At Channelnomics, we field questions about best practices, partner strategies, and channel programs every day. In this series, called “Ask Channelnomics,” we answer some of the questions we receive most from vendors.
Question: Our CFO doesn’t believe in paying partners. He doesn’t see the value that they contribute or the need to pay them since they’re making money on the services they provide to support our software. What should we tell him to justify paying partners?
Answer: Many CFOs and executive team members harbor doubts about the value partners bring to their companies and the necessity of providing incentives at the front end (discounts) and back end (rebates, SPIFFs, accelerators).
Let’s start by getting one thing straight: Vendors don’t “pay” partners a dime. They pay salespeople, sales engineers, sales managers, channel leadership, channel account managers, and many other people inside their own organizations. Partners, on the other hand, don’t receive compensation; they get incentives — discounts and other rewards for their contributions to the vendor.