SAP Launches Sales-Lead Reward Program

In a bid to recruit new channel partners and expand sales to small and midsize companies, SAP is launching a business referral program that rewards solution providers -- even those who are not in the vendor's PartnerEdge channel partner program -- for providing SAP with sales leads.

Under the SAP Referral initiative, announced today, solution providers can earn five percent of a deal's net software license value once a deal is closed, said Patricia Hume, SAP senior vice president of global SME (small and midsize enterprise) indirect channel, in an interview.

Creating "buzz" among solution providers that aren't SAP partners is a goal of the referral program, Hume said. "We know that in order to continue to grow our SME business we need to recruit new partners. It's all about partner ecosystem expansion." SAP is recruiting solution provider partners to expand both its geographical and vertical industry coverage, she said.

(Hume was named to her current post in December as part of a broad reorganization of SAP's SME business unit.)

SAP Referral provides a dedicated Website portal where solution providers register, enter sales prospects and check on the status of referred leads. The program is being operated separately from SAP's PartnerEdge program and is open to SAP partners and solution providers that are not PartnerEdge members.

While some solution providers will be following through on the leads they provide, some leads will be acted on by SAP's direct sales force while others will be passed on to other channel partners.

The referral effort covers SAP's SME software product lines including BusinessOne, Business ByDesign and Business All-in-One, according to Hume. The 5-percent fee would be in addition to discounts, market development funds and other incentives solution providers earn through PartnerEdge.

SAP has been piloting the referral program in parts of the U.S., Germany and Latin America and is now launching the program globally. Hume said the goal is to register 2,000 referral members through the program by the end of this year.

Forrest Koch, president of Omega Business Solutions, a Beaverton, Ore.-based solution provider and SAP gold channel partner, says the referral component of the PartnerEdge program has served him well and he cautions SAP against recruiting too many resellers. He said Microsoft made that mistake and Omega sold off its Microsoft practice eight months ago because too many resellers led to commoditization. "If they move toward that direction, that would be a mistake," he said of SAP.

Vendors are discovering the importance of rewarding solution providers that provide sales leads. Last week IBM formally launched its Software Value Incentive program under which the company offers financial rewards to solution providers that identify and develop sales opportunities, but don't always handle product fulfillment.