8 Ways To Feed The Channel
How happy are solution providers with the way vendors are compensating and supporting their channel partners?
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Plotting solution provider satisfaction ratings (x-axis) against importance ratings (y-axis) provides some insight into how well eight forms of vendor compensation align with solution providers' needs. The axis meet at the average ratings point, with above-average satisfaction ratings falling into the right-hand quadrants and above-average importance ratings rising into the upper quadrants.
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Margins:
The long-term trend toward declining upfront margins on product sales has been a perennial challenge for the channel. Solution providers across the board consistently ranked margins highest in importance but lowest in satisfaction, putting margins in the upper-left "problem area" quadrant. Solution providers in managed services and back-office software were slightly more satisfied with product margins than those in other areas, while solution providers in PC hardware and peripherals areas were least satisfied.
Professional Services Opportunities: Professional service opportunities appear to be driving most channel partnerships. On average, solution providers ranked professional service opportunities second highest both in importance and satisfaction, putting it squarely in the upper-right "in alignment" quadrant. Managed services and back-office software solution providers were again the most satisfied with service opportunities, while PC hardware and peripherals solution providers were again the least satisfied.
Maintenance Opportunities: Maintenance opportunities also were in alignment with solution provider needs, ranking third in importance and fourth in satisfaction. Here, wireless mobility and security solution providers were the most satisfied, and peripherals and back-office software solution providers were the least satisfied.
Free Training: Vendors appeared to be doing a good job of delivering free training, an area that is also increasingly important to solution providers as they move into emerging and new areas. Solution providers gave free training the highest rating for satisfaction and the fourth-highest rating for importance. Wireless mobility and PC hardware solution providers were most satisfied with training, while back-office software and peripherals solution providers were least satisfied.
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Agents' Fees: As might be expected, agents' fees were important to some solution providers but not to others. PC hardware and back-office software solution providers ranked agents' fees among the top three most-important forms of compensation. At the same time, hardware resellers were also among the least satisfied, while back-office applications solution providers were the most satisfied, perhaps thanks to revenue streams from licensing renewal fees. While there was a wide disparity in the ratings by technology area, agents' fees overall fell near the middle of the chart, coming in fifth in both satisfaction and importance.
Free/Discounted Demo Units: Not a make-or-break component of vendor compensation packages, demo unit programs also fell near the middle of the chart, ranking slightly above-average in satisfaction and slightly below-average in importance. That put them in the "nice-to-have" quadrant. Demo units were more important to back-office software and PC hardware solution providers than other solution providers and less important to network infrastructure and wireless mobility solution providers.
Rebates: Solution providers were decidedly non-committal about rebate programs, ranking them second to last in both importance and satisfaction, perhaps indicating the programs are not widespread enough and too difficult to manage for most to take advantage of them. Managed services and storage solution providers were the most satisfied with rebate programs, while network infrastructure and middleware and infrastructure software solution providers were the least satisfied.
SPIFs: SPIFs also fell into the lower-left "don't need, don't want" quadrant, coming in dead last in importance and third from last in satisfaction behind rebates and margins.