Resurgence of SPIFs and Rebates in Global Channels...and the incentive strategy around it

CCI presents a live webinar:

The Resurgence of SPIFs

and Rebates in

Global Channels

…and the incentive strategy around it

Presented by

Chris Becwar and Steven Kellam

415.427.5100 www.channelmanagement.com [email protected]

Agenda

Part 1: Background: Incentives and the evolving channel

Part 2: The resurgence of incentives – what’s driving it?

Part 3: Incentive 101: Definitions, execution & measurement

Part 4: Recap & summary


• More vendors competing for their attention

• More complex products to sell, technologies to learn

• Trying to adapt to new revenue models

• More business skills asked of them

• Less one-time revenue per customer means need for more customers

• Suspicious of ‘direct threat’ by vendors

Getting Partners’ Attention Isn’t Getting Easier


Why Incentives? Think Pavlov

• Immediate rewards drive behavior the best

• Targeted. Reinforce the exact behaviors you desire

• Great for driving change from one way of behaving to another


Concerns and Confusion Around SPIF and Rebate Programs

Partners keep asking where they stand on

their reward

Different partners and geos require different

approaches

Will adding more SPIF campaigns

mean more campaign setup

fees?

Program viewed as

entitlement

Can’t stand up new programs fast enough

Contra or OPEX accounting? US dollars

or multi-currency?


A Sea of Different Programs – What’s Right?

SPIF

SPIFF

Volume Incentives

End User Rebates

Loyalty Program

Discounts

Rebates

Deal Reg

Soft Skill Rewards

MDF/Co-op

Activity Based

Referral Rewards

Growth Rebate

Sales Contest

Tiered Program

?

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? ?

Why CCI Understands SPIF and Rebate Programs


Comprehensive Global Solutions

Distributor Reseller Sales Rep Consumer

Co-op/MDF

Streamline management of joint marketing programs

Marketing Planner

Plan marketing programs, forecast and measure ROI

SPIF & Rebates

Run short- and long-term incentive and loyalty programs

Trade In Rewards

Manage incentive programs requiring physical return of goods

Opportunity Management

Deal Registration, Lead Management, Referral Rewards and Special Pricing


CCI Clients

http://www.avaya.com/cc/common/index.jhtml;jsessionid=CJT2GRGGH5U2NWAZ4QLCFFI


Strategic Partners

Below is a list of ‘best in class’ organizations CCI has worked and/or partnered with.

Salesforce.com – Customer and Partner Relationship Management

Relayware – Partner Relationship Management

Elastic Digital – Channel Marketing Automation

Zift Solutions – Channel Marketing Automation

Averetek – Partner Marketing Portals/Marketing Content Management

PureChannelApps– Social media syndication

Channel Eyes – Mobility Solutions

Saepio – Partner Marketing Portals/Adbuilder/Marketing Content Management

Zyme – POS data ”cleansing” and analytics


Professional Services At Every Step

• Program Design

• Program Development

• Program Evolution

Complete Incentive Solutions

Highly Configurable SaaS Application

• ROI Metrics

• Multi-currency/lingual

• Fund allocation

• New fund set up

• Approval workflows

• Partner and Activity – add, deletes, changes

• Email alerts

Program Management

• Available follow-the-sun support

• Claim administration

• Payments

• Program administration

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Resurgence of Incentives What’s Going On?

Three Key Factors


3 Key Factors

1. Increasing Competition for Partner Mindshare

2. Mounting Pressure to Demonstrate ROI

3. The Need to Drive Partner Evolution

Resurgence Factor 1:

Increasing Competition for Partner Mindshare


Channel Worlds Are Converging

Software – Fundamental shift to cloud and subscription models. Going mobile.

Telecoms and Cable Companies – Expansion of offerings to software, M2M, and virtualization

Hardware – Expansion to bundled service and software packages


Channel Mix

Direct Corporate

reseller

Distributor

VAR Retailer


Channel Evolution and Mix

Direct Corporate

reseller

Distributor

VAR Retailer

ISVs

System Integrators

Direct Marketers

MSPs

Hosting/ Infrastructure

OEM

Solution Providers


Channel Evolution and Mix

Direct Corporate

reseller

Distributor

VAR Retailer

ISVs

Cloud Agents

System Integrators

Direct Marketers

MSPs

Hosting/ Infrastructure

OEM

Solution Providers


How SPIFs and Rebates Are Helping

• Point directly to key sales influencers

• Keep you top of mind with multi-tasking partners

• Allow emphasis on desired actions more than past performance

• Level the playing field for Tier 2 and 3 partners


Mounting Pressure to Connect Spend to Revenue


Drive for Efficiency

• Economic downturns breed efficiency mindset at the top

• Channel spend under the microscope – must prove ROI

• MDF – what was our return?

• SPIFs and Rebates – correlate directly to desired actions


The Need to Drive Partner Evolution


Cloudy Channels Will Be Different

• Resellers

o Levelling the playing field for smaller resellers o Selling new vs. protecting legacy business

• XSP (ISP, MSP, etc.)

o Billing models and systems already in place

o Adding cloud to their portfolios

• Pure play cloud resellers / specialist teams / new

brands

• More sales agents – referral partners, creating opps for vendors to fulfil


More Rewarding ‘Soft Targets’ Beyond Revenue

If you want to encourage a new way of behaving, reward the new behavior! Points-based approaches allow you to reinforce things like:

• Lead/Referral Submittal

• Execution of key marketing campaigns

• Training & certification attainment

• New logo opportunities opened, close rate on registered deals

Making Sense of the Options

The Incentive Landscape


Definitions

SPIF

• A SPIF (sales performance incentive fund) is a financial incentive that encourages a sales representative to sell a specific item or group of items.

• Often used by vendors and employers to introduce new products to the market, or increase sales within a specific time frame.

• Can be a cash bonus or a prize, such as a vacation, car, or club membership.

• SPIFs are paid directly or indirectly from the manufacturer for selling product

Rebate

• A rebate is a form of price reduction on a product that has already been purchased.

• Used to encourage customers to make a purchase.

• Rebates are paid for purchasing a product directly or indirectly from the manufacturer, vs. selling product.


Incentive Programs Targeted to the Individual

Title Definition Attributes

SPIF

• Stands for ‘Sales Performance Incentive Fund’

• Provides guaranteed rewards for participants (e.g. sell “X” get “$Y”)

• Usually short-term • May be quickly deployed • Requires re-launch of every program • Can tailor for different audiences (SEs/SRs) • Difficulty forecasting payout

Loyalty • Designed to build long-term mindshare and relationship

• May be designed to reward a variety of behaviors

• Rewards are often accumulative in nature • Longer plan cycle • More robust infrastructure required • Can “follow” participant

Contest • Rewards based on chance (won vs. earned)

• Subject to local laws • Good for driving mindshare, individual

/team motivation/excitement • Short- or long-term

Rebate • Drive product sales through temporary price decreases

• gather consumer info, promote new products

• ‘Instant’ or ‘mail-in’ most common • Short-term • Trade-In or Trade-Up program (rebate may

go to partner or consumer)


Title Definition Attributes

Sales Performance Reward

• Reward for hitting certain pre-arranged sales goals

• Quarterly, semi-annual or annual • Different payouts for meeting/beating

quota • By partner or partner tier

Growth / Stretch Goal Rewards

• Designed to encourage growth, or stretch beyond committed sales targets or ‘normal’ performance

• Monthly, quarterly or annual • Typically tied to MoM, QoQ or YoY $

improvements, # new accounts, # new opportunities, # new products/solutions, # upsales, etc.

Value Rebate • Reward to achieving certain pre-arranged ‘soft’ goals (customer sat score averages, solution specializations or certifications)

• Targeted at activities/skills vs. final results • Often overlay on top of other

reward/rebate offerings

Volume Rebate

• Reward for hitting sales volume targets

• Quarterly or annual • % rebate(s) of sales volume, typically higher

% for higher volumes

Incentive Programs Targeted to the Entity


Incentive Program Influence

Pre-Sale (Enablement/Influence)

Post-Sale (Reward/Recognition)

MDF/Joint Marketing Planning

Deal Registration

Lead Management

Referral Rewards

Special Pricing

SPIF/Rebates

Co-op Programs

Trade-in Programs


Incentive Program Influence

Pre-Sale (Enablement/Influence)

Post-Sale (Reward/Recognition)

MDF/Joint Marketing Planning

Deal Registration

Lead Management

Referral Rewards

Special Pricing

Co-op Programs

Trade-in Programs

SPIF/Rebates

Strategy & Design

Five Steps to Success


First: Determine Your Objective(s)

Quantitative Goals Revenue, profit, unit sales, average order size, sales/revenue target for products?

Qualitative Goals Skills/knowledge improvements, customer sat improvement, partner loyalty to your brand?

Timeframe This year, quarter, ongoing?

Your Objective

Corporate

Sales/ Marketing/

Channel Strategy

Customer

Purchase Process

Environment

Competition Geography

Partner

Go-to-Market Strategy


Second: Determine Behaviors and Key Contributors

What key behaviors do you need to drive? What partners exhibit those?

What barriers exist? Level of trust with partner orgs? Your share of wallet with partner orgs?

Increased # of new prospect meetings booked? Ongoing, superior customer service?

Visibility/engagement with individuals at partner org? Willingness of orgs to let you engage?

Speed of lead follow up? Promotion of particular product or brand?


Third: Determine Type and/or Mix of Programs

Meeting or Beating Quota

Improved consultative selling skills

Sales of Product Model “X” Before

Release of Model “Y”

Influence End-user to try new Product

Increasing % of new solution sales

Targeted Behavior Program Type

SPR/Rebate

SPIF

Loyalty and/or Value

Trade-Up/Trade-In

Growth/Stretch Goals


Fourth: Determine Best Reward Structure to Drive Results

Title Pros Cons

Cash • Directly impacts bottom line • Good for short-term programs

with limited infrastructure requirements

• Easy to communicate

• May have limitations in global markets

• May be considered part of regular comp, less long lasting impact

Reward Cards • Reloadable cards are ideal for long-term programs

• Fixed value are more suited for short-term programs

• Offered by majors: VISA, MC, AX and are valid anywhere they are

• General high appeal due to branded card in-wallet

• Infrastructure more costly due to card printing and distribution costs

• Global Programs may have limitations due to limited distribution and/or exchange rates

Travel/ Merchandise

• Trophy/Lifestyle value of prizes

• Allows program managers to create “tiers” that create a stretch goal for participants

• Can have longer mindshare impact for participants

• Program’s appeal is largely driven by reward options and perceived attainment ability

• Global programs may have limitations due to distribution or local tax codes

• What is the ‘do/get’ proposition?

• Evaluate in relation to main comp structure – high enough for interest, not so high as to distract from primary goals

• Do the math - your investment to your return


Fifth: Determine Your Metrics to Measure Success

• Baseline - what is the current state?

• Key Performance Indicators - How are they defined? What are the strategic metrics (program level) vs. tactical metrics (operational level)?

• Data Sources - What sources of data will be needed to measure these? How will this influence systems/processes?


Best Practices for Designing a Program that Gets Results

1. Use the 4-Step Process

• Start with objectives

• Then behaviors/contributors

• Then program mix

• Lastly rewards

2. Target key elements of the demand chain

• Consider role of entities and individuals

• focus on influencing the behaviors that make the most difference

• Address barriers (principals may be “gatekeepers”)

3. Keep it simple SPIFers

• KISS applies – especially at individual contributor level

• Guidelines should answer for individual or organization clearly: “What do you want?” “What do I do?” “What do I get?”

4. Determine how you’ll measure success at the outset

• You can’t measure what you don’t collect or have data for

Execution & Measurement

Optimizing Execution for Program ROI


Key Components for Program Execution

Communication strategy

• Pre-launch

• Launch

• During program lifecycle

Program Operations

• Registration

• Earning & claiming processes

• Rewards issuance

Measurement & ROI

• Tactical metrics capture

• Reporting


Your Communication Strategy Should Have Three Parts

1. Pre-Launch Communication GOAL: pre-test program and communication to fine tune

• Review/get feedback from key partners or partner council • Pilot with a particular partner audience

2. Launch GOAL: make ‘do-get’ proposition clear, generate program enthusiasm

• ‘Roadshow’ program via in-person or webinar format • Print & online promotion (email, newsletter, poster, etc.) • Guidelines, FAQ, Quick Reference Guides, etc. available on program site

3. Program Lifecycle

GOAL: ongoing education & maintaining mindshare • Monthly emails (reminder, case studies, tips, distance from goal) • SPIF overlays (as appropriate)

• Dashboards/Reporting to track individual & team progress


Key Variables of Program Operations

Registration Process

• Registration Requirements

Claiming/Earning Process

• Claim based or back end data

• Data/metrics capture

Program Support

• User support

• Auditing

Issuing of Rewards

• Fulfillment process


Measuring ROI

• Standardized data capture at both the tactical & business outcome levels

• Claim should capture ‘total deal value’ vs. only specific SPIF related sale

• Assure one ‘version of the truth’ by making sure ‘cleansed’ POS data is viewable to all.

• Reports should cover Program, Partner & Individual level performance info against your metrics


Five Best Practices for Optimal Program Execution

1. Pre-test if possible, or at least preview

• Understand Program appeal to all audiences

• Evaluate administrative processes

• Help forecast outcome, and fine tune before broader launch

2. Include registration at start whenever possible

• Provides an early indication of program popularity

• Capture profile information about participants on the form

• Can be further automated if participants already in your PRM


5 Best Practices for Optimal Program Execution

3. Take an incentive platform approach

• Leverage single infrastructure for multiple programs

• Reduce admin costs through automation & outsourcing operations

• Gather performance data on participants over time

4. Communicate, Communicate, Communicate

• Building awareness takes time

• Share success stories, progress against goal

• Keep it fresh to maintain excitement

5. Remember, Recognition Is as Important as Reward

• Elevates success of top performers

• Sets benchmark to share

• Doesn’t need to be costly

• Establishes case study and best practices

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Thank You!

Chris Becwar [email protected]

Steven Kellam [email protected]

Resurgence of SPIFs and Rebates in Global Channels...and the incentive strategy around it

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