ESDS believes in a program that keeps a partner relevant to his business

Piyush Somani (Founder, MD & CEO), ESDS Software Solution in an interview to VARINDIA explains how partner programs should be like and why it is becoming for companies to design simple programs for partners -

How important is it becoming for Partner Programs to evolve with the emergence of new business models and rising competition?

We have seen the most successful partner-business models being implemented in the insurance industry, as the insurance agents who have large accounts, get paid better and earn a fair commission for selling insurance to their relationships. Initially we saw insurance companies offering 25% on the first premium while some offered 35%, which has now surged up to 55% over the years. The exact same partner-business model of the insurance sector is now implemented in the IT world as well. Here, various technology companies try to lure partners by offering them heavy margins and commissions on their first payment collected from the end customer. This kind of transaction enables the partners to get a bit carried away with the way upfront money is being garnered. Cash flow is one of the major problem which is faced by majority of Indian organizations, they always prefer upfront payment from customers so that they can manage their own cash flows smoothly. Currently in India, large MNCs have entered and they are trying to make a hold by luring a partner so strategically, that they offer them huge commissions upfront and after a year, they take over the end customer from the partner. These MNCs make sure that the partner is left with no relationship with the customer and this is the reason which is denting the partner ecosystem in India. If this continues to be a practice among MNCs and Indian partners, then the entire partner ecosystem will be destroyed and large MNC firms would have directly established their relationship with the end customers in India.

What factors as a vendor do you keep in mind while designing a vibrant partner profitable program and keeping business profitability in perspective?

At ESDS we strongly believe in administrating a partner program which would always keep the partner very relevant to his business and that is why we do not believe in offering huge commission upfront because we think giving something to the partner on a recurring basis for a certain amount of time will increase his trust in our Business. The partner’s relationship with the end customer should be maintained properly and he should be nurtured because that is extremely crucial for our business. When the partner visits the customer and understands their issues, he creates a new opportunity for us so that we can serve the end customer through cross-selling and up-selling opportunities. All these measures are extremely important so that the partner survives in the partner ecosystem. Our partner business model is completely focused on building lifetime relationship with the partner and hence we ensure that the partner survives while maintaining lifetime relationship with the end customer.

Do you also do any periodic reviews of the programs that you introduce in the market?

Yes indeed, it is always a great practice to review your channel partner business model on a regular basis and we do it periodically. In technology domain, every day we notice the changing technologies and processes and that is why it is essential to keep updating your business model for partners. We proactively and dedicatedly review the channel partner business model so that we can make sure the demands of the channel partners are met. When a new competitor enters the market, he always has a plan to lure your partner and onboard them because it is not obligatory for your partner to be just your partner and not your competitors. So it is vital to ensure that your partner is loyal to you and that the first right of refusal comes to you as a service provider which is a necessity. Similarly, we build strong relationship with our partners where we make them feel comfortable and help them to be successful and to retain their relationship with the end customer for lifetime.

How with time has the equation between vendors and partners changed and what role does a partner program play in it?

There have been vendors who have been previously selling directly from their website to their end customer and had a direct sales team but then eventually switched to partner business model. On the other hand, there have been vendors who have been in the market and are only primarily selling through their partners. So the business model for the vendors keep on changing and what works for one vendor may not be much advantageous for another. Hence, the success we have seen amongst the top OEMs or service providers in India is only because of their prominent relationship with the partner. How you help your partner or how do you help them earn more and more backend rebates and commission is an important element in the channel partner business. Supporting partners to grow their business is a very ideal way to guide them and is a very valuable approach on our part. It is not just about the commission from the opportunities which the partner is bringing to you but it is also about how the partner will learn new technologies and train his staff so that they can push these technologies to their customer and this equation is exactly what plays a crucial role for the success of vendors in India.

Simplicity should be the key for any partner program to be a success. How as a vendor do you try to keep your programs simple for partners?

To keep things easy, we believe in giving our partners a flat commission during the lifetime of the contract when they bring business opportunities to us. We offer our partners a fix percentage on a month-on-month or quarterly basis and if they want a different structure, we then make some exceptions by designing a commission structure for them but still offering a flat percentage is always our first preference. We increase the percentage rate based on the partner’s performance and the new opportunities he brings to our business which in return helps him earn more and improve their margins. We also offer very lucrative deals to our partners whenever they help us promote our new products or services to more and more customers.