Special Features

The Cloud And Managed Services: The Incentive Impact

Industry shifts and market changes — such as the continued shift to cloud operations and managed services — also are motivating vendors to rethink their incentive strategies.

Rather than implementing short-term initiatives, organizations are honing in on more long-term, loyalty-generating strategies that will contribute to yearly lead gen and sales goals.

“The advent of the cloud probably has the most impact on incentives because the way end-users are buying is changing,” Craig DeWolf, VP of Client Services for hawkeye Channel told Channel Marketer Report.

“The cloud — or ‘managed services’ in the broadest sense — is changing the way incentive programs are designed because of that more long-term subscription model,” DeWolf added. “Overall, organizations are going to see short-term incentives, either monthly or quarterly, are going to be less effective, and are going to shift to long-term incentive programs.”  

In fact, 63% of IT firms will focus on establishing cloud-based delivery models within the next year, according to research from CompTIA. Moreover, nearly half (46%) of companies are moving to a managed services model, while 39% are transitioning from transaction-based product sales to recurring revenue models.

Additionally, vendors will no longer solely incent partners in return for hard sales, DeWolf explained. Instead, organizations will encourage and reward for soft activities, such as technical training or certifications, which contribute to long-term goals more effectively.

Focusing on garnering long-term loyalty, vendors and suppliers can develop programs that reward partners for achieving specific goals that contribute to a larger end result. Additionally, organizations must be more willing to provide rewards and funds for specific marketing campaigns and go-to-market strategies.

For example, organizations across the channel are implementing point-based loyalty programs, which allow partners to draw from a cohesive list of options for marketing campaigns and strategies, be it multi-touch programs, content development, or presence at live events and conference. 

“A point-based system is in line with the goals of long-term programs, similar to the strategies airlines use with their loyalty initiatives,” DeWolf said. “Individuals can save up points for specific items or campaigns, which pushes them to move to the next level. The same process works for organizations, but points aren’t supplied to a catalog of stuff. Rather, points can be redeemed for dollars, or other investments such as additional MDF and training, which goes back into the company.”




About Alicia Fiorletta

Alicia Fiorletta is Senior Editor for Channel Marketer Report. Working closely with industry analysts and experts, Alicia reports on the latest news, technologies, case studies and trends coming to forefront in the channel marketing world. With a focus on emerging marketing strategies, including social, mobile and content for demand, Alicia hones in on new ways for organizations to market to and through their partner networks. Through her work with G3 Communications, Alicia also acts as Associate Editor for Retail TouchPoints, a digital publishing network focused on the customer-facing area of the retail industry.

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