Deal Registration
Deal Registration provides a way for partners or agents to register with you the deals they are working on -- a valuable way to become more aware of what deals are in the overall pipeline, monitor overall partner activity, track partner effectiveness, manage channel conflict and more. It is also a way to establish communication rhythm between your sales support team and a partner -- once a deal is registered, you call up to explore the opportunity and see if you can help in any way.
Formalized infrastructure for deal registration can be involved. There are not many effective ones in the market to license, although web solutions like salesforce.com are great places to start if you have the time and resources to configure it properly. For low volumes of registration, you might be able to have the sales support team manage it directly, otherwise investing in the right infrastructure is worth it. Everything needs to ultimately tie into the sales forecasting system, something easily forgotten. Too many manual forecasting elements reduces overall forecast effectiveness and reduces how frequently you can take a look at how the pipeline is forming up behind specific targets.
Partners will expect a reward for registering deals, typically increased margins. It's fair to also include reward conditions, the most common is to have a time frame on closing the deal. Once the time frame expires, the lead is up for grabs and any reward is forfeited. Don't be too onerous on the conditions though, losing track of the bigger picture which is increased market share. A few points of margin loss should not break a young company looking to establish itself. Never steal the lead from the partner even if you end up doing all the work -- unless of course you do not see value in the partner, now or later. In the latter case, you are better off terminating the relationship then setting bad business precedents that other partners start to fear.
Let's look at the basics of deal registration, including the types of information to capture and some of the common terms and conditions that help encourage it to be a successful element of sales excellence.
Basics
As mentioned above, the overall goal is to encourage the partner to register the deals they are working on. Your business effectively demonstrates a sense of 'honor' through deal registration -- if a deal is registered, you unambiguously recognize that it comes from the partner and therefore remove any hesitation to pay whatever fee is due.
Some simple steps tot keep in mind when setting up a deal registration process:
- Make it easy for the partner - complex processes drive away interest in using the system. Arguably all you likely need is some basic information about the potential customer (contact details, opportunity summary, etc) although the more information you can get, the better (expected purchase date, budget qualification, etc).
- Make it easy for your team - same principal applies. Don't burden someone with endless work when a deal is registered or they start to get annoyed when one is registered, working against the system. Ideally the incoming information would easily flow into a sales forecasting system -- the degree of ease often relates to how sophisticated your own systems and IT capabilities are. In the end, if all you put in place is a structured email between you and your partner, you are often on equal footing with most companies out there. You can address scaling the system at a later time -- presumably the funding would be in place to hire people to implement what you need.
- Follow up - don't assume the partner knows how to sell. Don't assume they know what you know about your products, don't even assume its a real opportunity. Make sure someone picks up the phone (not email) and talks to the appropriate representative to get more information about the registered deal. Direct contact provides an excellent opportunity to get your own feel for how to assess its value and probability from a forecasting point of view.
The death of deal registration occurs when your team starts to report registered deals as highly probably line items on a forecast, without any direct qualifications. Remember the 80-20 rule -- if you need 5 qualified opportunities to close 1 your partner probably does as well. If you start assuming all partner registered deals are likely to close, you are effectively handing over your targets to the partner, something to be avoided for sure if you want to protect your job.
Infrastructure
Apply your selling metrics to your partners. If your reps would carry a dozen leads in a quarter, it is likely your partner reps do as well. You can use this to forecast how many registrations you are likely to have as a way to gauge what type of infrastructure you need to implement deal registration effectively.
Structured email remains a good start. Not technically sophisticated but really the goal is to be aware of what your partners are doing. It's easy for them, and arguably easy for you. You may want to provide your partner with the email template to use so at least you get the data you need.
Web page is a good upgrade from structured email. Provide your partner with a form on your web site where they can register a lead. This way you can make sure you capture the information needed through required fields. It should not take more than a day to implement a web form that sends you a formatted email, maybe a bit more time if you are able to tie it into a back-end database so some reporting can be done more easily. Personalizing the web page is also a good idea, branding the page for each partner -- it makes the partner feel they have an exclusive relationship with you -- which they do in terms of the goals you have set out for them.
CRM integration is typical the pinnacle step in terms of deal registration infrastructure. The better systems will already have some capability to support deal registration, but most do not make it easy to provide a partner-facing portal which is really what you want. The partner logs in as though they are one of your reps and has features and functions consistent with a full sales forecasting tool. This would not be the step to jump to in a young business or with inexperienced partners as the system complexity will drive them away from using it.
If you are struggling with what choice of infrastructure to use -- poll your partners to see what their reps use within their organizations. This will tell you a lot about how sophisticated they are. You will likely find that smaller partners operate their sales process with Excel spreadsheets -- an indication that structured email or web forms is about all you need to do. Being one step ahead of your partners capabilities is all you really need to achieve.
Main Principals
Deal registration is an extension of your own forecasting system. In a direct sales model, a rep would identify an opportunity and follow it through the stages of the sales cycle until it closes, win or lose. Partners are meant to be an extension of your sales team, so the systems you put in place to manage partner relationships should operate with the same principles as the systems associated with a direct sales model. In its simplest form, leads are created, converted to qualified opportunities, move through various stages and either close with a win, or close with a loss (competitive or otherwise).
Partners create leads -- you often don't have any involvement in that, but it does not matter, as long as they have some. They should be converting leads to opportunities, tracking them through the stages of a sales cycle and closing them as appropriate. Deal registration allows you to have some visibility of what the partner is doing. The closer you work with the partner, the easier the deal registration system is you put in place, the more the partner will feel like an extension of your sales team.
Partners who do not create business for you are not good partners. Without some sort of tracking system, you have very little insight into whether or not a partner is giving you any attention. Remember that if your partner is a pure reseller, they are likely carrying many products -- the nature of beast will direct their reps to sell the products that sell the most, the easiest and with the greatest margins. If you are difficult to work with, your systems are too complicated, your product too challenging to defend, your pricing too high for the buyer -- you get the idea, the partner will naturally focus on something else.
Deal registration is one of the most formal ways to be able to track your partners and determine who is the one that deserves that 'gold' status in your partner program. Oh, don't forget, partners need incentives -- reward them for registering a deal -- more than if they close something not registered. You need to have forecasting accuracy, not forecasting surprises. Even positive surprises are not good ones because you can't take advantage of the surprise until after the fact -- you should want to know about all surprises before they happen.
Common Issues
There are many things to keep an eye out for when working with partners through deal registration. Your main goal is to make sure you are forecasting their deals properly. Some common issues to track include:
The deal has expired -- is the deal still active? Is the partner paying attention to it? Can someone else work the deal? Should you take it over? A good approach is to first approach the partner to see what is going on. Perhaps the rep has been reassigned, more often than not, the partner is busy with many products and yours has fallen down in priority. No big deal -- hand it off to someone else. If they argue with you, convert the deal to a finder's fee arrangement (less margin) and close it for yourself -- your job is to be selfish in the end, it's your sales target that needs to be met.
Another partner is active in the account -- if the deal is properly registered, you have to recognize the original partner from a margin perspective. You may want to step in and see if the customer can shed any insight as to why two partners are active. Perhaps the original partner is no longer the favored supplier for the customer -- might be time to change partners. Depending on what the other partner is after -- often the services revenue, you may have to step in and propose a rational division of the margin (or work) to make sure the customer need is serviced without partner conflict.
The partner is not selling properly -- the tendency here is to step in and take over where the tendency should be to work alongside the partner and teach them what they need to know. Given the goal of a reseller model is to expand your overall sales reach, taking over from partners essentially puts you in a direct sales model, which is very expensive to run, especially if the margins are low relative to sales cost. If the partner continues to under perform, they should be replaced.
The deal is not registered -- but it closes through a partner. No problem but don't offer the additional margins you might have had if it was registered. This may indicate your team is not in regular contact with the partner as often you need to encourage/remind them to register the deals they are working on.
The deal is really a raw lead -- the partner has registered a set of deals for every account in his territory (e.g. the business phone book). This is a main reason why you need to have a direct dialog with the rep about each deal they register to see what stage it is at. You can reject the registration if it does not meet criteria set out, you won't know to do that if you don't communicate with the partner.
Recognizing Success
How do you know if your program is a successful one? Some obvious ways include:
It is used -- don't underestimate the most obvious way to recognize success. If only one or two partners of a group of 20 use the system, something is wrong. Perhaps the partners don't realize the system exists or what the benefit would be to them. If your partner managers come across a deal that is not registered, have them walk the partner through the process of registering it. You can also offer SPIF incentives to partners for the use of the system -- it's all about getting your product to the top of their thought process. Be imaginative.
Do deals close -- make sure the system is being used to record qualified opportunities not just raw leads. Ideally 80% of the deals closed through partners would be registered in the deal registration system. If only a handful are, you are encouraging support for channel conflict and likely have a poor forecasting result.
Does it catch conflict -- a main goal of a registration system is to make sure multiple partners do not pursue (waste time) going after the same opportunity. If this never happens, you may want to consider de-emphasizing the system so you can save any extra incentives. If it does catch conflict, be proud of your program and don't hesitate to invite more partners to be part of it. If you do abandon a registration system, you must replace it with some other system or process that helps you keep on top of the opportunities your partner is pursuing. Perhaps monthly calls or visits to review forecast -- you can even ask for their forecast (provide them your format though).
Final Thought
Channel models are tricky to run successfully. It's like having dozens or more sales offices all run by people you do not hire or control, who may or may not want to sell your product on a given day. Don't give up -- if your product is truly channel friendly, you can grow a successful business through these relationships.