Avaya Pumps Up Deal Reg, Strategic Product Incentives2:34 PM EST Thu. Nov. 15, 2012
Avaya is adding sweeter rewards to many of its best known partner programs heading into 2013, as well as new programs for higher-tiered partners and strategic product sales, the company said Thursday during its Americas Executive Partner Forum in Cancun, Mexico.
An important measure of Avaya partner progress is the uptick in Avaya's overall sales through the channel as well as the rate at which partners are ascending to higher tiers, said Barat Dickman, senior director, global channel programs and go-to-market strategy. Avaya now sells 76 percent through the channel in the Americas, and compared to a year ago, there are 34 percent more Platinum partners, 20 percent more Gold partners and 16 percent more Silver partners, as well as a 14 percent increase in overall sales authorizations.
Recent months have included the addition of deal registration incentives for Avaya data networking products, and the referral program for Avaya's Live Connect cloud offering -- the first cloud-based compensation program from Avaya. In addition, more than 580 unique partner conferences are using Avaya's MarketLeaders marketing program, which is accessed by 63 percent of medaled Avaya partners, Dickman said.
Avaya has 14 percent more sales and design specialists than the previous year, and it has issued 3 times as many services credentials since its fiscal 2011. That means the Avaya channel has greater competencies overall, Dickman explained.
Another key Avaya metric is how its lead generation efforts have benefited partners. Avaya is passing along 1.5 times the number of qualified "hot" leads to partners than it did a year ago, and 99.5 percent of all hot leads generated by Avaya are sent directly to channel partners. Overall, Avaya passed nearly 14,000 leads to Avaya partners in its fiscal 2012, way up from less than 5,400 in the previous year.
"We did what we said we would do," Dickman said, citing other statistics such as a 14 percent year-over-year increase in global customer satisfaction with the Avaya channel.
Avaya's 2013 financial incentives will continue to focus on what Dickman described as "aligning compensation dollars with rewarding outcomes."
NEXT: Moving Forward In 2013
Next year, Avaya's commissions for retail sales of its maintenance programs in the U.S. will increase and hit 22.5 percent for Platinum partners, 19.5 percent for Gold, 18.5 percent for Silver and 18 percent for Authorized. Avaya will also continue the five-point bonus on preferred retail contracts it was giving this past year. Carson Hostetter, vice president of U.S. maintenance and managed services sales, told attendees that Avaya grew indirect maintenance revenue from 53 percent in early 2011 to 61 percent in the fourth quarter of 2012.
Among other additions, U.S. Avaya Platinum partners will soon be eligible to receive incentives for growing net-new customer business as a portion of their revenue. Specifically, Avaya will give 15 percent quarter-over-quarter rebate to partners who grow that new business -- defined as a customer who has not done business with Avaya in three years or more -- by 15 percent, with smaller incentives available for less growth going down to 5 percent. The program will launch to U.S. partners in January and is expected to be available for Canada and Latin America partners later next year.
Next, Avaya will be adding many more products to its Grow Right program, which recognizes expanded business opportunities. Now, Grow Right includes all Radvision products, all data networking products, IPO Preferred and IPO Advanced deployments, Aura Messaging, and Aura Conferencing. Partners earn 20 percent back every quarter for how they're growing those strategic product sales.
Finally, Avaya has made across-the-board updates to its deal registration programs. Starting in 2013, it will offer not only the 12 percent incentive partners were getting in 2012 but also a 17 percent "bonus category" reserved for Avaya strategic products. In addition, Avaya's entire data networking portfolio is now available for deal registration, as is the Radvision portfolio, which falls in the 17 percent category.
On top of that, Avaya is also now offering deal registration protection on federal government and state, local and education (SLED) deals. Plus, the rate of Nortel NES data deal registration has jumped from 6 percent to 20 percent.
"All of this makes Avaya's deal registration program one of the most lucrative and advanced in the industry," Avaya's Dickman said.
Avaya partners applauded the partner incentives and Avaya's renewed focus on channel profitability.
"The old way was broken and the old incentive program at Avaya was broken," said John DeLozier, senior vice president of sales and marketing for Arrow S3, the Irving, Texas-based solution provider arm of distributor Arrow. "It was never enough, and Avaya was always taken away. But Karl [Soderlund] and Avaya have put a lot of credibility into this and said, you know what, we're not just going to write checks, you're going to come to us with business plans and you're going to see returns. I think they're getting it right. We have no complaints in their direction in incentives, MDF and programs."
"Most of us as channel partners can do almost anything if we can plan for it. If it's wild swings on what to plan for, that's a lot harder," said Vel Johnson, vice president, operations, at Strategic Products & Services, a Parsippany, N.J.-based solution provider. "If Avaya executes against what it's said here and stays consistent for three years, we can plan for that. It's never enough percentages, but if we know what the plan is, we're in good shape."
PUBLISHED NOV. 15, 2012
This story was updated on Nov. 15, 2012, at 12:25 p.m. PST, to include comments made by Arrow S3's John DeLozier and Strategic Products & Services's Vel Johnson after press time.