Keeping your loyalty rewards program simple by minimizing complexity does wonders for getting partners to use it, and it’s a critical element of partner satisfaction (and thus loyalty). The quickest way to a simple and easy user experience (UX) starts by identifying the right loyalty technology that allows you to thoroughly segment and personalize your program. Once this is accomplished, partners will only be exposed to what is required, making UX easy.

Vendors strive to drive loyalty in a flexible global manner by deploying a core incentive and reporting platform across different territories, regions and/or countries. However, most end up building highly complex and rigid programs that makes it difficult to have worldwide or even regional coverage. To avoid this costly mistake, you need to identify some basic core functionality in your rewards technology that empowers you to thoroughly segment, regionalize and personalize your rewards program on the fly.

The functionality necessary to achieve this level of flexibility is often found on a loyalty cloud that includes a hierarchy editor; where you can recreate your entire partner ecosystem’s hierarchy, assign roles and create groups easily (usually through drag and drop). Once you have created the appropriate hierarchy, you should be able to expose different content to different partner groups and tiers. Moreover, you should be able to differentiate communication, participating products, benefits, and rule structures by simply configuring the solution internally, without the need of a developer or your loyalty agency.

Ease of doing business has long been important to both partners and vendors. Loyalty technology plays a central role in this, delivering ease of execution and differentiation in a channel loyalty program – more specifically, it plays a central role in driving partner engagement. The vendors who can easily engage their partners will have a competitive advantage over those who have trouble doing the same.

Choosing the right loyalty cloud requires you to find a SaaS solution flexible enough to have functionality such as Claim and Behavior Validation and Reporting configured on a global basis – and promotional activity, enablement and communications configured on a local basis. We’ve found some of the best performing configurations to be 40% global and 60% local. That is to say 60% of the effort should be managed locally by a vendor’s in-country teams – which will earn the buy-in and commitment to driving program performance from your local teams.

The business model transformation to the cloud has shifted the partner-vendor relationship, making it clear that vendors need to engage partners and their teams as individuals. Here again the right loyalty cloud will empower you with an integrated approach to engagement, education, measurement and rewards. Please your existing partners and attract new ones by offering an intuitive, easy-to-use program interface without complicated menus and processes. Keep in mind that you must decrease partner effort and increase partner experience, and ultimately improve loyalty.

In conclusion, successful loyalty rewards programs mimic online consumer experiences by delivering ease of use, an attractive look-and-feel and anytime/anywhere access from laptops, tablets and smartphones. Partners expect to engage with manufacturer-provided tools as easily as they do with online retailers or social applications, and are looking for similar features like shopping carts and reviews. Providing a consumer-like experience and choosing the right rewards technology will substantially improve partner engagement and increase loyalty. It’s all about decreasing partner effort and increasing the partner experience to increase loyalty.

Last week we had the pleasure of hosting Forrester analysts in our offices. Among the many interesting topics we discussed– PRM, Through-Partner Marketing, Partner Engagement and many more – one that kept coming up was the increasing relevance of Partner Experience (Px) in the channel today.

Why Px? Why now?

Customer Experience (Cx) has been a hot topic for some time now with companies examining how they can better engage with, listen to, and ultimately serve their customers. This movement was originally driven by the rise of the Internet and the opening it created for customers to assert themselves (powers of publishing providing individuals with ability to both praise and critique like never before), and has been furthered by the influences of social networking, mobile media and open-source technology. The landscape shifted the customer-vendor relationship, making it clear that companies need to engage customers as individuals.

Driven somewhat by the same technological changes, but even more so by the maturation and the transformation of the channel itself, we are seeing a fundamental change in the nature of the partner-vendor relationship. This shift has thrust partner experience, and ultimately ease of doing business, to the forefront, with vendors exploring new ways to attract and retain partners that will thrive in the “New Channel.”

Next Wednesday, May 8, EMEA Channel Development Director Ian Hutchieson and I will be diving more into this topic in a webinar titled “Superior Partner Experience – How it Will Define Winners and Losers in a Transformed Channel.” We’ll discuss what comprises Px, but more importantly what we see as the most common pitfalls channel-driven organizations fall into when dealing with both Px and Cx. Attendees will gain knowledge of key solutions for improving Px and making it as central to their strategy as Cx has become for so many companies.

Grab your seat for the webinar HERE

We hope you’ll join us.

The most hightly discussed topics at Channel Focus North America (CFNA) in Miami this year were business transformation (to the cloud), partner loyalty and incentives. In case you’re unfamiliar with CFNA, it’s one of the leading conferences dealing with channel marketing, and sales issues for senior executives in the technology and telecom industries, and this year, like in the last 3 years, the move to the cloud took center stage.

The big realization by vendors and partners this year is that the move to this new business model is taking longer than originally expected, as cloud computing offerings are disrupting existing channel business and financial models. It has now become evident that traditional methods used to nurture partner loyalty are no longer effective. This can be seen in fully developed markets, as we are witnessing both vendors and partners forging new business relationships that will help them achieve their respective goals – which is creating fierce competition between vendors chasing the new right type of partner. Analysts are also seeing this shift with Forrester predicting around 40% of partners to disappear due to their inability to transition to this new model. Therefore, vendors are trying to recruit and retain their new partners in any way they can – which has renewed interest in loyalty. As a result, vendors are profiling their entire partner base and conducting capacity planning exercises so they can identify and select the right partners to invest in.

At CFNA, I spoke about incenting partners in both the “traditional” and “cloud” models, focusing on business model transformation to the cloud, the renewed interest in loyalty and the coin operated nature of the channel. I want to briefly share a few of the points that resonated most with the audience at Channel Focus.

1. As you move from the traditional incentive model to the cloud model, incentives need to support more than deals won and quarterly revenue goals. Vendors moving to the cloud must provide incentives across the partner life-cycle and throughout the sales cycle as well as incent marketing and lead generation activities to keep up with rapid business transformation. Incenting opportunities, not just deals – from qualified leads to closed deals – and incenting education, training and certification helps partners ramp-up for new business models.
2. Marketing through partners, which has typically been delivered via MDF and Co-op, is undergoing a transformation of its own. Top vendors are broadening the scope of classic MDF/Co-op to include a full spectrum of marketing services and support options. Best-in-class vendor assisted marketing leverages pre-packaged marketing campaigns that include innovative packages like social marketing, eBooks and ghost blogging. In essence, these vendors are “paying out” MDF and Co-op via a catalog of pre-packaged, close-looped marketing campaigns, as well as cash for traditional partners.
3. When you move from a traditional (transactional) business model to a cloud (recurring revenue) model, your focus must shift to driving the right behaviors. Therefore you must understand what motivates partner behavior to ensure you reward not only achievements, but more importantly the actions and activities that accelerate the desired result.
4. Vendors know ease of doing business is important to partners, yet partner surveys reveal many of the same requests year-over-year, and it’s clear that vendors have yet to deliver some of the features partners seek. Partners expect to engage with vendor-provided tools as easily as they do with online retailers or social applications. In the cloud “ease of doing business” is all about delivering a consumer-like experience – you must decrease partner effort to increase partner loyalty. This includes providing anywhere access from laptops, tablets and smartphones.
5. Rewarding partners for closing deals is no longer enough – and rewarding partners equally through the sales cycle may not work if a vendor has a broad (and/or shifting) portfolio of services. In a recurring revenue model, focus moves from deal closing to each step prior to closing – from lead generation to opportunity registration. Incenting these behaviors keeps the funnel full, especially when individual deal value is lower in a recurring revenue services-focused business.

I don’t want to turn this post into a book, so if you want to know more, please get your free copy of 16 Winning Strategies to Maximize Your Rewards & Loyalty Program. Or you can feel free to contact me directly and I’d be happy to answer any question around incenting partners in both the ‘Traditional’ and ‘Cloud’ models.

Ciao!

Yeah, yeah, the title is riffing off of a Will Smith song that I probably won’t be able to get out of my head now.  But “sticky partner loyalty” is a concept I think we’re all going to be hearing more about this year.  Forrester has been taking a pretty close look at partner loyalty in recent months (releasing a very interesting Channel Partner Loyalty Playbook). In discussing loyalty, they clearly differentiate between the quick hits of loyalty that, say, an incentive payment might engender (a partner may feel loyalty toward you about as long as it takes to spend the money) versus a more enduring kind of loyalty – loyalty that is “sticky.”

A loyalty program that has staying power is one that effectively combines elements that provide both short term (like incentives) and long term (like a strong product set)components to build a strong relationship between you, the manufacturer, and your partner companies.

As a manufacturer, just how important is it right now to think about partner loyalty?

Very, very important.

There is a subtle shift in power taking place in the channel. Before the Great Recession, manufacturers were in the drivers’ seat(s). There was a generous supply of partner companies eager to sell a variety of vendor products and solutions and partners needed the technical expertise and branding power of manufacturers to close their deals. The Great Recession winnowed the field however and many partnering companies have emerged (or been “born in the cloud”) with greater technical expertise in-house and stronger sales and marketing skills. They are running their own business (versus operating as an extension of a manufacturer’s sales force) – and brand – and they are beginning to raise their voices.

Here’s why they have more power:

• The channel is transforming – the effects of Cloud, economic challenges, faster-paced changes in technology, which means….
• There are fewer partner companies – they didn’t survive the recession, they merged or were acquired, or they shuttered their doors, therefore….
• Manufacturers are competing for a more limited pool of top partners.

And partners are realizing that. Which is why manufacturers find themselves in a position of needing to “court” partners – it’s not enough to recruit partners, or even to have them in the fold already (don’t take your existing channel ecosystem for granted!) – you need to figure out how to keep them there.  The truth is that partners have more choices than ever before and if they don’t like what you have to offer, they seem even more willing than ever to look for alternatives.

How do you make your partner program enticing enough to lure in and retain the best partner companies?  Well, if you’re looking for the magic one- or two-step answer, regrettably that’s not quite the case.  And you’re probably pretty familiar with most of the elements:  a strong product strategy that ensures not only that you the manufacturer generates revenue, but your partners do too; a partner program with an eye on ensuring that it’s easy to do business with you, marketing support that works across the sales cycle, and yes, incentives too.  All are elements.  It also takes a thread running through it of something a bit more intangible – an attitude of true collaboration. Partnering businesses are feeling their power and they are looking to establish relationships – as a business, with a business – with you.

And it takes all of it to create sticky loyalty.

As an acronym, PRM stands for “Partner Relationship Management”—a rather nebulous term that is both a noun and an engagement philosophy.  Its counterpart “CRM” or “Customer Relationship Management” would be nearly as nebulous, but thanks to Salesforce.com, everyone now knows what it is….or do they?  Like it’s CRM twin, in its basic form PRM is a way to identify and manage your partners (accounts), their employees (contacts) and provide a foundation to track key interactions between you (the vendor) and partners.  However, PRM interactions are much different than customer interactions managed in typical CRM platform which are necessary to support specialized partner programs that may include, but are not limited to, MDF and various other incentive programs.  Applications that may be common to both PRM and CRM environment, such as opportunity management, require very different features and functionality for PRM than CRM.

On average, today’s business-to-business channel marketers achieve their revenue through a mix that is made up of 50%-80% channel, and the balance through direct sales.  The trend we are seeing from global enterprise marketers is that they are striving for a single platform that can manage both direct customer interactions (CRM) and channel interactions (PRM) in an effort to attain a 360 view of downstream sales activity and program performance.  Considering the disparity in interactions and program requirements between direct and indirect sales, what is the best means to that end?  There are three choices, each outlined below with pro’s and con’s to each:

Customize your CRM application to manage PRM programs:  At first glance, this may seem the most desirable path as a means of capturing all sales and programmatic data, but CRM solutions are not designed to perform all the tasks necessary to manage specialized channel programs.  CRM systems are typically missing the sophisticated financial management functionality and other programmatic attributes required to manage partner programs.

Specialized PRM platforms:  There are available PRM platform solutions that are designed to manage a broad array of programmatic functions common in today’s channel program, including MDF, deal registration, learning management, etc.  Many marketers find these solutions to be the best option, especially for those that have a smaller partner universe supported by a common program and product mix for all channel partners.  However, because these solutions are designed to run as stand-alone platforms, partner data is separated from direct customer data which may limit reporting capabilities required for a 360-degree view of all downstream activities. In addition, these platforms, while offering a broad range of functionality, may be quite limiting in their ability to manage complex channel programs—often found in global channel programs that support several partner tiers, multiple product certifications, and varying program components from region to region.

Hybrid solutions:  In an ideal world, there would be a single source of truth for all indirect and direct channel sales and program data with minimal data silos.  This single source can be utilized to create meaningful business intelligence relevant for all stakeholders. However, the system would also have the flexibility needed to manage the wide range of channel programs utilized by today’s enterprise global channel marketers.  These solutions are emerging.  Not so long ago, marketers would utilize best of breed point solutions (single function) that were somehow cobbled together in clunky partner portals. Today, however, the integration of multiple systems that provide the best of all worlds is more easily achieved than ever before.  Using this approach, enterprise channel marketers benefit from the robust features offered by specialized applications designed to manage channel programs, yet utilize their CRM platform as system of record for both partner information, streamline access for internal stakeholders, and provide cross-program reporting—often without paying for expensive CRM licenses to extend PRM functionality to participating partners.

There is no one-size-fits all solution for everyone, and but each option should be investigated closely.  Your choice, and infrastructure investment, will likely have to serve your needs for years to come, so make sure your decision making process includes both current and future needs, because it could be a costly mistake if you misjudge your requirements and don’t carefully consider your options.

We’re all striving for the same thing, right? We want our channel investments to deliver incremental ROI, we want global reach, we want partners to promote our products and solutions, and we want data that supports everything we’re doing. It sounds simple enough but with the economy in recovery mode and a rapidly changing marketplace in 2013 vendors are locked in fierce competition as they try to create a seamless channel experience.  The below six key areas are important for vendors to focus efforts on when building (or reconstructing) your channel ecosystem.

1)      Evolving your partner program. Cloud computing is changing your partners’ position in the demand chain. Therefore, transitioning partners to the cloud computing business model will require financial engineering on the part of vendors. Partners need help from vendors to develop a sound cloud services business plan. Vendors need to help them select the right model of engagement based on current and planned cloud business goals.

Vendors should also consider offering program enhancements such as a “financial bridge” (meaning vendors pay partners the first year equivalent of revenues of a two or three year contract in one lump sum.) This is because partners that commit to business model transformation will experience a significant gap in revenues when switching from a transactional to a subscription or pay-by-use model.

2)      Running a data-driven channel management organization. Do you know which of your programs actually change partner behavior? Many vendors focus on driving cost out of the 5 percent of channel spend required to manage program delivery instead of optimizing the 95% of funds distributed to partners. Identify specific programs and partner segments where benefits are effective (or not) and shift financial incentives between partner segments, attributes and programs to increase performance and optimize investment. To assess whether your programs are currently working, create a control group of those partners participating and those not. Evaluate the performance of participants vs. control group for sales, frequency of purchase, average deal, etc. Factor in the cost of running the program, identify the differences, and figure out where you need to improve your program.

3)       Create a better partner experience. Partner portals create a huge opportunity for you to differentiate from your competitors. Ease-of-use, targeted, relevant and up-to-date are vital characteristics of a partner portal. Your portal is the gateway to your partner community and the face of the vendor-partner relationship. Vendors should make it easy for partners to see where they stand and should provide targeted, relevant content based on partners’ attributes and core competencies. Click here for more best practices to create a better partner experience.

4)      Implementing vendor-led marketing – the right way. Vendors need to provide an efficient and easy way for partners to market without requiring the expertise of a CMO. Vendors, provide your partners with a one-stop platform with pre-approved marketing programs. Motivate partners by providing them MDF and Co-op funds to accelerate partner adoption. These are the most popular incentive programs offered, yet a lot of vendors are dissatisfied with the results of these funds. Vendors should facilitate this entire process for their partners. Offer integrated, pre-packaged campaigns and sequence multiple campaigns throughout the year. Provide an optional online concierge service and resource library to help answer questions. Conduct peer reviews in the selection process and fund programs by direct-deduct MDF/Co-op or credit cards (eliminating any more administrative work.)

5)      Developing a CRM/PRM infrastructure that supports partner and program infrastructure. Vendors should assess their current PRM environments in light of channel program requirements, and then define an ideal future state PRM environment that supports your channel program vision. Identify the gaps between your current and future state PRM environment, and then create a prioritized, actionable roadmap to bridge the gap between the two. Make sure your CRM data model supports a 360 degree view of your partners and ensure your partner portal provides a streamlined user experience, delivers profile-driven content and takes advantage of enterprise-class portal capabilities. Also provide global program templates that enable delivery of multiple channel programs with standardized tools and processes and operate locally.

6)      Build a strong Channel Account Manager team. While vendors rush to introduce new or enhanced partner programs, an important aspect of channel enablement is often overlooked – the channel account team. To build a great channel account team, vendors need to assess their CAMs skill set and implement a practical, “hands on” training curriculum that brings the channel account management team’s training and abilities to a consistent level of excellence. This requires a combination of face-to-face training augmented with online training courses. The curriculum should be designed in a workshop format to foster interaction and gain knowledge through interactive practice. Training topics should include:

To read the full eBook by channel strategy expert William Gilsing, click here.

As we finalize the topics of discussion for our webinar this week, a few things have become evident which are difficult to share with panelists from across the IT and Telco industry. Research suggests around 38% of companies claim to measure loyalty rewards program ROI, but we would submit that only about 3% of vendors are really getting the job done holistically – and yet economic conditions and channel transformation make the measurement of loyalty program performance imperative for success.

Measuring program ROI and determining program success sounds a little like the perennial “eat right and exercise regularly” – we all know we should do it, but all too often many of us let one or the other slip (eating right, exercising…or measuring incentive success). A data driven approach to ROI through analytics is needed to truly measure reward program performance on a consistent basis and ensure your programs stay in shape.

A fundamental understanding of ROI requires you have the cleanest sales data possible and top performing vendors are spending resources to ensure that data is in a good place, especially where sales to partners go through distribution. However, it’s surprising to see that most vendors aren’t undertaking analytics exercises to drive smarter incentives targeting and design, as many vendors have the basic reporting in place to make simple associations between programs and the sales they appear to drive.

Reporting isn’t analytics and cannot give you the most important aspect of true measurement which is the INCREMENTALITY in performance that incentives do – or do not – drive. Top performing vendors are engaging in proper offline analytics exercises, and understanding that even within a given program incentives have different levels of impact on different groups of partners. From our work last year, we are confident improvements can be made to rewards programs through simply targeting changes that place incentives where they truly drive value. Top performing vendors have all of this down and can see in some instances how simple ratcheting up or down of incentives levels can make an impact on performance.

The intelligence derived through this analytics activity is taking people toward the often inevitable conclusion that some programs work and some don’t, and that reducing the number of programs makes it easier for partners to engage and drive even better performance. Mining through all that data requires a solid grounding in analytics methodology, so you might want to tune in to our latest webinar where Ian Hutchieson and I will be sharing best practices and walking all of us through the process of wrangling the data for insight. You can reserve your seat for the webinar  HERE.

Partner loyalty is a big topic for 2013 – manufacturers are now competing for a shrinking pool of partners. Surveys can be one way for you to engage with your partner ecosystem and let them know that you respect their opinions and are willing to make changes in response to their feedback.

Someone recently asked me about partner surveys – how often you should conduct them, how many questions to ask and maybe even what questions are “typical” for any particular survey (your rewards program, your MDF program, etc.). As I thought about my response, I realized that I don’t have any firm suggestions for the number of questions that should be asked – at all. The correct answer is really “it depends” (and don’t we all hate that sort of answer?). But yes, it depends. It depends on the complexity of the program, on the complexity of your partner ecosystem, it depends on the solutions you offer, and…hey, just like shopping for anything else, it depends on what you can afford.

But there is one thing I would tell any manufacturer looking to survey partners on any aspect of their program:

Only ask partners about their satisfaction or perception of any aspect of your program if you are willing to make adjustments to that program or element of the program.

When you conduct a survey and ask partners about a program element, you are creating an expectation on the part of the partner that as a manufacturer you are not only listening to their feedback, but are willing to act on that feedback. Partners become fatigued by vendor surveys when they take the time to provide feedback and then never see any changes or acknowledgement that their concerns have been heard and the vendor is planning to address an issue. They also become pretty cynical about manufacturers who continually ask about some element of the program and never make changes.

If, as the sponsor of a survey, you do not have the authority to change an element of a program – whether it be technical support, your rewards program, partner onboarding, whatever – and you do not have the buy-in from the person who does have that power, then my advice is to not ask partners about it.

If you are working with a third party on a survey for your partners, review the questions and ask yourself, “how can I respond to the results of this survey question? What sorts of tactical or strategic changes can I implement based on partner feedback?”

As to frequency, start with a baseline assessment of your partner program (or the program that you are responsible for). This of course lets you know where the “hot spots” are – the biggest pain points for your partners and you should be able to prioritize actionable responses and map out your plan for program improvements. You don’t have to ask about everything in the program – which elements can you affect or improve over the next year or so? Then reassess every 12-18 months (or a few months after you’ve made some significant program improvements). As you begin the process of incremental, targeted refinements, you’ll also have your partner ecosystem on board, knowing that you’re the kind of manufacturer that cares about its partners.

As I’m making the final touches to a new eBook “The Playbook Part 2 – Through-partner marketing” I thought I’d share a sneak peek into the content. If you’re registered with us, you’ll see it in your email next Wednesday or on a social sharing site.

I’ll be touching on one area of the eBook where I share some step-by-step insights on how to get partners engaged in social media and share different ways to use it in your Through-Partner marketing efforts.

Partner engagement is a catch-all phrase widely bantered about in almost every channel discussion, often with little thought to what it truly means – or the effort that is required to achieve it. The fact remains, partner engagement, or getting partners to do stuff that you want them to, is critical to your success in the channel.

You might be thinking to yourself. Well, that’s great and all but HOW AM I SUPPOSED TO GET MY PARTNERS ENGAGED IN SOCIAL MEDIA! We’re going to share another deep secret with you… shhhhh. Don’t tell everyone. YOU have to help THEM! Partners don’t have the time or the energy to build up a social marketing plan or integrate it into their own plan.

First, let’s look at the basics. Do your partners currently market to their customers? Yes? Great! You’ve got headway. No? You’ll have to help them do it.

You don’t want to get hung up on the idea of getting a partner’s customer/prospect database. They wouldn’t give it to you anyway. What they need are tools and templates.

Integrate social media into your campaigns to get the highest lift for your partners marketing efforts. And I know, this is very basic information but it’s a good reminder to not boil the ocean.

1. Start with your message. What do you want their customers and prospects to know?
2. Create an email that speaks to the message and why your partner’s customers should care. Don’t forget your call to action.
3. Create a landing page your partners can customize with their logo and contact information. It should be a simple landing page to get more information. Capture the prospects name, company, phone number and email. After the customer/prospect has filled it out use a button to get to the next step. Button: [Get Information Now]
4. The web/lead form you used on the landing page needs to immediate notify the partner, via email, they have a lead. The form information goes to them. You provide content in the automated email to them how they should follow up. With a call? What words should they use? In an email? Provide a template in the follow up email. Whatever it is, make it easy.
5. Get them socially engaged. Most partners are already engaged but are not sure how to use social media for marketing their business. The graphic below should be shared with them to help them up their marketing game.
6. Working with incentives? Create an integrated Incentive Program Launch Communications Schedule to integrate into the other elements of your campaign. If you’re stuck and need help or just need to bounce some ideas around contact us – it’s one of our expertise – team@hawkeyechannel.com.

Enjoy! Looking forward to your feedback on the eBook coming out next week!

I hope you had an opportunity to attend our recent webinar: “Measuring Channel Program Performance and ROI.” It was an interactive session with lots of questions from the attendees. It’s great to know that this topic is foremost in many people’s minds as we enter the New Year.

In the webinar we emphasized that tracking channel performance creates a culture of data driven channel management. Metrics measure current operational performance – typical data points such as the number of click-throughs and claims processed. Measuring partner and program performance (channel analytics) implies obtaining intelligent insight from your data and applying the analysis to make strategic channel decisions about programs and partners. Data driven management needs to be ingrained at all levels of the channel organization and all departments, including channel marketing, sales, operations and finance.

Okay, so how about getting started with a data driven channel management discipline in 2013?

Think about the following core elements:

1. Data gathering and structure

It starts with 360 data…

An analytical data mart combines critical information to give you a 360° view of your partners, program participation and sales

2. Followed by Performance Measurement at the individual program level.

3. And finally – bringing it all together – Performance Measurement at the Partner and Program level.

Happy New Year! Click here to watch the recording of our webinar so you can make 2013 the year of (channel) Data Driven Management.

Click here to download the companion whitepaper.