• Some traditional channel challenges – access to talent, smart budgeting, finding the right mix between live-event and digital recruitment, etc. – will continue in 2022.
  • Partner incentives will become even more strategic, diverse, and outcome-oriented.
  • Despite widespread water-cooler musings in the channel, distributors will remain power players.
  • Tiering will continue. Or it won’t. It depends on what your definition of “is” is. (What exactly is tiering?)
  • Through-channel marketing is becoming more collaborative and customized.
  • Certifications may be optional, but partner training is not.

6 Channel Partner Program Predictions for 2022

Channel partner program predictions for 2022

2021 was another whirlwind of a year—for the world, of course, not just the channel. Still, amid all the uncertainty the pandemic has invited into our lives and work, resilience emerged in the channel, with programs advancing, competition stiffening at both the distributor and partner levels, and live channel events returning.

 As we head into 2022, what’s in store for the channel? To answer that question, we interviewed six channel leaders about their predictions for the year ahead.

Looking Back on Channel Partner Program Trends in 2021

Before we dig into 2022 predictions from our brain trust, let’s look at some carryover trends from last year that influence our year ahead. Throughout 2021, we checked in with industry leaders to get a beat on everything from onboarding practices to ROI metrics and everything in between. Two pieces, in particular, are pertinent to the year in front of us because of their focus on channel sales and marketing.

Channel Partner Sales Trends

In the blog “How To Recruit Channel Partners: 10 Strategies From Channel Leaders To Recruit Partners That Produce,” we discussed recruiting productive sales partners. Key tips included:

  • Develop ideal partner profiles so you can target best-fit partners from the get-go.
  • Don’t overlook “soft” partner attributes, such as attention to serving customers and not just selling, a collaborative mindset and a strong work ethic.
  • Appeal to prospective partners as business owners by focusing on their needs, not your company or its products.
  • “Fish where the fish are” and build your brand, develop your leads and build your community where your partners meet.
  • Embrace relationships with distributors to screen for – and reach – high-performing partners.
  • Follow up with partner leads quickly.
  • Lean into your unique value proposition for partners.
  • Build trust and mindshare by focusing on fast quotes and sales engineering, and quick problem resolutions
  • Assess, assess, assess. Test, refine and meet with your partners quarterly.
  • Focus ongoing investment on best-fit partners instead of spinning your wheels on wrong-fit partners.

Channel Partner Marketing Trends

In “11 Channel Marketing Best Practices to Engage Partners and Earn Mindshare,” our expert-sourced insight and advice included:

  • Look at leading and lagging indicators when measuring channel marketing efficacy.
  • Track metrics and ensure they point in the right direction toward ROI.
  • Leverage your high-value assets across your direct and indirect sales organizations to boost revenue, underwrite “soft” marketing and make the C-Suite happy.
  • Create customizable content that partners can leverage for marketing automation.
  • Track partner-specific metrics.
  • Evaluate to-level and through-channel marketing individually; they’re not the same and shouldn’t be lumped together.
  • Always seek improvement in both your to-channel and through-channel marketing.
  • Keep partners engaged with advisory councils, training, turnkey campaigns, quarterly business reviews (QBRs) and other initiatives.
  • Offer consulting and marketing-as-a-service solutions to high-value partners.
  • Seek partner input in your marketing activities. They know what they need better than anyone else.
  • Ask partners for their marketing plans in exchange for resource support. It’ll focus their efforts and increase your ROI.

6 Channel Predictions for 2022 from Top Channel Partner Programs

With this sales and marketing data trending from last year serving as our contextual backdrop, let’s dig into what the channel has in store for us this year. Experts we turned to for insight have broad visibility into channel trends—from expert advisers who serve multiple channel firms to individual operators who fully embrace channel initiatives.

Our brain trust includes:

Here are their predictions:

1. Partner incentives will become more strategic and sustainable.

“Incentives are under intensive scrutiny and pressure,” says Walsh from Channelnomics. “As more offerings are transitioned to a services model, vendors are asking more of what partners are doing to earn their margins and incentives. More vendors are moving to true earned performance incentives, favoring partners with proven performance records.”

Walsh adds that he’s also “seeing more vendors building referral programs, in which they compensate companies and individuals that supply warm opportunities that convert to paid sales with monetary and nonmonetary rewards.”

Taking the long road

AchieveUnite’s Caragol says that increased scrutiny leads to incentives that drive greater success over time. “As vendors put more emphasis on long-term partner success, partner incentives will focus more on rewarding and enabling partner competency and specialization development,” she says.

Theresa Caragol AchieveUnite

Incentives for ongoing customer support throughout customer lifecycles and renewals also will become more commonplace. “Incentives are also being spread out along the customer journey – especially in recurring revenue models,” Caragol adds. “Vendors are asking and incentivizing partners to stay connected past the initial sale to ensure the products and solutions are implemented, and there is wide-scale adoption and expansion on the journey to renewal.”

Repeat-deal incentives

Some emerging incentive programs are designed to ratchet up sales partner engagement as relationships mature, says Richards from Cloudinary. Those include “commission rate … accelerators for bringing in multiple deals (in a 12-month period),” she says. “The more deals you bring in, the more compensation you get on each subsequent deal.”

A broader mix of incentives

These trends mark a shift toward a wider array of incentives rather than a wholesale change. To be sure, the upfront SPIFF is alive and well. “In today’s marketplace, we are seeing the traditional upfront bonuses (SPIFFs) based upon product, revenue and term,” says Aryaka’s Pearce. “Some additional trends regarding these SPIFFs also include offers for first-time [sellers] and/or win-back incentives for inactive sellers. [Additionally], obtaining an overall revenue goal within a specific timeframe is rewarded in some cases.”

Outcomes matter

Zift’s Tenuto says the more nuanced approach at compensation makes sense given the maturity of the channel. “There’s been plenty of talk that some of the intense, upfront SPIFFs that emerge – often with new entrants or product launches – are the channel’s version of ‘irrational exuberance,’” she says. “It makes sense for some of those incentives to migrate toward business outcomes and not just fast sales.”

Two outcomes, one incentive

BuzzTheory’s Henderson agrees with Tenuto, noting that incentives that encourage long-term retention encourage ongoing engagement along the way. “If you’re incentivizing longer-term outcomes at the customer level, you’re also creating more ongoing collaboration with your partners, which is good for maintaining mindshare, building a stronger working relationship with partners and driving more sales.”

2. Distributors aren’t going anywhere soon.

“The ‘death’ of distribution is grossly exaggerated,” says Channelnomics’ Walsh. “The channel is not uniform globally, and distribution does and will continue to play a significant role in supporting vendors and partners for many years to come. Even in mature markets, distributors are contributing to vendors’ go-to-market operations by taking on roles such as partner management, marketing, technical support and services administration.

Larry Walsh Channelnomics

“While vendors are increasingly skeptical of distribution value, they haven’t found an answer to how to replace distributors without incurring operational replacement costs. In many cases, vendors don’t have a firm understanding of the deferred costs absorbed by distributors. For these reasons, the great distribution debate is largely moot.

“As for the partners formerly known as master agents, they’re on the ascent. Whether we call them technology services brokerages [TSBs], technology services distributors, or professional sales facilitators (that debate isn’t settled), they are proving increasingly important for their ability to transact services with regularity. These partners will continue to rise not as an alternative to distributors but traditional resellers.”

Central to success

To Walsh’s point, Aryaka’s Pearce says his company is leaning heavily into distributor relationships. “Distributors and TSBs will always be an important ingredient in the recipe for success. In fact, at Aryaka, we have moved to a 100 percent channel-led model. Our relationships with our distributors and TSBs are the cornerstone of our company’s future, and everything we build is based around our channel relationships.”

Partners need them, too

BuzzTheory’s Henderson points out that distributors offer value on both sides of the vendor-partner relationship. “They don’t just simplify life for vendors,” she says. “They simplify life for partners, too, and their partners trust them with mission-critical functions like negotiating airtight vendor contracts and auditing commission payments. Pre-sales engineering and post-sales support increasingly offered by distributors are becoming critical to winning complex deals and ensuring successful implementations and adoption, which are vital for subscription-based services.”

Here to stay

AchieveUnite’s Caragol also sees distributors as well-seated in their roles. “How much the channel relies on distributors will not change significantly. What they rely on them for will continue to become more strategic, enabling long-term partner success and aggregating multivendor products to offer a business solution.”

3. Relationship status with tiering: “It’s complicated.”

“At face-value, tiering is very arbitrary,” says Cloudinary’s Richards. “A ‘Gold’ partner for one company could – and probably has – a different meaning for another. Plus, let’s be real, a customer doesn’t purchase from a partner because they are Gold or Platinum or doesn’t buy because they are Bronze, even if they know what the levels [or] tiers mean. The customer buys from a partner who is best suited to meet their needs [and] solve their specific problem(s). In order to win the deal, a partner must earn the customer’s trust by providing a customer-focused solution at a price point the customer sees the value in.

“On the other hand, tiering does make a difference in the vendor-partner relationship. Vendors do need to be able to identify, segment and prioritize their partners in order to best work with them. This [segmentation] could be based on customers served, markets served, commitment to the relationship (revenue commitment, training commitment, marketing activity commitment), etc., and this is what drives the partner tiering [relative to] the level of support a vendor would provide. Whether this is done in a true Gold/Silver/Bronze way or a points-based way, you are always going to have to ‘tier’ your partners so vendors can most effectively work with their partner base.”

Fading out?

Aryaka’s Pearce sees tiering fading away, at least in a traditional sense. “The industry seems to be moving away from tiering,” he observes. “Most channel partners have settled into their chosen model of standalone, or they operate with the assistance of one or more of the TSBs. Now that that has been established for most, the preferred go-forward structure for most partners is to sell within programs that manage and reward through the ‘carrot’ approach, rather than with a ‘stick’ that traditionally included penalties within a tiered partner model.”

Ed Pearce Aryaka

Competency-based?

Caragol from AchieveUnite also sees traditional tiering moving to the rearview mirror. “Partner programs are evolving to focus on developing partners to deliver the best customer experience possible,” she says. “This will result in partner programs moving away from the traditional tier-based structure to one that focuses on competencies, with requirements around training and capabilities.”

Instead of a Gold/Silver/Bronze architecture, she says, we’ll see partners who are accredited to sell your solution or who have cloud migration expertise, for example.

“[What’s] forcing this change is the shift in power to the end client, away from the vendor,” Caragol says. “Increasingly, it is the partner who is owning customer success and delivering professional services around the vendor’s solution.

“Vendors are offering more and more training, enablement, business growth training, accreditations and certifications to ensure the best results with the end-user client. At the same time, partners are changing their mix to offer more and more partner-led services and increase their value position with the client. All these driving forces are pushing back on traditional programs to simplify and focus on the exact needs of the partner and vendor, which is pivoting around complete partner competency.”

Tomato, tomäto

Ultimately, the matter may come down to semantics and how you define tiering. For this reason, Channelnomic’s Walsh sees the channel’s tiering debate as an unproductive “red herring” and dislikes the question because “it assumes the channel is uniform.”

“Not that many vendors have moved away from tiered programs,” he explains. “Many others (the majority, in fact) maintain their traditional multi tiered structure.

“The truth is many vendors say they’re eliminating tiers as a means of simplification. The reality is the complexity in their program has nothing to do with their tiering structure but rather how they write policies and administer program requirements, resources and incentives.

“For some vendors, flat hierarchies work well. For others, it doesn’t. How programs are structured is a matter of context for what works best for their go-to-market strategy. Even many tier-less programs are only that in name; the constituent workings of the program are essentially tiers. What matters is how a vendor structures a program to motivate partners to higher levels of performance and contribution.”

4. Through-channel marketing will become more collaborative.

“Turnkey, cobranded and sharable marketing and sales enablement programs are becoming central to channel and field marketing teams alike,” says BuzzTheory’s Henderson. “The trend toward deeper enablement was already underway, but the pandemic supercharged it, creating the need for assets partners can use in place of calling on prospects and customers in-person. And with decentralized workplaces becoming a permanent norm, that need will only grow moving forward. Already, we see significant demand for these programs in 2022.”

Khali Henderson BuzzTheory

It’s called a “partnership” for a reason

“The term ‘channel partner’ means just that,” says Aryaka’s Pearce. “Partners aren’t looking for just MDF funds. They are looking for suppliers who will truly ‘partner’ with them to assist with identifying, gaining access to, and providing appropriate solutions for right-fit prospects … ultimately turning them into new customers. This is accomplished by providing unique market and customer intelligence, along with additional marketing assets that channel partners desperately need that include campaigns, ABX [account-based sales and marketing] leads, etc.”

Program stage makes a difference

“I think it depends on the vendor’s partner program maturity level [combined with] the partner’s sales and marketing maturity level,” says Cloudinary’s Richards, explaining:

  • For newer vendors and partners, there will be a greater emphasis on co-marketing wherein the vendor is working side-by-side with the partner, splitting budget, resources, and work 50-50.
  • For more established programs and partners, marketing assistance (e.g., turnkey sales and marketing materials in the portal, concierge programs) will be very well received.
  • For fully mature programs and partners, MDF is imperative.

5. Partner training will remain vital. Certifications are less clear.

“Training will always be important, but certification is a wildcard,” says Richards from Cloudinary.

Valerie Richards Cloudinary

“For training, vendor’s partners are out there selling on behalf of the vendor …, so they must have the same training available that the vendor’s direct teams get if not more because the partner is also carrying seven-plus other solutions or [is] maybe a small mom-and-pop shop [that needs] additional baseline training on sales and marketing tactics. The key is to make training as easy as possible – accessibility-wise and lengthwise.

“Certification…really depends on the offering. Don’t have certifications because you think you need to have certifications. Think about the role your partner plays for the customers and/or your business, as well as the partner’s business model, and really think about what makes sense.”

Undefined value

“Is there value in training and certifications today? That’s a real open question,” says Channelnomics’ Walsh. “Partners consistently say that certifications have little value in their ability to sell to end customers. Vendors can’t define how training adds value to their partners.

“Does that mean training isn’t important? No, but vendors need to redefine the intent, meaning, and value of training and certifications beyond the requirements of their channel programs. Many vendors say training and certification are necessary to ensure a superior customer experience and outcome. However, virtually no vendor has a means or attempts to measure customer experience with their partners.

“Regardless, vendors will continue to use training participation and certifications as a means of measuring qualifications and segmenting partners in their networks.”

Necessary to “keep up”

“Training and certifications will always be important for channel partners to keep up with technology in an ever-changing industry,” says Aryaka’s Pearce. “This need varies by partner [or] seller and can range from understanding how to identify a customer’s needs, knowing how to introduce a solution, all the way to understanding the technical aspects of the product or service being delivered. Finding the right supplier who can train, certify and support partners at any level is of utmost importance.”

Structured development

“The strongest argument for training is that it makes partners carve time out to stay on top of the solutions they offer,” says Zift’s Tenuto. “For many vendors – partners, too, for that matter – whether or not certifications are directly trackable to sales is secondary to ensuring that partners stay ahead of the curve. Ultimately, that process benefits vendors and partners alike.”

6. There will be “not so” new challenges going forward.

When we asked for the channel’s biggest obstacles and blockers in 2022, our brain trust detailed a familiar list of challenges, proving the adage that the more things change, the more they stay the same.

Using budgets wisely

“The biggest obstacle channel programs face today is the proper and strategic use of marketing budgets,” says Pearce from Aryaka. “There are endless requests and opportunities for marketing spends and sponsorships; however, there isn’t an endless supply of marketing/sponsorship dollars. With this in mind, both suppliers and channel partners need to collaborate [to determine] where they both will get the best return on these dollars spent. It’s also as important to be able to track and document the ROI for each dollar spent in order to maintain and/or grow this budget in 2023.”

Demonstrating value and ROI

“Demonstrating value and return on channel investment,” says Channelnomics’ Walsh. “As much as the industry talks about data analytics and data-based decision-making, many channel programs are challenged in attributing partner contributions to corporate performance. Even as vendors profess the need and necessity of partners in their go-to-market strategies, the lack of data or the ability to agree on data and its meaning means channel programs are vulnerable to reprioritization in budget and resources.”

Containing application sprawl in partner engagement and reporting

“The lack of centralized data continues to make life harder on channel marketers than it needs to,” says Zift’s Tenuto. “As marketing programs become increasingly complex, centralizing all that activity in a reliable PRM for unified data analytics and dashboards will become essential to confidently funding and managing the surgical, individual-partner-level initiatives that many channel executives would like to pursue.”

Heather Tenuto Zift Solutions

Finding the right mix of live-event and digital marketing

“The return of live events and ongoing digital marketing initiatives do not present an either-or proposition,” says BuzzTheory’s Henderson. “You have to walk and chew gum at the same time. Striking that balance was always a challenge; the biggest difference now is which is most important. Before the pandemic, companies generally weighed live events over digital and enablement initiatives. Now, with the pandemic interrupting live channel events and the ability of partners to perform sales calls in person, digital campaigns and enablement are indispensable.”

That pesky (lack of) talent problem

“Attracting, hiring, developing and maintaining staff will be one of the biggest challenges for vendor channel programs,” says AchieveUnite’s Caragol. “Related to this will be the challenge of working with partners who are facing the same challenges. Vendors can help themselves and their partners by investing in ways the individuals in their respective teams are personally engaged and developed.”

Caragol points to “The American Upskilling Study” by Gallup and Amazon, which found that employer-provided upskilling helped solve recruitment challenges, increase productivity, and improve employee satisfaction.

“This [survey result] underscores the need for vendors to help partners and themselves upskill their employees with the training and enablement they can offer and is another proof point for programs to pivot and focus on capabilities to ensure success,” Caragol says.

Matching the right value propositions to the right partners (and their customers)

“[Challenges include capturing] mindshare from partners, engagement with partners, ensuring the right value prop to partners, ensuring the right value prop with partners,” says Richards from Cloudinary.

In other words, stubborn challenges tend to remain stubborn challenges, even as circumstances change.