Is Channel Loyalty Possible in the Cloud?

April 10, 2015 Deb Broderson


In 2015 vendor investments in channel marketing are estimated to come in at 70 billion dollars. Of that, $56 billion will be spent on channel incentives.  Why?  Channel loyalty doesn’t come easy and there are many moving parts to the delivery of a loyal channel organization.  In fact, according to a recent CRN article,  there are six areas that affect channel loyalty. They are:

  1. Strength of brand
  2. Design of product
  3. Breadth of portfolio
  4. Quality of support & enablement
  5. Ease of doing business
  6. Focus on relationships

Does engagement = channel loyalty?

So,  how do you get there?  Start by helping your partners transition to selling in a cloud model or learning how to take advantage of new opportunities are both steps in creating channel loyalty. Moreover, the cloud model has created intense competition as vendors compete for the best Hybrid and Born-in-the-Cloud partners. As a result of the competitive situation among vendors looking to recruit and educate the right partners, investments in on-boarding and training are more critical, which makes channel incentives all the more relevant and necessary- as vendors will want to maximize upfront investments and future earnings by retaining the best partners.

Take this opportunity to reevaluate how you model and design your incentive programs. To build enduring partner loyalty, it begins with strategy – program strategy, sure – but more importantly, business strategy. If you’re program strategy isn’t in alignment with your company’s business strategy, you are more than swimming upstream – simply put, change your strategy or plan now for a major course correction.

Incentive programs are a key relationship strategy for any company, so the worst possible course of action is to create incentives to accomplish tasks that are not in line with your company’s mission, vision, values and goals –The Science of Motivation is far more refined today, so your incentive program should be as well.

It is also time to start requiring partners to generate a specified number of qualified leads in order to maintain top tier status – a metric independent of deals won. Historically, vendors have focused rewards on post sales behavior (closing sales) but that is no longer enough in the cloud, as you have additional subscriptions and renewals to incent. It should come as no surprise that pre-sales and marketing incentives are becoming increasingly more important.

Building channel loyalty

Building loyalty through transformational times is no easy task. The change from a transactional model to a subscription or Cloud model can be difficult. Empowering your partners to be successful in the Cloud will definitively require a new method of incenting partners and their teams. 

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