A leading technology infrastructure provider wanted to understand competitor partner incentive programs, and partner preferences, to help shape their own partner incentive strategy. They recognized that partners have many technology vendors and solutions to choose from, so incentives can influence which solutions partners recommend to clients. Crafting a desirable and competitive incentive strategy was key to a healthy partner ecosystem. At the same time, partner incentives take away from the bottom line, so the company would need to balance lavish incentives with profit goals.
The Solution
We partnered with the company to conduct in-depth interviews with current competitor partners and other industry experts. The research investigated the types of incentives offered, incentive ranges, and partner sentiments towards different incentive types and levels.
The Outcome
The research found that while incentives are important to partners, meeting client needs is the top motivator for partner recommendations. However, incentives can still influence partners when multiple solutions can get the job done. Our research found the most attractive incentives for partners including:
- Ideal front-end margins
- Typical back-end rebates
- Required deal registration discount percentages
- Marketing funds (MDFs) ranges
- Sentiment for the value of individual spiffs
We also discovered how programs should scale with partner volume.
Ultimately, we learned that one of the best things a vendor can do for partner profitability is ensure there are plenty of service opportunities for partners. Increasingly, partners are seeing less revenue on product sales, and want a wide lane to provide lucrative services for customers (implementation, customization, and ongoing management).
The research also found that certification requirements can often be out of step with the volume of partner sales, and can make partnering not worth it for smaller partners.
Our findings and recommendations led the client to significantly and confidently revamp their partner strategy, leading to increased partner driven revenue and satisfaction.