Should You Adjust Your Channel Program?
In the last blog we talked about the need to make adjustments in channel management. Adjustments need to be made to address changes in the market. Sounds very basic, but it’s much more complex. Market changes are multifaceted and each of the below items needs to be considered as you adjust:
- New Technology
- New Business Models
- Partner Attrition/Consolidation/Mergers
- Cost and Availability of Support
- Customer Demand
Partner Programs are the foundational rules and base discounts provided to your partners. This is the foundation to you Channel strategy, it can attract and retain partners and sometimes even eliminate partners. Within your program, setting the baseline for participation and performance is a must.
We don’t recommend major changes to your Partner Program based on market changes. In general, you should try promotions first as a market change is generally temporary (more on Promotions in the next blog). However, when it appears to be a longer-term change, then you should consider adjusting your program. New technologies, new regulations and new business models generally result in a long-term market change. These events are generally Market Disruptors. An example is when Uber changes the transportation industry, or Amazon changed retail. A technology disruptor is a product that can replace yours at a significantly lower cost or transforms the capabilities of the product dramatically.
Most companies will react to a technology disruption with a promotion, reducing their product price and profit while increasing the partner profitability. This rarely works. The better adjustment is to find alternate channels that do not compete with the new technology, agents, referrals and new or focused vertical markets that can not leverage the new technology. In addition, look to protect your customer base with your existing partners. This can be done with a new support model and through movement of support services to your channel partners. Moving to a more vertical approach may require new partners, or development of supporting use cases, value propositions and vertical differentiators from the new technology in support of your existing partners. Compete with value vs. discounts.
Do you have program adjustment changes that you can share? Reach out and help out!