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Symantec is keenly aware of the consequences of not managing channel conflict. Its program for protecting its solution providers' sales is a reflection of the best practices exercised by many vendors. One significant example is its opportunity registration program.
"Opportunity registration is a program where partners register an opportunity as soon as they discover it, and they're rewarded by Symantec. Getting that customer to actualize [on the sale] is the hard work," Parrish explains. "There's cost in the up-front process. A Symantec partner is set up for success, because we're helping on the front end and on the back end."
Symantec, like other top-tier vendors, offers VARs that find and nurture potential customers lower pricing on products, so they can outbid their competition.
Chuck Robbins, Cisco's vice president of U.S. and Canada channels, acknowledges the success and popularity of such opportunity registration programs.
"We tell them, 'We give you--the VAR--and only you, an incremental discount so you win the business.' Even with any discount the VAR gives the customer, our discount should still enable the partner to make a profit," Robbins says.
Sometimes driving profitability is about ensuring opportunity. Partnerships between solution providers, facilitated by vendors, is one way of combining complementary skillsets, capacity and market reach, which leads to more sales and profits. Cisco's Solution Incentive Program (SIP), for instance, supports collaboration among solution providers, application developers and ISVs.
"Solution providers submit a solution with Cisco, a sales plan and go out and sell that solution with Cisco product. SIP provides recognition that partners are doing more work when pursuing more complex solutions," Robbins says. "They're getting into different elements of a customer's wallet, where Cisco might not have been before."
Other vendor programs target specific technologies, often those that are regarded as complicated or particularly technical. Microsoft Dynamics CRM is designed to encourage adoption of third-party CRM tools that can quickly and easily augment a solution provider's offerings, enhance value to the customer and drive up the value of deals.
"Many partners work hard to identify talent to bring in," Deshaies says. "It's very costly. So we have road shows with partners throughout the United States to build a pipeline of competencies, whether in sales, technology or marketing."
Most important of all, perhaps, is that these vendors understand the crucial role the channel plays in their own profitability.
"Profitability is not just about growing margins," Cisco's Robbins says. "We've expanded our view on how partners can be profitable. We're doing things that aren't adding to costs, like showing them how we can help them get paid by their customers. And we engage third-party consultants who [teach partners how] they can be more efficient." Cisco just completed 160 partner engagements with a third party that will determine what best practices can be shared among them.
Developing a win-win climate between vendors and VARs is crucial. When profitability is important to both parties, dynamic products and programs are developed with the bottom line in mind. That focus translates into targeted solutions for the end customer, and a satisfied end user is the ultimate goal.
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