Typically speaking, these partners are smaller, regionally or locally-based solution providers who focus their business exclusively on your target market. They may also be companies who have no intention or desire to resell your products, simply because their business is focused on consulting and other professional services. This in no way means that they do not like your product(s), on the contrary, they refer business to you on a regular-basis, and want to work and engage closely with you. They would like to have a partner manager within your organization to work with, hanker to receive training and technical support, and want access to technical documentation and tools. Sounds like a win-win relationship, doesn’t it? But what if your partner program rewards partners for their revenue performance and for having achieved all your technical certification requirements? There is no way you can quantify the value of the former lot of partners as well as the value they bring to your company. Within your you would have difficulty justifying the expense of providing high value benefits to partners that do represent substantial revenue to the company.

Is there a solution to the above problem? The answer is yes, and it lies with the value-based partner program.

Value-based partner programs recognize partners for the full value they bring to the relationship. There is no doubt that a partner's revenue performance is an important metric in a value-based model, but it is just as vital to note that it is not the only metric in determining a partner's place in your program.

Ideally, a value program recognizes partners not only for resale revenue, but also for influencing revenue. To accomplish this, it is necessary to create a viable process for measuring influence revenue within your company. Some companies accomplish this by tying their deal registration system to their partner revenue tracking system for deals that close. The channel that fulfills the order, either the partner, direct sales representative, or fulfillment partner, is not the only party that receives credit for the order. Fairly, the partner that provides significant influence in the deal is also recognized for their efforts.

Looking beyond revenue performance and influenced revenue, value-based partner programs also recognize partners for achieving other activities that bring value to the vendor. A value program should be designed so that it motivates and rewards partners for performing activities that the vendor considers valuable. These desired partner behaviors could include:

• Skill and expertise with the vendor’s technologies and products
• Ability to achieve customer satisfaction
• Ability to create and execute demand generation campaigns
• Actively engaging in marketing activities for example, product launches, user awareness seminars, conferences, joint customer success stories and so on.

For many years, companies have been creating technical and sales certification programs to assess proficiency with a given product or product line. Technical certification programs were originally created by vendors to provide recognition to end-users and employees for demonstrating product knowledge and expertise. Then, partner program designers started leveraging these technical certification programs by requiring partners to have certain numbers of certified employees on staff in order to achieve the mid and upper tiers within their partner program. This was a first step toward value-based partner programs.

However, unfortunately, there were at that time and still remain today, a number of issues associated with this approach.

Technical certification programs generally focus on how to use a vendor's product rather than the technical knowledge and expertise needed to sell and implement the vendor's product. More often than not, partners must take their pre-sales engineer out of the field for a 2-5 day training course to prepare for the certification test. The knowledge and skills the pre-sales engineer acquires from the course are only helpful in passing the certification test but they do not generally enhance the engineer's ability to represent and sell the vendor's product. The primary benefit to the partner in having certified pre-sales engineers on staff is to achieve a higher level in the vendor's program. The whole problem with this is that typically, there is not much inherent value in the certification process because it is end-user focused rather than partner focused. If vendors designed technical certification programs to specifically test the skills needed to sell the vendor's products, for example, understanding the key technical benefits of the product, knowing how to install and configure the product, how to effectively demonstrate a product, and how the product integrates with other products in a typical configuration, then partners would receive much better ROI for their investment in technical certification.

In contrast, sales certification programs tend to be more partner focused. These programs are normally created for a company's own salespeople and for its partners, and focus on the individual's knowledge of product benefits, target markets, key selling points, and how to qualify sales opportunities. Training to prepare for sales certification tests is normally self-paced and accessible online. The main issue with most sales certification programs is that testing in many instances is self-administered, with no verification by the vendor that the individual possesses the desired knowledge and has actually passed the test. Many vendors and their partners do not take sales certification seriously. Hence, sales certification requirements are sometimes overlooked by vendors as long as the partner has achieved the revenue and technical certification requirements for the program tier.

This is unfortunate because sales certifications are also a very valuable tool.

Value-based partner programs solve these issues by measuring a number of metrics to obtain a complete, holistic view of the value the partner brings to the relationship.

They provide a fair, unbiased method for measuring all partners. Partners receive the same recognition for influence revenue as for resale revenue because both activities bring value to the vendor.

Value programs usually include a "points" model that is used to determine a partner's level in the program. This simply means that a point value is assigned for each partner activity that the vendor deems as delivering value in the relationship. These point values may vary by activity to convey the relative value of the activity to the vendor. For example, a partner may receive more points for executing an email campaign to generate demand for a solution that includes the vendor's product than they do for participating in the vendor's booth at a trade show.

Partners earn points for executing each different activity and the points are then totaled. The partner program structure defines the point requirements for each level in the partner program. This model is easy for partners to understand and provides them with the ability to create a plan for achieving the next higher program level. By reviewing the "points" model, knowing their current point total, and having an in-depth understanding of their business, a partner can easily determine a realistic path for reaching the next program level. In addition to point totals, vendors may have additional requirements in order to achieve certain levels in their program. Requiring a partner to create an annual business plan, assign a primary contact for the relationship, and engage in regular business reviews are some examples of additional program requirements.

Most value programs include a metric called a competency. Competencies describe the unique specialties and specific values provided by the vendor's partners. They define a partner's area of specialization based on their business model and position the partner's skills with the vendor and with customers. Partners qualify for competencies based on technical depth and business expertise, regardless of their organization size or the market segments they serve. Competencies can be focused on expertise with specific products or product families; market segments including markets that the vendor is trying to penetrate; or the vendor's strategic initiatives.

Competencies tend to carry significant point values, making them a valuable tool for partners who work to gain the skills needed to qualify for them. Each competency normally has a unique set of requirements that could include technical and/or sales certification, customer references for a specific type of solution implemented by the partner, or experience with selling solutions to a specific target market like the government or academic market.

In a value-based partner program, the partner type is much less important than the partner's level in the program. These program benefits are segmented by level and not by partner type. This is a much fairer model especially since partners today tend to come in all shapes and sizes. Many have truly unique business models, which makes it very difficult to fit them into one distinct partner category. In fact, some value-based programs have no concept of a partner type. It does away with what some consider as ‘the stereotyping of a partner’.

It makes it simple because a partner is simply that − a partner − rather than being a channel, developer, alliance, or other type of partner.

There are of course, value programs that include partner types. Here, the partner selects the partner type that best describes his business and the nature of the relationship with the vendor. This means that a top tier partner has access to all top tier benefits, mid-tier partners have access to mid-tier benefits, and so on. However, in reality the partner will only make use of the benefits that make sense for his business. This approach gives the partner the ability to tailor the program to fit his needs, in all aspects of his business. In most programs today the vendor dictates which benefits the partner has access to, based solely on one aspect of the partner's business with no consideration for the rest of his business. This can be very frustrating for the partner because he may need to foster a separate partnership with the vendor to address another aspect of his business model, rather than having the ability to leverage a single relationship that recognizes all of his business capabilities.

Value programs are the future of the channel scene. Several leading technology vendors have implemented them already, some are in the process of designing their programs, and many others are considering them.

It really is worth-it to take some time to analyze and reflect on value-based programs. Start off by asking yourself these key questions: Is your company struggling to recognize and reward your best partners who bring the most value despite their size and partner status? If the answer is yes, then maybe it is time you seriously consider implementing a value-based partner program. ◊