In a blog post last August, I introduced tips on recruiting channel partners . A large part of recruitment is the ability to ‘walk the walk’ with your resellers. Offering marketing programs that reward retention and loyalty goes a long way toward recruiting, building partnerships and growing the indirect side of your business.
Channel programs fall into three strategic buckets: recruitment, retention and loyalty. Partners that are highly engaged use as many resources from their vendors as possible. So it’s important to create programs that are useful to the reseller, complement their existing marketing strategies and support your channel goals.
So let’s go over retention and loyalty programs. For purposes of this post, I’m going to use the terms reseller and partner interchangeably.
Retention programs by design are meant to keep the partner engaged in selling your products and services. Some retention programs should be strategic; long lived, it drives sales over a long period of time. Other retention programs are short-lived and are designed to bump sales quickly.
An example of a strategic retention program is a sliding margin scale designed to pay higher margins to larger volume resellers. Once the reseller reaches a certain revenue goal, the margin increases. Be sure to put parameters around this program to keep the volume sales top of mind.
A model for this might look like:
$0.00 – $5,000 monthly sales = 28%
$5,0001 – $9,999 monthly sales = 29%
$10,000 – $14,999 monthly sales = 30%
$15,000 monthly sales = 32%
A short term retention program is simpler and is typically intended for reseller sales and sales management teams. Set goals for tactical programs that address your needs and that will be a good incentive for your reseller to want to participate.
So as an example, as a channel rep for a wireless company, I would offer sales reps in major retailers $10 per phone activated with my company during a specified month. Sales management got $500 if there were 100 or more activations in the month. This model kept me and my company top of mind with both the sales rep and the sales management. The ‘spiff’ for the sales rep has an easy entry point – they did their job and earned more money. The sales management team is incented with a cash reward to grow the monthly sales.
Use short term programs as needed, to move excessive inventory, or to promote a new or seasonal product.
Loyalty programs reward a partner over the long term for selling and supporting the products you offer. In many industries, loyalty programs offer awards and gifts to upper management at your top resellers. As an example, I worked in the professional photography industry for years and the major manufacturers offered their top resellers an all expense paid trip to Las Vegas for the annual PMA conference. While there, they also attended the company dealer meeting and dinner. Top partners were offered marketing support to assist them in spending co-op marketing funds.
A loyalty program offers you the chance to highlight your top business partners with awards and recognition. Both go a long way in maintaining a positive, mutually beneficial relationship.
Be prepared to run models on margins and costs to determine if a program makes sense for your business. There are endless ways to build retention and loyalty programs but look at them over the long haul – can you sustain the program and will it meet the goals you have set? Also be prepared to measure and tweak programs as needed.
Tracy focuses on channel and partner marketing at ReadyTalk, building out marketing programs to recruit partners and reinforce engagement with them. When she’s not coming up with marketing plans she likes to compete in canine freestyle Frisbee and ride her Ninja motorcycle.