July 3, 2019 at 8:43 PM #1870MasterKeymaster
Why Deal Registration?
I occasionally get asked, “Why don’t you have territories?” In other cases I get asked, “Why should I use Deal Registration.” Following is my response.
First, let’s first discuss territories.
- Internal Sales. An internal sales can be assigned territories since the company can control overlap by region, product and size (anything 5 or below), etc. They can also be let go if they don’t perform—so that’s why it is so common—but the channel is not the same.
- Overlap. Some resellers work local (Austin, TX only). Others work an entire region (Texas (size of some countries), plus Oklahoma and parts of New Mexico). While others (like Accenture, WiPro, etc.) are national and even international. If you give a reseller Austin, TX, there will be overlap between the regional and national territories or you have to limit some of your biggest resellers (some may have 28 offices across the country). Why have the biggest resellers if you are only going to throttle them back? You could give some national resellers geographic territories corresponding to their regions. But what are you going to do with centralized resellers like CDW that sell billions out of a central location?
- Dead Spots. If you gave a location (Austin, TX (with over 1 million population)) to a single reseller (or to a regional office of a national reseller) you would typically also setup a time frame (they have it exclusive for 6 months, 12 months, etc.) and you usually lock the territory at the beginning of the relationship. You may also setup a quota (5 sales first 6 months)–a performance clause. However, if this reseller does not engage, does not hit their quota, or doesn’t even learn the product—what do you do with a lead in their territory (you picked up 20 leads at the Austin, TX SXSW trade show)? Give it to them? Contractually—yes. Practically? Heck no! So you have a dead spot in the country and a problem.
- Full Coverage. I had one International company that gave a single reseller all of California. But this reseller only worked locally (50 mile radius–not the entire 840 miles). Another gave a single reseller “Los Angeles.” There are over 240,000 businesses in LA (the 19th largest economy in the world). There are over 800 resellers in the LA area. This reseller may be one of the smallest, least qualified resellers with very few large company relationships. Was this wise?
A policy of registering a deal, or Deal Registration, became popular in the late 80’s and has continued since—in fact, every top channel program (that works with VARs, MSPs, SI’s, etc. (not retail)) has some form of deal registration. It helps reduce channel conflict between competing channel partners and with your internal sales department. The deal registration policy has numerous detailed checks and balances, along with additional benefits and is described in detail within the partner portal. Please review.
- Can another reseller still sell the account? Deal Registration provides exclusive benefits, but it does not force the customer to buy from ONLY that reseller. If the reseller can’t close the deal with ALL of the Deal Registration benefits, there is usually another problem—often they don’t have a good (or the best) relationship with the account: maybe they burned them on prior price, or had poor support, or were a pain to work with, were always late, or they may be competing with an MSP that already “owns” the account for most tech products. Some companies have exclusive purchasing agreements (GE divisions were supposed to order from CDW)—but the reseller has to learn about these before spending too much time (or sell “through” CDW – creative). The “market” teaches best and we cannot reward poor behavior or sloppy salesmanship—we can only offer advantages. There will always be some conflict (they are competitors), but Deal Registration removes most of it.
- What if the Office takes the order? Sometimes an account may have a question and call the vendor. Or their reseller is not available. As mentioned above, the company should always ask if they are working with a partner. Other times the prospect can’t get hold of their reseller (on vacation), but just wants to get the product ordered. In this case, it is best for the company to take the order (always take the money when the customer insists!)—but it is not a “sale,” it is customer service and the company would usually afford this service to resellers and internal sales (much like a sales manage might help his sales rep that is on vacation—“Hey, that deal came through!”).We would still have to pay the reseller (the full amount) if the reseller registered the deal. Two minutes to process an order is not the same effort as the days, weeks or months to present, follow up, do a mini-trial, overcome objections, etc. and close the sale. Plus, we should always take a prospects money when they are willing to give it to us—we can easily work out the details later. But tie goes to the runner—and the reseller is the one doing the real work.
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