When, why and how to tier your channel

Kirsty Gilchrist, MD of twogether Creative Limited, reveals how to tier without tears

When’s the right time to start thinking about tiering your channel? I’m convinced that tiering is way too important to be an afterthought, so I’m going to stick my neck out and say, “When you’re formulating your channel strategy.”   

Think about it.  In the same way that you treat various customers (and customer groups) differently, so you should segment your channel partners into separate groups.

It makes life easier for you – and your partners – when you can communicate and collaborate with focused groups.

And the best time to do it is right at the beginning of the process, when you have the clearest view of the subject.

But once you’ve made the decision to tier, how do you decide which reseller partner goes into which group?

What commonalities should you recognise?

  • Size of partner organization?
  • Volume or value of sales (revenue)?

And don’t forget contributory factors such as industry sectorpartner specialism and territory.

A word to the wise: If you tier solely based on sales volumes/revenue, only a relatively small percentage of your channel will earn high rewards.

Nice for the few, but the rest of your partners are left to their own devices. There’s very little incentive for them to push your message.

To keep them onside and motivated, it’s worth the effort of developing multiple tiers.

Everyone’s a winner (including you)

That way, the majority of your partners engage with you. And it makes it very easy to monitor their progress month by month.

By recognizing small achievements, you can help them stretch to reach higher targets.  

Perhaps you should consider segmenting through accreditation?

Partners welcome accreditation schemes because they recognize specialization and provide differentiation.  

But if you go down that route, you have to decide what knowledge, skills, and facilities are required:

  • Will accreditation be awarded based upon quantitative or qualitative criteria, or both?
  • What will you measure – do you have the information you need?
  • How will you manage the program –do you have the systems, processes and resources?
  • How do you set the rewards?
  • How do you deal with those who fail to make the grade?

Decisions, decisions.  But wait. As well as the when and how to tier, let’s not lose sight of the most important question – why tier in the first place?

It’s because you want to motivate and reward your channel partners.

Obvious, isn’t it? You’re after mindshare and productivity.  You want to ensure that your partners will sell your products or services ahead of those from another competing vendor in their portfolio.  But remember, your channel partners are not in business for you, but for themselves.

Sure, they love your brand – but not as much as they love the support systems and incentives you provide.  

Let’s recap. Why to tier is a no-brainer. When to tier – right from the start – makes a lot of sense. How to tier is more complicated, but building it into your strategy is sound business sense.

However you decide to proceed, keep one thought uppermost: you want your whole channel to contribute to, and benefit from your success. Tiering makes that possible.

Helpful? Useful? We’d love to know. Look out for the next post in this series - coming soon.