration programs and very few, less than a third, have peer-to-peer programs.

Krakora believed the lack of peer-to-peer programs was because a lot of these vendors were leaving it up to partners to find each other in order to collaborate.

She added that vendors should offer more networking opportunities for partners or build more time during partner conferences for them to meet.

As well, according to the survey, 17 per cent of the respondents have "points-based programs." Points-based programs are a relatively new concept in the channel. Krakora explained that a points program is where resellers earn their way to the different levels of a vendor partner program by earning points such as through sales revenue or helping vendor enter new markets. A reason why few vendors have adopted a points program is because it requires a significant focus on defining and tracking key performance metrics plus a heavy investment in infrastructure for successful implementation.

But Krakora said that she is seeing a lot of companies itching to adopt a points program.

"The nirvana of a points-based system is that you are not only earning points through activity but you can spend it based on what is [beneficial] for the organization," she added.

The report also noted that several companies are transitioning away from partner exclusivity. This exclusivity typically defines specific requirements around regional sales rights or the ability to sell certain products.

Krakora said by transitioning away from exclusivity, it allows channel partners to carry other products in order to better meet the needs of their end customers.

"If your eggs are not all in one basket, it becomes a better partner model where they are competitive and have longevity," she added.

As well, the report indicated that very few companies specifically reward on customer satisfaction scores. Krakora said that this is because vendors are more concerned about sales.

"The almighty dollar is the only thing that vendors care about. I personally think this is very short sighted. You can get today's dollar but if today's customers aren't satisfied, are you going to get tomorrow's dollar?" she asked.

Krakora added that those partners that are actually producing happy customers should be in the higher tiers of a partner program, not those that are just selling a lot.

"Happy customers turn into increased customers that buy more and refer you to friends and are less likely to return products or cancel services," she said.