Most of the industry’s biggest IT providers, both vendors and distributors, are heavily invested in front-end incentives and rebates as a way to help resellers and solutions providers improve sales.
Most of the industry’s biggest IT providers, both vendors and distributors, are heavily invested in front-end incentives and rebates as a way to help resellers and solutions providers improve sales. Most vendors and distributors in the Middle East channel have programmes that reward their channel partners for selling their products, IT services or both. With market conditions remaining tough, what are the most effective ways of incentivising and rewarding channel partners?
As business in the regional IT market is getting more competitive, and the commoditisation of IT is leading to declining margins, vendors and distributors have had to come up with incentive programmes and rebate schemes to offer their reseller partners to help drive sales. With partner rewards playing a crucial role when funding top line resellers, some vendors have come up with innovative methods to secure a proficient and successful business relationship with their channels, offering partners discounts and a whole host of other rebates and benefits.
Santosh Varghese, GM, Computer Systems Division, Toshiba Gulf, said that Toshiba offers partners a variety of incentives and initiatives, besides the standard margins on products. Varghese said: “We carry out co-op marketing support, provide floor sales support (promotions), assist our partners in lifecyle management and inventory, conduct sell through focused approach and engage with them in product planning and forecasting.”
Varghese added that all Toshiba’s channel partners share a joint business plan with the company and all incentive schemes and sales support provided to every partner is in line with the agreed business plans.
Ciaran Forde, VP, Enterprise, Middle East and Africa, CommScope, said rewards come with achievement, and the company’s incentive schemes aim to recognise partner investments in its channel programme.
Forde said: “CommScope offers its BusinessPartner community a variety of commercial, technical and marketing incentives, designed to reward those partners who achieve on commitments and focus on particular solution sets that benefit our mutual business and customer groups.”
He added that CommScope’s ‘BusinessPartner Program’ offers different levels of expertise and assistance. The company has Authorised, Prestige and Elite BusinessPartners depending on their level within the channel programme. He explained that: “As a qualified partner, they have already met the training levels defined, but they are also considered on business performance, expertise and experience needed for specific IT initiatives. Each participating partner is working to reach specific goals in terms or performance, technology focus and customer satisfaction. This is a key part of ensuring a reliable, efficient network environment for our channel base.”
At Red Hat, George DeBono, GM, MEA region, said that the enterprise software company offers its partners three different monetary incentives. According to DeBono, the level of the incentive is proportionate to one of Red Hat’s partnership tiers, Advanced and Premier. Therefore, he said discounts offered to a Premier partner would be higher than those offered to an Advanced member.
DeBono explained that: “The discount offered is per deal. So if you have managed to finalise a deal, then you will get an upfront discount on the product. The process is clearly defined and completely transparent. Depending on their partner level, we decide what discount they are entitled to. We have an internal process which correlates the discount offered with a number of parameters such as deal size, product type, partner level and so forth.”
The second type of incentive offered by Red Hat, explained DeBono is a discount dependant on the size of the deal and product in question. “The company calls this incremental discount. This is added to the regular discount offered by Red Hat to its partners. This deal is not yet available in the region and Red Hat is considering implementing it soon. It will be offered only for Advanced and Premier partners, and will not be valid on key accounts, government entities and renewed business,” he said.
Red Hat’s third incentive involves discounts that are offered on its trainings, states the open-source software company. DeBono added that: “In the Middle East, partners receive training from qualified Red Hat certified training partners. The incentive here is that we have agreements with these training partners and so they offer these training initiatives to our Advanced and Premier partners at discount rates as compared to an unaffiliated entity.”
For printing and imaging solutions vendor, Xerox, front-end incentives are an important element to its channel engagement model in the Middle East. Dan Smith, head of integrated marketing, MEA, Xerox, said it is essential to offer attractive incentives to channel partners. Smith explained that Xerox has always looked to provide value and examine its offerings to ensure these remain relevant to partners. He said Xerox is building on its incentive programme to offer more services pre-packaged and aimed at SMBs. “Additionally, there are new products in store in 2012, which Xerox believes will lend significant incremental opportunity to partners.
“Some of the incentives Xerox offers registered resellers and distributors are: developer equipment programmes, popular Try & Buy programmes, enhanced support in development of cost-per-page solutions and comprehensive managed print services,” he said.
320 days ago
Rewarding partners with $ value has become a routine process and a tacit agreement between the vendor and C-level executives of partners. May this requires a shift into a 3rd gear to channel resources and focus on recognizing the ground level performers.