Driving your business through corporate partners helps build a much more scaleable business. It takes time to get the channel started and the channel needs feeding. How you reward your channel depends on what you expect from them and what your corporate partners are doing for you.
Partners should be rewarded according to the extent of the results and to what extent they contribute to the sale and delivery. There are various levels of responsibilities along the sales process / customer journey between your partners and your company, depending on the type of partnership and respective company capabilities.
| What Partner does |
What you get |
Finders Fee or Commission? |
| Introduction to a suitable target company |
Prospects |
Is a warm introduction to a target company worth something: Small Finders Fee, on a successful sale. |
| Introduction to a qualified lead - defined need for your services |
Qualified Leads |
A qualified lead is of real value - a more substantial Finders Fee - depending on the effort to close the sale. |
| Partner drives the sales process with support from your company (Sales with pre-sales Support) |
Sales Person with a pipeline and schedule for pre-sales support |
If the partner significantly reduces your effort in closing the sale - then a portion of the commission should be considered. |
| Partner drives and closes the sale with your sales materials and/or demo’s (Sales and pre-sales) |
Sales & Pre-Sales and a pipeline |
Only slightly different to the above, except your partner has the capability of completing the sale on their own. If they can bring you done deals, then they deserve a near full commission on the sale. |
| Partner closes the sale and implements the product and delivers the services (Licence Fees) |
Service Reseller and a forecast |
Where all you get is an agreed portion of the Licence Fees. The partner gets their service revenues and their portion of the licence fee. Sometime you can sell premium services through the partner also to help them deliver. |
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Some points of note:
Typically you own the customer relationship if you’re delivering the full service. If your offering is part of a full service and you are not the prime-contractor, then you may not have a direct commercial relationship with the client.
Finders Fees and Commissions are payable on successful sale and cash in the bank, but the timing may vary for Finders Fees just to keep it simple.
Sharing Commissions may be required between your sales people and different types of partners. This should be clearly defined from the outset to avoid any confusion or conflict. You need your sales people to see the value in working with partners. Your commissions must be defined accordingly.
It would be interesting to hear how companies balance sales people’s commissions and shared responsibilities and commissions with referral/reseller partners?
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