When everywhere you turn people keep wondering if we’re heading into a recession, we may already be there. Even if we’re not, the uncertainty of the past two years and its vast impact on labor and supply chain are palpable. During a recession, a businesses’ first instinct is typically to cut back, decrease, and minimize as we outlined in this blog. But the fact is, rebates and incentives become that much MORE important during times of economic uncertainty. How you ask? Here are just a few reasons:
- If an entire IT department gets laid off, your channel partners are stepping in to fill the void,
- Incentives like SPIFs go from funding a partners mountain bike or flat-screen TV budget to actually paying the bills,
- No market development funds REALLY means no go to market motion and most importantly,
- Your partners will leave and go work with the companies who provided the right resources, education, enablement, and incentives. You’ll lift your head up in 18 months and have a channel that doesn’t resemble the one you have now.
So what can you do? How do you get through these uncertain times with a robust channel and build loyalty? Here are 5 quick tips:
1. Clean House: It’s time to get rid of any dead weight. Have a group of partners who have sold one deal or maybe never sold a deal who are taking up cycles? Put them in the “referral partner” category and wait until they come to you. Sure, you can send them your monthly newsletter and give them limited access to an ecosystem platform but other than that, “see you when I see you”!
2. Back to School: Now is the perfect time to teach your partners to do more with less. Create a short video series on sales enablement, demand generation, social selling, that teaches them how to leverage free tools or use what they have today. Do you know how much it costs to connect with all your partners current and prospective clients on LinkedIn then post relevant content regularly to stay top of mind? Nothing, zero, zilch, the big goose egg. And yet salespeople are 70% more likely to sell to an existing client than a net new client. Teach them to fish!
3. Shift the SPIF: Say that ten times fast! Instead of just incentivizing the sale, help partners do things that build relationships. The sales cycle may be a bit longer as people get more cautious with their budgets which means the salesperson who engages the prospect, listens to their challenges, is more consultative, is the salesperson who is going to win in the end. Also, richer SPIFs ensure your partners lead with your solution, not your competition. Ever tried renegotiating your margins internally? Could take years. SPIFs on the other hand, easy to lean on it then back off when things shift!
4. Rebates Matters: Rebates are particularly helpful in a recession as they allow you to adjust to market pressures only after a deal is closed, avoiding price erosion, and margin loss. Partners value rebates and incentives more during financially difficult times and will remember who enabled their success (partners work with 5-25 vendors all vying for mindshare.)
5. Make More Sense of your MDF: We get frustrated when Marketing Development Funds (MDF) are used to cast a wide net then only get one lead…or more likely, zero leads. Make more sense of funnel filling activities and leverage ABM like digital advertising, LinkedIn ads, and SEO/SEM. Also, provide funds for more middle of the funnel activities as opposed to top of the funnel to ensure deals are accelerated and closed like demo equipment, trials, proof-of-concept, and video case studies/testimonials.
Bottom line? Now is the time to invest in your partners to ensure they’re doing business with you instead of your competition in a year or two. Want more information? Learn how to design and execute effective programs that drive channel growth and deliver ROI.