These two types of partnerships are so often discussed in the same breath, that one begins to wonder, aren’t they really the same? Close, but not exactly. The differences between agents and influencers is often overlooked when developing programs – however there is a difference in how they are motivated that must be taken into consideration. From the collegiate Webster dictionary:

Influence: the power to sway or affect based on prestige, wealth, ability or position.
Agent: One that acts for as the representative of. One through which something is done or caused to happen.

For our purposes of creating indirect channels to target end-customers Agents are typically individuals or companies tied to a vendor, who does not take title but “sells” products and services. Think of State Farm Insurance for a quick example of the agent model. In high technology, these agents are typically solution providers serving SMB customers with a mixed product and services model. These are “specialists” that lead with a particular vendors’ products, but aren’t high volume players and thus can’t compete with a typical reseller. The objective is to generate demand and the reward is commissions. The value proposition to agents is to empower and reward them for finding new customers and driving repeat business. The compensation is typically commissions paid to the company – for example, 15% for new customers, 10% for additional business within a customer, 5% for renewal business and “kickers” for focus areas or promotions.

Market forces and competitive factors are forcing hardware, software and services companies to be innovative in the way they engage partners. And thus more companies are focusing on rewarding partners that influence revenue and developing “agent” programs to drive demand generation. We see two primary factors contributing to the interest in influencer and agent programs. The first is the shift from shrink-wrapped software to the license model. The software license model puts more emphasis on bringing in the customer for a long-term commitment than the delivery of the product – since the product is delivered regularly (even daily in some instances) via the web. So with the growth of licensing models for software and services, compensation has moved to selling and managing customers rather than handling transactions. Licensing models have also increased the focus on customer care and maintenance renewals – encouraging and rewarding partners for renewing contracts. Declining margins is the second factor that is contributing to the adoption of influencer and agent programs. As products become more of commodities and margins decline, resellers are forced to change their business models to focus on services and emerging technologies.

To continue to drive new business generation, innovative companies like Cisco develop agent models to encourage resellers to recommend and sell Cisco technology. The Cisco e-Agent program improves a partner’s bottom line indirectly by introducing new efficiency measures to the sales fulfillment and fee collection processes. In the model, the partner creates the demand for the product directing the customer to order directly from the Cisco web site, indicating the partner they are working with. The partner earns an agency fee in lieu of margin. The distributor drop ships the product directly to end customer. This agent program allows partners to take the resale off their books and receive a fee for the hardware sale. This model also allows the partner to focus on its value-added services instead of tying up resources in hardware inventory and managing receivables, which are lower margin businesses than network architecture design services. Thus, Cisco’s partners do not have to compromise their services-based business model by passing lower-margin hardware through their books. Cisco’s own efficiency also benefits considerably from this totally web-based process.

Influencer and agent programs belong side-by-side with other partner initiatives such as reseller channels and should be integrated in a companies overall go-to-market strategy. The goal of all influencer and agent programs is to reach target end-user customers through the channels they engage for advice and consulting services. So, in building an influencer or agent program, we start by aligning customer needs and preferences with the channel partner type. We examine how different segments of end customers, from enterprises, to mid-size companies to small businesses and individuals, learn about technologies and products and who their “trusted advisors” are. This question might not always be as obvious as it sounds. Quite often the individuals within these organizations receive recommendations and influence from people that vendors don’t typically consider part of the standard “channel.”

In addition to determining the target customers trusted advisors, which could be associations, friends, and service providers we evaluate the full solution need of the target customer. A large part of determining a multi-channel go-to-market strategy is understanding what other products and services a target customer typically purchases along with your products/services. The full solution often includes other hardware and software products as well as consulting services, implementation services and often maintenance. Understanding the full solution needs of the customer help you evaluate where to look for potential influence and agent partners.

Influencers are considered individuals or vendor-independent companies responsible for influencing buying decisions. They are typically consultants or system integrators that have a service-centric revenue model. Influencers are usually “generalists” meaning they don’t typically lead with a vendor and take pride in being neutral. The objective in working with influencers is to empower their services and the rewards vary depending upon their business model and needs. The value proposition for influencers is that you’re going to help them enhance their skills so they can increase their services business around your technologies. And the compensation for the influencer program is often an accrual of funds that can be used for business building activities such as training, event passes, joint marketing activities, merchandising and demo/proof of concept licenses.

BEA has been leveraging an influencer model with global and regional system integrators as their primary partner engagement model for the past four years. The goal of the program is to reward the influence partner for driving specific selling activities that tip the opportunity towards BEA. A partner must demonstrate one of the following to qualify for the influence reward:

• RFP or proposal
• Proof of concept or demo
• Competitive or deal advantage insights

To claim influence in an opportunity the partner must create an on-line registration form 30 days before the deal closes and the opportunity must be approved by channel management and/or the field sales team. Only deals over $75,000 qualify. Within 30 days after the close of the deal, a regional system integrator receives a total of 10% of the deal licensing revenue in compensation. 7% is provided as a rebate and 3% is available for the partner to re-invest in co-marketing opportunities.

In developing influencer programs, recognize that some of your influence partners will need to be managed as alliances. The top influencers are typically global system integrators such as EDS, Accenture, First Data and CSC or global vendors like IBM, Microsoft and Hewlett-Packard – which typically can not be effectively engaged in a traditional channel program.

We’re proponents of new business models that reward partners for value-added behaviors. As Heather Clancy with CRN said, “It seems logical to me that those who clearly have influenced the close of a sale should be compensated for it. Period.”

For an advanced copy of our newest whitepaper on Agent & Influencer Programs, please send an email to info@amazonconsulting.com with your name, title, company and email address.

Here’s a sample of our latest work, the kinds of services we’re offering, and details about our specific client engagements:

Services Benchmark Report

• Conduct intensive research on the services revenue received by a select group of peer companies in both North America and EMEA in the areas of technical support, consulting and educational services
• Data reporting and benchmark analysis provided on services capabilities and revenue in a formalized management report
• Report included analysis of services business model, overview of support, maintenance, education and consulting offerings along with services pricing details and channel engagement information
• For use by strategic sales organization as foundation for producing a new maintenance model

Siemens Medical Solutions: Channel Model, Plan and Framework

• Development of a system integrator channel specifically to increase marketing presence
• Determine investment required and potential program ROI
• Create program model and partner engagement framework
• Design ramp plan and timeline for program launch & adoption

Create a “Total Partner Experience” Program

• Define a program which encourages “ease of doing business” with NetApp for partners
• Develop a comprehensive methodology and framework for a TPE program
• Design process and metrics for program success measurement

BlueRoads provides channel management software and expertise that enable companies to market and sell more effectively through indirect channels. BlueRoads 5 empowers individual partner sales representatives to actively participate in closed-loop sales and marketing processes, enabling companies to increase Return on Channel Investment.

BlueRoad's Channel Management Tip: Shift your focus from "managing organizations" to "managing opportunities." Partners are people, not faceless organizations. They are individuals that recommend and sell your products. The leverage effect of the channel is maximized when you and your team are focused on helping these individuals close opportunities. Learn about opportunity management solutions at BlueRoads.

Problem: You find yourself at the end of each quarter with unused MDF & Co-Op dollars but short on the internal resources needed to leverage the funds?

Answer: MarketPro – A fully scalable, experienced co-marketing resource to help you and your partners effectively leverage MDF and Co-op funding.

Provide your partners with an approved, centralized, MDF or Co-op funded source for the marketing help they need. Amazon Consulting’s seasoned channel marketing consultants will work hand-in-hand with your channel partners to create and execute effective lead generation activities based on proven templates and customized to fit their specific needs, including...

• Direct Marketing Campaigns (Mail & Email)
• Collateral Development
• Telemarketing Programs
• Event Production (Seminars and Webinars)
• Sales Incentive program execution

To evaluate the ROI realized from your current MDF and/or Co-op programs or discuss ways in which Amazon Consulting can help you implement the MarketPro service in your organization contact us.