Vendors have the power to end false deal registration

It was interesting to read Jack Gilbert's recent article ‘Deal Registering your Granny' [CRN, 19th June] and Doug Woodburn's latest blog post ‘Deal registration, or no deal registration?' [CRN, 22nd June] that addressed the ‘unscrupulous' tactics used by resellers desperate to secure opportunities through deal registration.

In actual fact, I don't believe false deal registration is that much of an issue in today's market. If anything, I have seen a decline in this behaviour as resellers realise it does not benefit them.

Speaking personally, sure, we get a number of fairly spurious deal registrations each month, but I have never experienced a mass registration of customers. Indeed, what would be the point? If there isn't an opportunity, this would quickly become clear once we contact the partner to help progress the deal, only to find there is no opportunity. At this point we would simply close the opportunity down.

I would argue that any company with a well-constructed and managed deal registration programme can cope with the mass registering of spurious deals. If a vendor has a properly thought-through programme and actually follows up deal registrations within a specified timeframe it's very easy to eradicate these problems. Instances like this are easy to spot and very easy to stop. It is just a phone call to the reseller to explain the pointlessness of what they are doing.

Do I need a deal registration team to help make sales?

It is true that some of the larger resellers do have teams of people to register deals, but in my experience that is because they have a greater number of opportunities. After all that is their business model.

In the past it has been known for larger players to use these teams to mass register potential customers - even when there is no concrete lead - meaning no other reseller is able to register a lead with a vendor until the lead is closed.

However, with new practices forcing resellers to include specific details about the leads and with consistent and regular follow ups by vendors to make sure that deal registration processes aren't being abused, sufficient checks and balances are now in place to prevent this type of mass deal registration.

As a result, in today's market partners don't come second in the "race to deal register" due to the lack of a deal registering team. They come second because either: they were second; or they don't register early enough because they think they need to "have a pricing structure in place" before they do so. In my experience those resellers with a volume model (and deal registration teams) come second a lot more than other partners.

This is where I believe there may be some confusion over false deal registrations. The idea behind deal registration is to provide an early identification of an opportunity. It is not to flag up that you have a deal just about to close. As such, it's important for vendors not to assume that any deal registration not resulting in a sale is a false lead.

Vendors need to accept that channel partners are going to register opportunities at an early stage, many of which will not progress. Conversely, resellers need to recognise that not all vendors understand this - so perhaps there's a broader education piece required on their part to educate their vendor customers.

It's a partnership - vendors need to take responsibility too!

Ultimately it's up to the vendor to ensure that improper deal registration does not go on. Vendors need to understand and reinforce reseller best practice by rewarding the channel for the behaviour they require.

Paul Sweeney [the chief executive of ANS] highlighted the key point - if resellers are not exposed to some level of margin differentiation then they cannot (as sensible business people) invest into a meaningful pre-sales effort.

Why would a reseller go into a sales cycle without knowing what they stood to make? Why run the risk that a larger or more favoured reseller will persuade a weak vendor to give them the advantage after investment has been made?

As such, each deal registration programme needs to be tailored to the needs of the vendor and recognise the investment requested from the reseller. Equally I don't think a margin differentiation scheme should only be about new business (or net new customers to the vendor) which the vast majority appear to be.

Reward resellers for good work!

It's also important to ensure resellers are properly rewarded for their success, because let's not forget, their success is ultimately your success. I believe that resellers should be rewarded for their investment throughout the life of the customer / vendor relationship, not just for introducing a vendor to a net new customer.

For example, cross selling additional products and securing renewals requires resellers to invest into customers and for this they need to be rewarded.

To this end Sophos operates a more comprehensive margin differentiation programme than simply deal registration for new customers. We believe that the reseller should be encouraged and rewarded for their work supporting the sales process throughout the entire lifecycle of the customer, including increasing the number of products sold through cross selling of new products as well as retaining the original license.

Awarding deal registrations to the right reseller

Another interesting point raised was around who should get the deal registration. There are two main schools of thought: first past the post or the reseller that adds the most value.

Personally, I favour first past the post, because making a judgement call on several thousand deal registrations per quarter is not practical, and resellers would spend more time selling to the vendor than to the customer.

However, there needs to be an understanding that being first to register is not the end of the process, in fact, it's just the beginning. Once a reseller has registered a deal they have to add value and help the vendor progress that deal to close. If they simply register then do nothing they lose the registration.

Interestingly I see more "unscrupulous tactics" around the question of how much value has been added than around "deal registering the Yellow Pages". Many is the time a customer has been coached into telling a vendor how great one partner is with the promise of a better deal! And weak vendors all too often bow to that kind of pressure.

Those who bemoan deal registration and long for a "level playing field" are asking for a situation where those willing (and able) to operate on 1-2% retained margin are the only ones to profit. Some customers value service and will pay for it in certain situations but the reality of the majority of IT sales is that once the sales cycle is done, customer procurement suffers from collective amnesia about which reseller added value during the sales cycle.

They have made a technology decision and simply buy the chosen solution from the reseller with the best price.

This is not the fault of the vendor but if vendors want a proactive channel they need to understand this and the other dynamics of the customer / reseller relationship, have a clear idea of what they as a vendor want to achieve and structure their margin differentiation programme accordingly. Then they need to actually do what they said they would and stick to their own rules!

So...

Is a properly constructed and managed deal registration programme of huge benefit to both vendor and reseller? - Absolutely.

Is there bad behaviour from resellers? - Probably.

Is it really an issue for a vendor that has a properly constructed and managed programme, or a reseller that understands that programme? - No.

The point is that deal registration can be a positive for both vendor and reseller, but all too often ends up being a source of discontentment to both. The secret is a balance between "first past the post" and "value add" so that resellers are encouraged to deal register early, but also that deal registration is not the end of the reseller activity, rather the beginning of the joint sales cycle.

The key is to have a properly constructed deal registration process in place. Vendors need to be extra vigilant when checking registration deals by ensuring there is no auto approving, and that all the deals are correctly qualified.

One way to implement this is by having a tight timeline. Give the reseller ten days to show that the opportunity is real and start to progress it, or void the registration if it isn't done within this timeframe. This will quickly discourage the blanket registering of deals and give the vendor a more realistic understanding of the sales pipeline.

If there are vendors who don't operate a thought through process and are therefore allowing this kind of practice, then they maybe need to think again.

James Vyvyan, is regional vice president UKI at Sophos

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