Tiered partner programs are a proven channel management strategy for identifying top performers and prioritizing resource investments to nurture the most productive and strategic partner relationships. But there are a range of commitments on both the vendor and partner side, and it can be a big lift to make sure that your partners comply with tiering requirements for training, certifications, sales, and so forth. Tracking such activity often requires manually logging and mapping data to tier requirements – a giant, time-consuming task when applied to hundreds or even thousands of partners.

Let’s take a look at how tiered partner program models are structured, why tiering compliance is important for the success of your indirect sales channel, and how you can better ensure compliance in your partner program.

What is a Tiered Partner Program?

A tiered partner program segments partners into levels of engagement and performance, with each tier carrying a set of qualification criteria and associated benefits. While the industry trends are changing, the most well-known version of a tiered partner program is to assign “metal” levels, such as bronze, silver, gold, and platinum. Partners in the bronze category typically aren’t high-performers and only receive basic program benefits, but as they climb up the tiers on their way to platinum, they get commensurately greater benefits.

What benefits and resources do programs include in these tiers? Perks can vary widely based on a program’s maturity level and size. Most commonly, tiered programs include the following elements, though there are no limits to the benefits a creative vendor can include in their program:

  • Partner service and support levels
  • Marketing tools, campaigns, and collateral
  • Sales and technical training/certifications and similar enablement resources
  • Rebates and margins
  • Market development funds (MDF) and business development funds (BDF)
  • Partner awards

Partners typically graduate from one tier to another by meeting incremental revenue thresholds and/or specific training criteria. For example, a program may require a silver-tier partner to sell $500,000 in monthly recurring revenue (MRR) of supplier services and have at least five members of staff certified in both technical and sales training. The next threshold for a gold-tier partner may require selling a higher MRR number and more staff certifications.

On the training and certification end of things, partners may need to acquire the right skills and learn the right processes to deploy or sell the vendor solution, and these requirements may increase the more comprehensive the solution is. For example, selling complex IT infrastructure may require a partner to regularly recertify for both sales and technical certifications every quarter in addition to established revenue attainment goals. However, a vendor selling a SaaS solution may only require regular recertification on sales training and revenue production.

Partner programs also might base tiers on partner type. For instance, a white-label reseller of hosted PBX services usually has to meet higher revenue thresholds than sales agents or referral partners. Why? It makes sense if you break it down.

White label or wholesale programs generally require more investment from the onset of the relationship in the form of communication and integration between organizations from both the vendor and the partner. A key reason for this is that new installations, service requests, and support issues have to appear to the end customer to be resolved by the partner’s staff while often actually being addressed by the hidden wholesale vendor.

Conversely, sales agents and their suppliers don’t have to carefully integrate organizations to service their joint end customers and can often be more explicitly transparent about how and whom is solving a problem; the sales agent simply informs the upstream provider that the service is having issues and responds to the end customer letting them know the vendor is addressing the issue.

The partner in wholesale arrangements is nearly always managing an ongoing relationship with the end customer, whereas a sales agent or referral partner might have a limited series of interactions with the customer pre-sale and ending at the point-of-sale.

A partner program targeting both channels has to set up two completely different program models to serve these two partner types and the adjust their requirements and benefits accordingly. Not an easy ask.

Today’s partner programs have the added challenge of supporting a holistic partner ecosystem encompassing various partner types – not all of them transactional. Some are influencer or retention partners, for instance.  Within each of these buckets are many different types of partners. Each partner type requires its own programmatic needs, which makes tracking and compliance exponentially harder for channel leaders. The different partner types within a partner ecosystem can include:

  • Retention Channels – Retention partners are responsible for helping to retain the use of a tech vendor solution by proxy through the delivery of the partner company’s services
  • Influencer Partners – Influencer partners within a partner ecosystem are responsible for “influencing” the decision-making of an end customer to purchase a vendor solution but are not directly involved in the transaction
  • Technology Members – Also known as an integration partnership, a technology alliance partnership is the partnering company’s products integrated to deliver additional value to the customer. Companies pursue technology partnerships if their platforms benefit from the additional capabilities and features of the partners’ solutions.
  • Strategic Alliances – Sometimes referred to as strategic partnerships, strategic alliances align the long-term goals of two or more companies. These are multi-department commitments with clearly articulated goals and investments for both organizations. Companies may enter these partnerships because they have the same end customers or plan to enter a new target vertical with complementary solutions.
  • Business Channel Alliances – A channel alliance is an arrangement where a vendor engages a partner to resell, manage, and deliver the vendor’s product to market. The partner makes money through vendor referral fees, margins, or commissions and by selling complementary services. The vendor benefits from the partners’ existing customer relationships and a faster go-to-market timeline.
  • Transaction & Transaction-Assist Channels – These partnerships facilitate transactions between a vendor and an end customer. Unlike business alliances, these partners only facilitate the purchase in exchange for compensation.

Why Does Partner Program Tiering Compliance Matter?

It’s no good setting up these tiered criteria if you can’t make sure your partners are compliant with them. Trust us, the finance department is going to want to see tiering compliance on paper. Verifying that your partners are in the correct tier is paramount since compensation (e.g., margins, commission rates, bonuses) and resources (e.g., sales and marketing support) are tied to achieving those levels. If a partner doesn’t meet the required qualifications, then you risk spending more to support that partner than you projected to receive in return. Applied across your entire partner base, it’s easy to see how this imbalance can add up, reducing the ROI on your partner program.

How do Partner Programs Ensure Tiering Compliance?

Tiering compliance grows in complexity as you add partners in number and type. While you’re welcome to try, you’ll soon find that spreadsheets are insufficient to track the number of variables you need to stay on top of; automation combined with a programmatic process can help you scale and deliver better results. Here are a few ways to apply a combination of people, processes, and technology to your compliance program:

  • Streamline Partner Tier Tracking Through Automation – A partner relationship management (PRM) solution is the most valuable tool at your disposal for scaling program elements, including tier compliance and management. The PRM can segment data from each partner to help determine which tier they fall into with minimal manual data entry from your staff. ZiftONE, for instance, comes with a Partner Groups functionality that enables sending key messages, campaigns, and collaterals to specific segments, including filtering by partner tier. The PRM stops your team from manually reviewing spreadsheets and comparing partner data to established program tier requirements. Now they’ll get time to create a comprehensive plan to move a strategic partner to the next tier and get a higher ROI from the engagement.
  • Incorporate Tier Status in To-Partner Communications – Nothing should ever be a surprise to your partners, especially a change in tiers. Make a partner’s tier status and actions to reach tier visible on your portal. You could even include it on your portal home screen after login, as it is a key item partner programs are looking for.
  • Discuss Tier Status in QBRs & Check-Ins – Hold quarterly business reviews or regular check-in meetings to ensure strategic partners are on track to meeting goals and setting new targets in the joint partner business plan. An easy way to make sure your key partners are in tiering compliance is to make partner tier status an agenda item in the meeting. And never come to a QBR without doing your homework first. Bring your PRM reports to the call to illustrate the current status and outline specific steps to help them move forward. For example, if a strategic partner in the gold tier is close to reaching the platinum tier, you can suggest actions such as an MDF-eligible campaign that may help them reach the next tier this quarter.
  • Evangelize Partner Successes & Tier Advancement – Recognize your successful partners on win wires and case studies as examples of how to perform well in your program. Win wires can take multiple formats such as a blog, case study or video interview with the partner and detail the partner challenge, vendor solution and results of the implementation. It’s important to communicate what success looks like to partners in lower tiers so that they’re motivated to level up. Plus, this will help newer partners get a better sense of how to apply your solutions to their customers if they happen to be unfamiliar with your types of services. Additionally, providing partner awards for tier advancement will create further public recognition of partner achievement, encouraging competition and ultimately more revenue.

Partner tiering is a proven way to grow revenue from the indirect channel, as it incentivizes a stronger go-to-market partnership. The more your partner invests in your program, the more you invest in them. It’s a virtuous cycle. Make sure that your tiering program delivers that growth you project by ensuring compliance as you scale.

Ready to take the complexity out of Partner Tier Compliance Tracking? Demo the ZiftONE platform today.