A How-To Guide To Loyalty In High Tech

As it me or do far too many high-level executives in the business world not think enough about how to truly drive loyalty and how it's a different animal in indirect channels?

Loyalty is something that vendors increasingly want from solution providers. It's also something that when some dominant suppliers don't get it to the degree they would like, they sometimes take out a stick and try unsuccessfully to get it.

ROBERT FALETRA Can be reached at (781) 839-1202 or via e-mail at rfaletra@cmp.com.

While I've heard all the cute cliches surrounding this—"If you want loyalty, buy a dog"— there are some principles that do work and have been proven to do so over time.

First and foremost, channel loyalty cannot be mandated for any significant period of time. It has to be motivated. If you don't agree with that, stop reading this column right now because it's the most critical point in obtaining loyalty in the channel. While motivating solution providers is not always easy, it sure isn't impossible either.

Solution providers are entrepreneurs running businesses of all sizes, and they have one overriding desire: to drive revenue and profit. If they are private, then top line is less important than profit. While publicly traded solution providers are obviously concerned about both, profit still takes precedent.

So thinking through partner programs with a mind-set centered on maximizing partner profitability is important. This often isn't as easy as it sounds given the many different partner models out there. The first action is to truly understand how and what drives partner profitability.

Minimizing channel conflict is next on my guide. This is not to say there can be no conflict. Most solution providers are comfortable with the fact that there will be some conflict with suppliers, but it's important to set the rules of engagement. Doing so gives solution providers a clear understanding as to when a supplier may be competitive and when it will not.

Next up is ease of doing business. This, like the other key principles, is complex. In the end, it means dedicated resources to help partners with technical issues, payment issues, reporting issues, deal-registration issues, etc. Vendors that spin out special programs that provide back-end rebates and then make it time-consuming and slow to get the cash don't build the loyalty they should.

Another key is solid channel leadership. Every vendor with a real desire to build loyalty has to build a strong channel team with a leader that has some sway inside the organization.

There are many points I don't have room to get into here, but I would say the next critical element is shouting very loudly and consistently that you are committed to indirect channels.

That's my short list. If you want more, give me a shout.

What would you put on your list?
Make something happen. e-mail CMP Channel Group President Robert Faletra at rfaletra@cmp.com.