It amazes me how often manufacturers come out with new incentive programs which are only "Stacked" on top of existing programs to provide added discounts to the partner. This might be OK as long as you're accounting for them and the actual cost of sale is profitable. So, you don't think this is happening to you? Take this test:

First: Do you offer 2 or more of the following channel programs:

• Co-op/MDF
• Performance Rebates (or "stretch goals" as we refer to them)
• Channel SPIFs or other loyalty program to sales reps?
• End user trade-in
• Leads
• Opportunity management tied to incentives for closed sales
• Champion employee reimbursement programs
• Training and certification
• CAM or SE sales support

If you're answer is "no", you're done with the test (and you're missing out on some real opportunities-but that's another entry)

If your answer is "Yes", then proceed through the following questions:

1. Can you isolate the cost of all these programs to individual resellers?
2. Are you able to compare those costs with the revenue they generated?
3. Do you have an established set of guidelines and best practices for each individual program? IF so, are they practiced throughout your channel organization?
4. Are you able to evaluate the impact of each program on sales or the reseller's growth over time? (as measured in isolation, or relative to their "Peers")
5. Do you know how your partners perceive the effectiveness of these programs on their business?

If you answered "no" to one or more of the above, you have a real opportunity to improve the efficiency and effectiveness of your channel investment--the technology does exist people. But, don't worry, you're not alone. As a result, I've heard of many instances where resellers make more money "buying" rather than selling some products by selling it at their "cost" then making up the margin through other incentives. In the meantime your cost of channel sale is so high that you're forced to lay-off staff in this economy. Is that really a win/win scenario? I enjoy "stiring the pot" with these blog entries, so whether you agree or not, I'd love to hear from you either way.

Flexible Rebates:
Not merely "one size fits all" but multiple rebate programs tailored to partner tier, selling capability, and product category. These are programs that can run concurrently, each with their own shelf life and business objective (hopefully to create incremental revenue for the manufacturer!). They can change in mid-stream as business conditions and consumer responses change.

Branded SPIFs:
SPIF campaigns are the most direct route-to-market for influencing channel sales behavior. Many principals in partner organizations are reluctant to have their sales reps participate in these programs because of a perceived lack of control over the sales cycle. But successful SPIF programs engage their principals for buy-in well before the launch, aligning common business objectives between manufacturer and partner. Reloadable debit cards are a popular way to remit rewards and are literal "in-pocket" reminders of the manufacturer's branding and goodwill.

Banking Points:
The awarding of points can be understood as payment in a "currency" scaled to the measurement and performance standards set by the manufacturer. Points can be exchanged for tangible rewards: cash, vacation trips, furnishings, etc. They are often tied to incentive programs in which the manufacturer-partner objective is not revenue oriented. We know of one company program which remits points or dollars directly to their channel partners when they reach 100% of goal or above, and for those partners under 100%, the program "banks" points/dollars in partner accounts specifically for co-marketing activities.

Business Planning:
Manufacturers who understand the value of long-term investing in their channels will sometimes offer funding over a protracted period in return for a strategic business plan submitted by the channel partner. This funding is used by the partner for development purposes such as infrastructure, personnel, education, and training. The amount and type of funding is often tied to the actions and commitments by the partner to increase and accelerate manufacturer sales within an extended timeframe, usually in months or fiscal quarters. Within the past year, we have seen a number of companies making a conscious shift away from funding "one-off" partner marketing activities and toward strategic marketing campaigns which are part and parcel of annual partner business plans.

Advancing and diversifying in these areas will keep you ahead in partner mindshare and prove to invigorate your channel programs. It's a brand new year-- time to get inspired!

Michael DeBarros is the Business Development Manager at CCI. He is a veteran of 22 years in technology sales and has held channel management positions at two leading software companies. Michael's experience in working for both partners and vendors offers unique insight into today's channel challenges.

Compared to ten years ago, products are more complex, channel business models have evolved (think SaaS), channel relationships have become more complex, and customer buying behavior has changed radically. Yet, even with all the changes, many vendors cling to the same basic channel marketing programs and sales models they introduced a decade ago. To be sure, these traditional programs are more automated and easier to use than they were in 1999, but they are also increasingly undifferentiated, outdated, and unproductive. They just don't work anymore!

For channel managers it's time to forget partner web sites, email, PDF attachments, and lead generation programs; move away from webinars and breakfast meetings; and, kick traditional marketing support activities to the curb. Old channel marketing programs delivered in the traditional manner to support outdated sales processes are suddenly and obviously not going to cut it anymore. The successful next generation channel program will be built around Web 2.0 and its virtual communities, social networking, video-file-sharing and web-based collaboration.

Web 2.0 is a game changer for the channel and channel managers have to embrace it. Innovative (and mostly free) sites like Google, Facebook, YouTube, Twitter, Digg, Technorati , and many more are shifting the way people (end-user people) use the Internet to communicate, collaborate, and purchase products. All of this is fueling the use of Blogs, Video on Demand (VOD), Really Simple Syndication (RSS), podcasts, interactive web sites (wikis), and virtual communities by partners scrambling to meet the changing needs of their customers. Every level of the value chain has been impacted.

Reseller sales people increasingly complain about getting swamped by vendor emails (many of which contain presentations and big promotional files) on their Blackberries and PDAs. Reseller sales executives protest more loudly about the time spent on formal sales education when their employees rely on chat rooms and forums instead of webinars for most of their information. Partner Marketing managers expect links, box ads, electronic customer newsletter feeds, and encouragement to develop their own local brands.

Everyone in the channel is starting to understand the potential of group collaboration - as opposed to vendor domination of the sales conversation. Channel Communities (long a buzz word) have formed in places like Yahoo, Google, LinkedIn, and even Facebook as a way to provide information, networking, and even sales support to small groups of like-minded professionals. Now these early virtual communities are shifting to newer, more specialized (and secure) platforms like Xeequa and Partnerpedia that provide more social networking functionality and easier collaboration.

These virtual Channel Communities are becoming the natural replacements for partner portals, but with all the benefits associated with "groupthink," as opposed to vendor controlled knowledge transfer. Next Generation partner marketing is collaborative, responsive, and focused on the needs of the reseller and customer, not just on the fastest way to win the deal.

The next two years are shaping up to be a period of experimentation and radical change. There will be winners and losers. The keys to success will be speed, flexibility, reaction time, and the willingness to make mistakes. Going into 2009, all major vendors already have a social media strategy and most have begun using next generation communications tools with their channel partners. Communities and electronic marketing programs are appearing everywhere. And why not? They are easy to use, cost almost nothing, and, most important, they meet the needs of channel partners and customers better than the outdated marketing programs they are quickly replacing.

The author is Managing Director of Gilwell Group, which provides research, consulting, and enablement services to help organizations measure, manage, and improve partnership productivity through the use and understanding of next generation tools.