Partner Program Tiering: Just A Flesh Wound

This opinion piece might shock you in a number of ways. It has some fighting and blood in it. I’ll warn you when that’s coming and you can avert your eyes if you like. I’ll also tell you that in three years’ time most partner programs won’t have tiering or program levels. That’s a bit shocking too, for people who run partner programs.

B2C TO B2B

This is about tiering in partner programs. If you have a partner program, then you’ve most likely got tiering, silver, gold, platinum levels, or whatever. That’s how you do it, right? We all learnt to do it that way. That’s how consumer incentive programs work, so it must be good? If I stay enough times at Holiday Inn then I get to be Elite, Platinum, or whatever.

Sure, there are a lot of things the B2B technology community can learn from the B2C world, but let’s be careful. It’s not all quite as obvious as it seems. Let’s not confuse personal incentive programs with sophisticated partner ecosystems. Personal incentive programs are about buyer loyalty. Partner ecosystems are about value exchange. We’ll come back to that later.

BLACK KNIGHT

Are you wondering why the title is ‘Just a Flesh Wound’? It’s a quote from a great film, Monty Python and the Holy Grail. You might want to watch this clip on Youtube. If you’re afraid of blood you might not want to watch it. That’s the warning I mentioned earlier. Up to you.

In the film, King Arthur arrives at a small creek, and his way is blocked by the Black Knight who “moves for no man”. That means hand to hand sword combat.

The upshot is that King Arthur cuts of first one arm of the Black Knight, then the other, then his legs. And right through it the Black Knight is saying, "It’s just a flesh wound, fight on!" until the Black Knight has no legs and arms, and asks to call it a tie.

Let’s say your partner tiering is like the Black Knight. It’s had so many mortal wounds, and yet amazingly it wants to fight on.

COOL TIERING

Tiered partner programs were pretty cool around fifteen years ago. That’s when we used to look up phone numbers in a phone book, and rent DVD’s at Blockbuster to watch in the evening. Blockbuster went out of business in 2010.

It really made a lot of sense. You segment partners based on how much they buy from you, and you reward the ones that buy more, just like the Holiday Inn rewards program. Until someone realised that many of the most important partners in the channel ecosystem don’t buy anything from you. We’ll come back to that.

You give the levels names, like the Holiday Inn program, and bingo, you have a channel program. Simple!

Except it got complicated. This is where the Black Knight comes in. Sometime around 2005 large technology vendors began to realise that selling more is not enough. That could have killed the tiering model, but it was only a flesh wound. The tiering model could fight on with only one arm.

ENTER ‘SPECIALISATIONS’

Ok, I don’t sell a lot of database software, but that’s because I’m a security specialist. How do I fit in the tiering? If this is revenue based, then I’ll never get to be platinum.

Just a flesh wound. We introduced tiering levels by technology specialisation. Microsoft pioneered this and ended up with ten or so technology specialisations in their program. You had vendors where a partner could be gold, but platinum in a specialisation, and you ended up with some amusing stuff about how many specialisation track elite levels you had to achieve before you achieved overall elite level in the broader program. What if I only achieved elite in the specialisation in one region, could I have it globally? We enjoyed a good deal of time in meetings sorting that out.

That produced the points program, which was cool about ten years ago. Award points for revenue, and for specialisations, and points define level in program, gold, platinum, and so on. The tiered model can fight on.

ENTER ‘TRACKS’

This is when the other arm got chopped off the Black Knight. We noticed that there were channel partners called ‘influencers’ who didn’t sell a whole lot of any of our solutions, but they mattered a great deal when it came to driving customer deals. These are named consultants, developers, services specialists. This is the end of the tiered partner program, right?

Oh no, just a flesh wound. Here come program tracks. You can be in the program in the resell track, or the developer track, or as a consultant.

If you’ve been in the channel a while you’ll remember the wonderful whiteboard picture with multiple pyramids, each pyramid represents a track and has tiering. Technology specialisations map across it all in a different colour.

It sort of made sense in the moment, but just remind me what type of partner the green box on the fourth pyramid represents? Be sure to ask channel marketing to make it simple when they explain it to partners.

NO LEGS

Then the legs came off the Black Knight. We realised that vertical industry specialisations, like retail or banking, are critical for developers and consultants, perhaps more so than technology specialisations. Even worse, partners now work in an ecosystem with each other, so customer deals can’t just get referred to the platinum partner in region. Then customer experience enters the mix, with many partner programs starting to measure partners based on delivery track record with end customers.

You’d think the Black Knight would give up the fight at this point, but somehow he fights on. King Arthur has crossed the creek a long time ago, and disappeared up the path, but the tiered partner program is hanging in there. Just a flesh wound!

B2C TO B2B, AGAIN

The fact is that tiered partner programs stopped being cool some years ago, and they stopped being relevant too. Time to accept defeat and move on.

Where do we look to understand what will replace the tiered partner program? The answer, weirdly, is B2C. After saying earlier not to jump to the conclusion that everything in B2C can be mapped to B2B … in this case we can learn from B2C.

Here’s Farrell Hudzik, Managing Director of Accenture Interactive’s Global Loyalty and Rewards practice talking B2C on cmo.com:

“The end consumer is going to have more and more control over how they define loyalty, more so than the brands that they interact with. We’ll eventually get to a point where consumers say, “Look, I don't want to be tied to only one brand; I want to have an ecosystem of interaction,” and I think that brands will start to engage in a model where they provide this ultimate flexibility of currency, while figuring out how to leverage data, how to be better at analytics, and how to maintain their brand presence within those consumers' lives by creating better and new ways to interact beyond the traditional kind of points-and-currency ecosystem.”

This on B2C loyalty programs from qcustomer.com:

“Get rid of all the cards, and membership numbers and outwardly facing tiers and reward packages. It’s time to have a mature relationship with your customers, not the one you have with your kids to get them to eat vegetables. Brands need to be following customers constantly, hearing from them, trying different engagement approaches, new products, revenue models. Agility and finger-on-the-pulse trumps everything. The only way companies can do that is to segment and find similarities, and more realistically, focus on the most loyal or most likely to be loyal ones.”

Partner programs of the future look like this:

• No outward tiering or levels. An even playing field with fluid movement of partners from one category to another. One day influencer, next day reseller, then developer.

• Partner reward based on vendor commitment, role in sale and end customer experience. Greatest reward to most loyal. Custom value exchange based on partner profile.

• Inward segmentation (not public tiering) of partners based on business model. So groups of partners with a similar role in the ecosystem are engaged and rewarded the same way.

Don’t believe it? Go look at the new Salesforce ISV program here.

The Black Knight is dead. Move on.

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