Bringing order to dysfunction and chaos


Is there a solution to this disorganization and chaos that seems to reign in Asian channels? In order to achieve efficiency and effectiveness gains, then a certain level of longer term commitment and structure must be put in place. Without that, there are no measurable goals, there is no ability to define success, and--more importantly--there is no ability to sustain a workable business model.

Regional drive

Channel incentive programs are about measuring sales success through the application of programs that manage a relationship with the channel. Where most channel incentive programs fail is through lack of results measurability, as well as the short-term nature (usually one quarter) of driving sales revenue in hopes of creating a "spike" at the end of a quarter. Running these types of programs for individual markets is difficult to manage from a regional perspective, and labor-intensive--not to mention that you'll never gain economies-of-scale benefits in the region if you are running different programs in various markets.

IT vendors are now ramping up Asian regionalization and, with this shift, they are starting to look at programs that will provide all of the above benefits in a cost-effective manner. One such innovative channel strategy--which is gaining momentum in Asia and beyond--is using the mechanics of loyalty points-based programs. These programs are used to recognize and reward behavior, as well as open a communications dialogue between the channel and the vendor (something that has traditionally been difficult for vendors to do in a two-tier channel structure).

The benefits of such a program are many. Vendors can define the points-earning scheme to reflect managing positive behaviors of the channel sales people. Instead of just measuring sales, they can include things like training, seminars and product launches. This will help them sell better, not just more, and just as importantly, communication will increase between the vendor and the channel.