Three keys to better channel partnerships

In the hyper-competitive public sector marketplace, deal registration is an important tool used to reward, protect and encourage reseller partners. Unfortunately, public sector partners often find these programs difficult to maintain, making deal registration less effective and leading to friction among government IT partners and manufacturers.

The 2015 State of Public Sector Deal Registration survey from the Government Channel Leadership Council (GCLC) recently polled 120 partners and 100 software and hardware vendors working in the public sector to see if deal registration programs were effective. Many survey respondents reported that registering, submitting, updating, and maintaining deals posed real administrative burdens to partners.

Among specific findings, 39 percent of partners surveyed rated vendor deal registration programs as only moderately clear or well-documented. Almost one in seven (15 percent) found that OEM programs were poor in terms of both clarity and usability. (On the vendor side, not surprisingly, the opinion went the other way. Some 53 percent of those polled said programs were not very complex or not complex at all.)

Some resellers in the study expressed concern that deals may more frequently go to partners with established vendor relationships. Survey respondents estimated that as many as half of OEMs let multiple partners register for the same deal. This practice, some resellers believe, may result in favoritism toward certain partners.

As a result, say OEMs and partners, current deal registration programs in the public sector are only moderately effective. Only one-third of partners said that deal registration eliminates channel conflict most of the time (as opposed to over 50 percent of OEMs). More than half of OEMs reported that unregistered resellers occasionally win sales opportunities despite deal registration protection.

What’s needed in federal channel deal registration, according to both OEMs and partners, is a three-step approach to simplify the process: Improved ease of use; improved program/registration approval; and greater transparency into the approval and rejections process.

Improving ease of use

In the public sector, OEM deal registration has become complicated, time-consuming, and bureaucratic. Partners can be frustrated by the registration process itself, which is typically made more complicated by a long approval process. Deal registration management is important to vendors and partners because other means of compensation are unavailable when selling into government. Consequently, OEMs must be sure that their portals and processes improve how partners learn about benefits and incentives, with self-service tools for partner engagement, and clear communication with account managers.

Improving program consistency

For partners, a deal registration program’s predictability is a key measure of whether an OEM can be trusted. Registration opportunities must be based on clear and consistent rules rather than ad hoc decisions or continually-amended processes. There’s no denying that standardizing deal registration programs in federal IT sales is a complicated task. Still, because federal IT sales often involves complex multi-vendor deals, anything that OEMs can do to make registration easier to manage would be received well in the partner community.

Enforcing greater transparency

The GCLC survey findings underscore a general feeling of mistrust among partners when it comes to OEM deal registration programs. There is some sense that, while important, deal registration in the public sector is essentially flawed.

Two-thirds of partners surveyed believe that unregistered partners often win deals despite active registration programs. That leads some to speculate that resellers can underbid registered partners, making additional deals with OEMs once a contract has been set.

A better approach to recording and approving deals – and some fundamental changes in the way partners and their chief competitors are treated in the process – would go a long way to relieving that attitude of mistrust. Vendors can improve deal registration transparency (and pipeline visibility for partners) by setting clear guidelines for when and how to register deals.

The government market imposes very tight restrictions on channel partner compensation, which makes deal registration far more important in the public sector than the private sector. Because deal registration is one of the only ways that vendors and distributors can reward and encourage partner performance, a better-managed program is essential to maintaining a solid working relationship among OEMs and partners selling to government.
The GCLC 2015 State of Public Sector Deal Registration Report can be downloaded by clicking here.