resurgence of spifs and rebates in global channels...and the incentive strategy around it
DESCRIPTION
Slide deck from the webinar "Resurgence of SPIFs and Rebates in Global Channels" presented on August 28, 2013. The webinar recording can be found on CCI's BrightTALK channel at https://www.brighttalk.com/webcast/9513/83379TRANSCRIPT
CCI presents a live webinar:
The Resurgence of SPIFs
and Rebates in
Global Channels
…and the incentive strategy around it
Presented by
Chris Becwar and Steven Kellam
415.427.5100 www.channelmanagement.com [email protected]
Agenda
Part 1: Background: Incentives and the evolving channel
Part 2: The resurgence of incentives – what’s driving it?
Part 3: Incentive 101: Definitions, execution & measurement
Part 4: Recap & summary
415.427.5100 www.channelmanagement.com [email protected]
• More vendors competing for their attention
• More complex products to sell, technologies to learn
• Trying to adapt to new revenue models
• More business skills asked of them
• Less one-time revenue per customer means need for more customers
• Suspicious of ‘direct threat’ by vendors
Getting Partners’ Attention Isn’t Getting Easier
415.427.5100 www.channelmanagement.com [email protected]
Why Incentives? Think Pavlov
• Immediate rewards drive behavior the best
• Targeted. Reinforce the exact behaviors you desire
• Great for driving change from one way of behaving to another
415.427.5100 www.channelmanagement.com [email protected]
Concerns and Confusion Around SPIF and Rebate Programs
Partners keep asking where they stand on
their reward
Different partners and geos require different
approaches
Will adding more SPIF campaigns
mean more campaign setup
fees?
Program viewed as
entitlement
Can’t stand up new programs fast enough
Contra or OPEX accounting? US dollars
or multi-currency?
415.427.5100 www.channelmanagement.com [email protected]
A Sea of Different Programs – What’s Right?
SPIF
SPIFF
Volume Incentives
End User Rebates
Loyalty Program
Discounts
Rebates
Deal Reg
Soft Skill Rewards
MDF/Co-op
Activity Based
Referral Rewards
Growth Rebate
Sales Contest
Tiered Program
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?
?
?
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? ?
Why CCI Understands SPIF and Rebate Programs
415.427.5100 www.channelmanagement.com [email protected]
Comprehensive Global Solutions
Distributor Reseller Sales Rep Consumer
Co-op/MDF
Streamline management of joint marketing programs
Marketing Planner
Plan marketing programs, forecast and measure ROI
SPIF & Rebates
Run short- and long-term incentive and loyalty programs
Trade In Rewards
Manage incentive programs requiring physical return of goods
Opportunity Management
Deal Registration, Lead Management, Referral Rewards and Special Pricing
415.427.5100 www.channelmanagement.com [email protected]
CCI Clients
415.427.5100 www.channelmanagement.com [email protected]
Strategic Partners
Below is a list of ‘best in class’ organizations CCI has worked and/or partnered with.
Salesforce.com – Customer and Partner Relationship Management
Relayware – Partner Relationship Management
Elastic Digital – Channel Marketing Automation
Zift Solutions – Channel Marketing Automation
Averetek – Partner Marketing Portals/Marketing Content Management
PureChannelApps– Social media syndication
Channel Eyes – Mobility Solutions
Saepio – Partner Marketing Portals/Adbuilder/Marketing Content Management
Zyme – POS data ”cleansing” and analytics
415.427.5100 www.channelmanagement.com [email protected]
Professional Services At Every Step
• Program Design
• Program Development
• Program Evolution
Complete Incentive Solutions
Highly Configurable SaaS Application
• ROI Metrics
• Multi-currency/lingual
• Fund allocation
• New fund set up
• Approval workflows
• Partner and Activity – add, deletes, changes
• Email alerts
Program Management
• Available follow-the-sun support
• Claim administration
• Payments
• Program administration
Resurgence of Incentives What’s Going On?
Three Key Factors
415.427.5100 www.channelmanagement.com [email protected]
3 Key Factors
1. Increasing Competition for Partner Mindshare
2. Mounting Pressure to Demonstrate ROI
3. The Need to Drive Partner Evolution
Resurgence Factor 1:
Increasing Competition for Partner Mindshare
415.427.5100 www.channelmanagement.com [email protected]
Channel Worlds Are Converging
Software – Fundamental shift to cloud and subscription models. Going mobile.
Telecoms and Cable Companies – Expansion of offerings to software, M2M, and virtualization
Hardware – Expansion to bundled service and software packages
415.427.5100 www.channelmanagement.com [email protected]
Channel Mix
Direct Corporate
reseller
Distributor
VAR Retailer
415.427.5100 www.channelmanagement.com [email protected]
Channel Evolution and Mix
Direct Corporate
reseller
Distributor
VAR Retailer
ISVs
System Integrators
Direct Marketers
MSPs
Hosting/ Infrastructure
OEM
Solution Providers
415.427.5100 www.channelmanagement.com [email protected]
Channel Evolution and Mix
Direct Corporate
reseller
Distributor
VAR Retailer
ISVs
Cloud Agents
System Integrators
Direct Marketers
MSPs
Hosting/ Infrastructure
OEM
Solution Providers
415.427.5100 www.channelmanagement.com [email protected]
How SPIFs and Rebates Are Helping
• Point directly to key sales influencers
• Keep you top of mind with multi-tasking partners
• Allow emphasis on desired actions more than past performance
• Level the playing field for Tier 2 and 3 partners
Resurgence Factor 2:
Mounting Pressure to Connect Spend to Revenue
415.427.5100 www.channelmanagement.com [email protected]
Drive for Efficiency
• Economic downturns breed efficiency mindset at the top
• Channel spend under the microscope – must prove ROI
• MDF – what was our return?
• SPIFs and Rebates – correlate directly to desired actions
Resurgence Factor 3:
The Need to Drive Partner Evolution
415.427.5100 www.channelmanagement.com [email protected]
Cloudy Channels Will Be Different
• Resellers
o Levelling the playing field for smaller resellers o Selling new vs. protecting legacy business
• XSP (ISP, MSP, etc.)
o Billing models and systems already in place
o Adding cloud to their portfolios
• Pure play cloud resellers / specialist teams / new
brands
• More sales agents – referral partners, creating opps for vendors to fulfil
415.427.5100 www.channelmanagement.com [email protected]
More Rewarding ‘Soft Targets’ Beyond Revenue
If you want to encourage a new way of behaving, reward the new behavior! Points-based approaches allow you to reinforce things like:
• Lead/Referral Submittal
• Execution of key marketing campaigns
• Training & certification attainment
• New logo opportunities opened, close rate on registered deals
Making Sense of the Options
The Incentive Landscape
415.427.5100 www.channelmanagement.com [email protected]
Definitions
SPIF
• A SPIF (sales performance incentive fund) is a financial incentive that encourages a sales representative to sell a specific item or group of items.
• Often used by vendors and employers to introduce new products to the market, or increase sales within a specific time frame.
• Can be a cash bonus or a prize, such as a vacation, car, or club membership.
• SPIFs are paid directly or indirectly from the manufacturer for selling product
Rebate
• A rebate is a form of price reduction on a product that has already been purchased.
• Used to encourage customers to make a purchase.
• Rebates are paid for purchasing a product directly or indirectly from the manufacturer, vs. selling product.
415.427.5100 www.channelmanagement.com [email protected]
Incentive Programs Targeted to the Individual
Title Definition Attributes
SPIF
• Stands for ‘Sales Performance Incentive Fund’
• Provides guaranteed rewards for participants (e.g. sell “X” get “$Y”)
• Usually short-term • May be quickly deployed • Requires re-launch of every program • Can tailor for different audiences (SEs/SRs) • Difficulty forecasting payout
Loyalty • Designed to build long-term mindshare and relationship
• May be designed to reward a variety of behaviors
• Rewards are often accumulative in nature • Longer plan cycle • More robust infrastructure required • Can “follow” participant
Contest • Rewards based on chance (won vs. earned)
• Subject to local laws • Good for driving mindshare, individual
/team motivation/excitement • Short- or long-term
Rebate • Drive product sales through temporary price decreases
• gather consumer info, promote new products
• ‘Instant’ or ‘mail-in’ most common • Short-term • Trade-In or Trade-Up program (rebate may
go to partner or consumer)
415.427.5100 www.channelmanagement.com [email protected]
Title Definition Attributes
Sales Performance Reward
• Reward for hitting certain pre-arranged sales goals
• Quarterly, semi-annual or annual • Different payouts for meeting/beating
quota • By partner or partner tier
Growth / Stretch Goal Rewards
• Designed to encourage growth, or stretch beyond committed sales targets or ‘normal’ performance
• Monthly, quarterly or annual • Typically tied to MoM, QoQ or YoY $
improvements, # new accounts, # new opportunities, # new products/solutions, # upsales, etc.
Value Rebate • Reward to achieving certain pre-arranged ‘soft’ goals (customer sat score averages, solution specializations or certifications)
• Targeted at activities/skills vs. final results • Often overlay on top of other
reward/rebate offerings
Volume Rebate
• Reward for hitting sales volume targets
• Quarterly or annual • % rebate(s) of sales volume, typically higher
% for higher volumes
Incentive Programs Targeted to the Entity
415.427.5100 www.channelmanagement.com [email protected]
Incentive Program Influence
Pre-Sale (Enablement/Influence)
Post-Sale (Reward/Recognition)
MDF/Joint Marketing Planning
Deal Registration
Lead Management
Referral Rewards
Special Pricing
SPIF/Rebates
Co-op Programs
Trade-in Programs
415.427.5100 www.channelmanagement.com [email protected]
Incentive Program Influence
Pre-Sale (Enablement/Influence)
Post-Sale (Reward/Recognition)
MDF/Joint Marketing Planning
Deal Registration
Lead Management
Referral Rewards
Special Pricing
Co-op Programs
Trade-in Programs
SPIF/Rebates
Strategy & Design
Five Steps to Success
415.427.5100 www.channelmanagement.com [email protected]
First: Determine Your Objective(s)
Quantitative Goals Revenue, profit, unit sales, average order size, sales/revenue target for products?
Qualitative Goals Skills/knowledge improvements, customer sat improvement, partner loyalty to your brand?
Timeframe This year, quarter, ongoing?
Your Objective
Corporate
Sales/ Marketing/
Channel Strategy
Customer
Purchase Process
Environment
Competition Geography
Partner
Go-to-Market Strategy
415.427.5100 www.channelmanagement.com [email protected]
Second: Determine Behaviors and Key Contributors
What key behaviors do you need to drive? What partners exhibit those?
What barriers exist? Level of trust with partner orgs? Your share of wallet with partner orgs?
Increased # of new prospect meetings booked? Ongoing, superior customer service?
Visibility/engagement with individuals at partner org? Willingness of orgs to let you engage?
Speed of lead follow up? Promotion of particular product or brand?
415.427.5100 www.channelmanagement.com [email protected]
Third: Determine Type and/or Mix of Programs
Meeting or Beating Quota
Improved consultative selling skills
Sales of Product Model “X” Before
Release of Model “Y”
Influence End-user to try new Product
Increasing % of new solution sales
Targeted Behavior Program Type
SPR/Rebate
SPIF
Loyalty and/or Value
Trade-Up/Trade-In
Growth/Stretch Goals
415.427.5100 www.channelmanagement.com [email protected]
Fourth: Determine Best Reward Structure to Drive Results
Title Pros Cons
Cash • Directly impacts bottom line • Good for short-term programs
with limited infrastructure requirements
• Easy to communicate
• May have limitations in global markets
• May be considered part of regular comp, less long lasting impact
Reward Cards • Reloadable cards are ideal for long-term programs
• Fixed value are more suited for short-term programs
• Offered by majors: VISA, MC, AX and are valid anywhere they are
• General high appeal due to branded card in-wallet
• Infrastructure more costly due to card printing and distribution costs
• Global Programs may have limitations due to limited distribution and/or exchange rates
Travel/ Merchandise
• Trophy/Lifestyle value of prizes
• Allows program managers to create “tiers” that create a stretch goal for participants
• Can have longer mindshare impact for participants
• Program’s appeal is largely driven by reward options and perceived attainment ability
• Global programs may have limitations due to distribution or local tax codes
• What is the ‘do/get’ proposition?
• Evaluate in relation to main comp structure – high enough for interest, not so high as to distract from primary goals
• Do the math - your investment to your return
415.427.5100 www.channelmanagement.com [email protected]
Fifth: Determine Your Metrics to Measure Success
• Baseline - what is the current state?
• Key Performance Indicators - How are they defined? What are the strategic metrics (program level) vs. tactical metrics (operational level)?
• Data Sources - What sources of data will be needed to measure these? How will this influence systems/processes?
415.427.5100 www.channelmanagement.com [email protected]
Best Practices for Designing a Program that Gets Results
1. Use the 4-Step Process
• Start with objectives
• Then behaviors/contributors
• Then program mix
• Lastly rewards
2. Target key elements of the demand chain
• Consider role of entities and individuals
• focus on influencing the behaviors that make the most difference
• Address barriers (principals may be “gatekeepers”)
3. Keep it simple SPIFers
• KISS applies – especially at individual contributor level
• Guidelines should answer for individual or organization clearly: “What do you want?” “What do I do?” “What do I get?”
4. Determine how you’ll measure success at the outset
• You can’t measure what you don’t collect or have data for
Execution & Measurement
Optimizing Execution for Program ROI
415.427.5100 www.channelmanagement.com [email protected]
Key Components for Program Execution
Communication strategy
• Pre-launch
• Launch
• During program lifecycle
Program Operations
• Registration
• Earning & claiming processes
• Rewards issuance
Measurement & ROI
• Tactical metrics capture
• Reporting
415.427.5100 www.channelmanagement.com [email protected]
Your Communication Strategy Should Have Three Parts
1. Pre-Launch Communication GOAL: pre-test program and communication to fine tune
• Review/get feedback from key partners or partner council • Pilot with a particular partner audience
2. Launch GOAL: make ‘do-get’ proposition clear, generate program enthusiasm
• ‘Roadshow’ program via in-person or webinar format • Print & online promotion (email, newsletter, poster, etc.) • Guidelines, FAQ, Quick Reference Guides, etc. available on program site
3. Program Lifecycle
GOAL: ongoing education & maintaining mindshare • Monthly emails (reminder, case studies, tips, distance from goal) • SPIF overlays (as appropriate)
• Dashboards/Reporting to track individual & team progress
415.427.5100 www.channelmanagement.com [email protected]
Key Variables of Program Operations
Registration Process
• Registration Requirements
Claiming/Earning Process
• Claim based or back end data
• Data/metrics capture
Program Support
• User support
• Auditing
Issuing of Rewards
• Fulfillment process
415.427.5100 www.channelmanagement.com [email protected]
Measuring ROI
• Standardized data capture at both the tactical & business outcome levels
• Claim should capture ‘total deal value’ vs. only specific SPIF related sale
• Assure one ‘version of the truth’ by making sure ‘cleansed’ POS data is viewable to all.
• Reports should cover Program, Partner & Individual level performance info against your metrics
415.427.5100 www.channelmanagement.com [email protected]
Five Best Practices for Optimal Program Execution
1. Pre-test if possible, or at least preview
• Understand Program appeal to all audiences
• Evaluate administrative processes
• Help forecast outcome, and fine tune before broader launch
2. Include registration at start whenever possible
• Provides an early indication of program popularity
• Capture profile information about participants on the form
• Can be further automated if participants already in your PRM
415.427.5100 www.channelmanagement.com [email protected]
5 Best Practices for Optimal Program Execution
3. Take an incentive platform approach
• Leverage single infrastructure for multiple programs
• Reduce admin costs through automation & outsourcing operations
• Gather performance data on participants over time
4. Communicate, Communicate, Communicate
• Building awareness takes time
• Share success stories, progress against goal
• Keep it fresh to maintain excitement
5. Remember, Recognition Is as Important as Reward
• Elevates success of top performers
• Sets benchmark to share
• Doesn’t need to be costly
• Establishes case study and best practices
7250 Redwood Blvd. Suite 214 Novato, CA 94945
415.427.5100 www.channelmanagement.com [email protected]
Thank You!
Chris Becwar [email protected]
Steven Kellam [email protected]