Deal registering your granny

Deal registration has become a staple of the channel, but with resellers desperate to secure these protected opportunities, questions have been raised about ‘unscrupulous' tactics, reports Jack Gilbert

There is a saying in the channel that resellers are so committed to getting deals locked in with vendors and protected from other partners, that they would deal register their grandmothers.

In principle, deal registration offers all the benefits that are key to a successful channel. The resellers gain protection of their investment, increased margins, and a weapon against channel conflict. The vendors secure a window into their upcoming deals and a tool to help boost volume and market share. But as with any idea, the reality is often different from the theory.

Channel players have voiced concerns that deal registration is being abused. Just like cut-throat salespeople will sell a product to their own grandmothers, so too are resellers pushing deal registration onto anyone they can find and at times even manipulating the truth to get the deal registered with the vendor. Meanwhile vendors are not going through rigorous checks to make sure there is an actual opportunity there.

Paul Lloyd, a former director of SCC, is a critic of deal registration and believes it is detrimental to the channel.

"The first time I came across deal reg was probably around 2006 and it was with Websense, and now everyone does it, more or less. From a vendor's perspective it gives them visibility of deals in the channel, but now the big resellers are registering everything that comes up," he said.

Lloyd claimed the system favours larger resellers with the capability to register many more deals than the smaller players.

"The big resellers have teams of people who register deals - that's all they do - and they register them with as many vendors as they can, because it locks other resellers out of them, and it gives them the first choice for the price," he said.

"The smaller resellers have a real issue because they haven't got the resources and if they get there second, essentially they don't get the price."

"I have been hearing of resellers who are very unscrupulous and are registering when there is no opportunity there"

Lloyd said he felt deal registration often acted as a barrier that prevented smaller VARs from growing.

Unscrupulous behaviour

One reseller figure, who did not wish to be named, also said that deal registration is leading to dishonest behaviour at times, adding that deals are often not properly checked by vendors.

"I have been hearing of resellers who are very unscrupulous and are registering when there is no opportunity there. If a customer visits a stand in a conference, and the reseller gets the name of that person, he'll then go back to the office and say that person expressed an interest in that product, even when they didn't, and will deal register it," he said.

"Often the vendor is then not qualifying the opportunity properly. From their perspective they have 30 to 40 deal registers a day, and do you think that person is going to look through every single one by qualifying them out? Some of them are auto-approved and in some instances they then get approved for six months."

He also said it is often vendors who are encouraging premature deal registration as they are keen to add numbers to their sales pipelines.

"Some vendors are getting caught out because they are approving stuff they should not have done," he said.

"I have worked in places where we had partner communities that sold at near enough cost and in a lot of cases lived off deal registration"

Ayaz Rathore (pictured below), managing director at cybersecurity consultancy SecureIT Consult, said vendors tell partners not to pass on deal registration margins to customers, but this is often ignored.

"Across the board all the vendors are saying do not tell the customer that you are protected with this discount, but a lot of the resellers are breaking the rules. Margins are being passed on to help win deals with customers," he said.

Chris Elliott, country manager of UK and Ireland at Extreme Networks, also felt that when it is not being safeguarded properly, deal registration can be open to abuse.

"I think it's very easy to put a programme in place that the vendor neglects and the partners see the opportunity to make the most of. It's the vendor's responsibility to make sure there is a programme in place that rewards the partner but which has credibility to it, to make sure there is a process that adds value and financial incentive.

You need to demonstrate you are doing something for it [deal registration], not just filling in a form on a website before everyone else," he said.

"If the vendor is not treating it properly - policing it, and having the right rewards in there - there is less incentive for the partner to play by the rules. And if there are loopholes that allow them to get extra margins if they register it first, or with lots of different vendors, then that's what you are going to get."

Elliott also said the channel's increasingly competitive landscape is leading to a rise in pressure on salespeople to get deals registered.

"I have worked in places where we had partner communities that sold at near enough cost and in a lot of cases lived off deal registration. They had teams of people there to input any opportunity or tender that came out, get it on the vendor's systems first to make sure you were registered, and that's how you made your money."

Martin Bradburn, chief executive of cloud start-up Pea Soup Hosting, said he has seen deal registration become a game among resellers during his time in the channel.

"There were some unscrupulous times when there was a cold call, ‘have you got an interest? Yes.' Deal reg it. To me deal registration is something you do when you've got to a point with a customer where you have been speaking with them and have a price structure in place.

"It became a game of who could deal reg first. The only one that truly worked is when the vendor phoned the customer and asked them who they wanted to work with."

Stopping ambulance chasers

But while there are many critics of deal registration, some resellers remain hugely supportive of the model.

One of those supporters is ANS Group's chief executive Paul Sweeney (pictured below), who said his firm would not work with a vendor that didn't have some sort of deal registration in place.

"Deal registration allows us to invest heavily in the customer. We can help them spec out that solution and we are happy in the knowledge that we have the opportunity registered. [It protects us] from what I call ambulance chasing," he said.

"There are certain partners out there who chase ambulances and they won't look to put in any real effort themselves; they'll just jump on deals at the last minute and undercut them. Registration supports the whole industry - we couldn't put in the level of pre-sales investment we do if we weren't protected."

And it is not just ANS that is in favour of deal registration. According to research by Canalys last September, deal registration, along with back-end rebates, was the most important element of vendor partner programmes for resellers.

That enthusiasm is also mirrored at a vendor level, with nearly every major firm now operating a deal registration programme (Microsoft and Check Point were notably late to the party, only launching their first deal registration schemes in 2011 and 2013 respectively).

Calls for reform

What many are calling for is not an end to deal registration, but reform, with Nigel Dunn, UK and Ireland managing director at Jabra, arguing that change is essential to stop resellers "registering the Yellow Pages of possible opportunities".

He said preconditions should be put in place to stop such practices and ensure that only deals with new customers are registered.

"If the [customer] is already visible and in play, the deal should not be allowed to be registered," he said.

"The key factors here are that the process should be legally binding, fair, valuable to the reseller, have arbitration, and be transparent for resellers to see."

Elliott at Extreme Networks also felt change is needed and advocated a move towards value, rather than speed.

"We believe a well-designed and [well-] governed programme is one where deal registration is not granted on a first come, first served basis, but is instead based on the ‘value' contribution the partner provides, by demonstrating a range of presales activities and valuable customer engagement to drive the customer buying decision," he said.

"We want partners to treat deal registration properly and not abuse it, but the onus is on the vendors to make sure they police it properly."