Avaya's director of channel programs on Wednesday offered additional details on how Avaya will reward and incentivize its partners in the new year -- including bigger discounts specific to deal registration -- and what it's channel program is expected to look like a a few years from now.
As Avaya looks to evolve its partner community and move, as its channel chiefs described, to a program and rewards structure that is more value-based than volume-based, Avaya is organizing how it compensates partners around several desired outcomes. Those include the growth in sales of products Avaya labels "strategic," increased customer satisfaction, increased services attachment and renewal, new customer acquisition, specializations, portfolio depth, new market penetration and new product adoption.
"We will gear the majority of our reward dollars to those partners that are driving these outcomes," said Barat Dickman, Avaya's director of global channel programs, addressing partners at Avaya's U.S. partner conference in Las Vegas.
Avaya is recruiting new partners and also cutting underperforming partners by the hundreds. But it's also looking to ensure growth in its core partner base. The promotion of VARs and integrators to higher partnership tiers has been steady, Dickman said, and over the past year, the number of Platinum Avaya partners grew by 14 percent, the number of Gold Avaya partners grew by 25 percent, and the number of Silver Avaya partners grew by 15 percent.
Dickman also offered some data on Avaya's channel business and channel program spending. Overall, 78 percent of Avaya's U.S. business goes through the channel, he said, and last year, Avaya invested $200 million in channel programs. with $10 million in rebates paid out to Silver, Gold and Platinum partners. Customer satisfaction scores -- which Avaya will use as part of the way it evaluates partner compensation going forward -- are higher among U.S.-based channel partners than any other Avaya sales theater.
Partners should expect their compensation to be tied to a combination of product expertise, solution specializations, enhanced deal registration for acquiring new customers and selling strategic products, and more promotions and discounts for program levels and specializations. Specific to deal registration, Avaya is also going to be adding extra incentives for situations such as the displacement of a competitive product, and the work partners do early in deals, even if they don't end up fulfilling them, Dickman said.
Over the next few years, Dickman said, the requirements for Avaya partner status will change. Authorized partners will have the same requirements as before, but in the Silver level, specific product specializations will replace revenue requirements and in the Platinum and Gold levels, master specializations will replace revenue requirements.
"That's partners who can sell deeply and broadly across a solution," Dickman said of the master specialization concept, offering the idea of a partner that sells not only contact center products but also relevant reporting and analytics tools as well.
Dickman said Avaya will offer at least nine months of lead time before officially making those tier requirement changes.
Avaya is teeing up several new promotions for its 2012 fiscal year, which just started. According to Dickman, Avaya has renewed its Grow Right Growth rebate -- which covers sales of strategic products -- and upped it to 20 percent, with no payout cap for 2012. The deal registration incentive will now be 12 percent, up from 10 percent, and Avaya will also not limit the funding for market development funds, with 100 percent reimbursement possible for qualified partner marketing activities.
Avaya has changed its loyalty rebate program to reflect 0.5 percent on all Avaya voice sales, Dickman added. In addition, there is a brand new rebate on Avaya Support Advantage maintenance contracts, in which Co-Delivery partners can see between 8 percent and 30 percent rebates on their Support Advantage contracts if they meet certain thresholds.
Last, Avaya has simplified how it pays retail maintenance commissions. There are now four payout categories, down from 12 last year, and there is a single rate payer per partner status, be it Silver, Gold or Platinum. Dickman said Avaya has also increased the rates on its utility commissions program and has other new programs for Support Advantage sales and heritage Nortel enterprise sales, too.