If business is war then each deal fought in the channel trenches is part of a much larger contest. Within those battles, a channel rebate is arguably the most critical ammunition that ultimately determines which vendor not only carries the day, but ultimately wins the war.
Not All Chanel Rebate Programs are Created Equal
Most channel partners have relationships with two or more vendors per product category. So it shouldn’t come as a surprise that channel rebates can play a critical role in driving deals to one vendor over another. After all, not all channel rebate programs are created equal. Beyond base rates for achieving revenue or unit goals, there are rebate programs designed to provide incentives for exceeding sales goals, expanding market penetration or increasing attach rates to a sale. Rebates are usually somewhere between three to ten percent of the sale generated. While that may not seem like a large amount of money, a deal valued at $500,000 can easily drive a rebate opportunity valued at somewhere between as little as $15,000 to well over $50,000.
The challenge many channel partners have is that navigating all these programs is a complex endeavor. Too often partners are unaware of what rebate opportunities exist at any particular moment in time. In fact, during a recent Channel Mechanics webinar:
The most challenging aspect of managing channel rebates identified by participants was in providing visibility to channel partners (39%).
Without that awareness, all the time and effort managers spend crafting their channel rebate programs, winds up being for naught.
Worse yet, many partners find the hurdles they need to clear just to claim a channel rebate maddening. This has become a major issue with all too often not a week going by when an IT vendor doesn’t announce they are “simplifying” their channel program. Usually code for streamlining the channel rebate process.
It’s hard to use rebates to try and drive channel partner behavior when your channel partners don’t want to engage.
Every channel manager knows that employing rebates to drive channel partner behavior is critical to success. It’s not uncommon for channel managers to either see an opportunity to exploit a rival’s weakness or find themselves suddenly shut out of a deal because the partner has taken a deal somewhere else. There’s arguably no more helpless a feeling in the channel than knowing deals are moving away from your company because of rebates. And being powerless to immediately do anything about it.
Channel Automation Platform
At Channel Mechanics, we’ve been pondering this issue for some time now. In fact, it kept us up some nights. We designed our channel automation platform to specifically address the friction and clarity issues surrounding rebates that bedevil channel programs. Including:
- The ability to set targets and share achievements in real time
- The ability to execute differentiated rebates
- Pay more on strategic products or sales made in a geographic region
- Simplification of the claim process
That latter capability all too often under-appreciated. Manual data entry processes based on spreadsheets invariably result in errors. Nothing drives a partner or finance team to distraction quite as much as wasting time identifying and fixing rebate errors.
Partners often judge how easy a vendor is to do business with specifically on how frictionless the rebate process is.
Savvy channel managers create an “experiential bias” by simplifying processes such as channel rebate claims to keep partners coming back for more. In fact, in the absence of being able to dynamically apply rebates, most channel organizations are going to find themselves all but defenseless.
We at Channel Mechanics invite you to check out a demo of our channel automation platform. See how effective our platform is to wield rebates to drive business.