“Co-opetition” entered business vocabulary in the mid-1990’s, popularized by a book by the same title. Written by professors Adam M. Brandenburger and Barry J. Nalebuff, Co-opetition is an instruction book for achieving market leadership through the use of game theory.

The very best part of the book (aside from the fascinating history of Nintendo’s NES rise to near-monopoly, pp 111-117) is a simple, yet powerful, strategy tool called Value Net.

The Value Net diagram shows interlocking, incestuous relationships between customers, suppliers, competitors and complementors. Putting names on the board, organized as described, is incredibly useful. We utilize Value Nets in most of our strategic consulting projects.

Here’s a simple Value net I sketched out for Scala, the leading networked digital signage software company (and client). If you’ve ever been in a Tesco or Best Buy, you’ve seen those massive video walls. Networking and controlling the content on all those screens is what they do.

Remember Maslow’s hierarchy of needs pyramid? If you recall, it describes how all other needs build upon (and on top of) basic physiological needs like food, water and sex (not necessarily in that order). It’s probably something you covered in your first psychology class. Good stuff.

What’s Maslow have to do with incentives for Channel Partner sales reps? Plenty. If you’re planning some kind of super duper promotion involving people who don’t work for you (i.e., your Channel Partners), it’s wise to first understand how these people put bread on the table for their families. Once you understand this, you will be better equipped to select the right incentive based on how your reps are compensated by their employers and your competitors.

One thing you learn in the franchise business is that success boils down to two things: Marketing and Training. Everything else is icing on the cake. Let me prove my point.

McDonald’s Corporate in not in the hamburger business. They’re not in the restaurant business. I suppose you could argue that they may be in the real estate business, and to a certain extent they are.

But the real business of McDonald’s is training and marketing. In fact, they’ve perfected each so well, that by virtue of graduating from their amazingly detailed training program, people knowing nothing about making hamburgers or running a restaurant can be a smashing success.

Their program is so good people are willing to pay money for the opportunity to “work for them.” That’s what franchising is all about.

Having spent four years at Productivity Point International, a franchisor of instructor-led training (a booming field before the internet came along), I continue to be surprised to find manufacturers who haven’t adopted this same concept… that their training would be so well honed that Channel Partners would actually want to pay for it.

You at least have to admit this is a worthy goal, no?

File this under: It’s not the mode of training, it’s your boring approach.

If your products contribute little to your Channel Partner’s top line, it’s a real battle to get sales reps up to speed. They’re always asking why they need to be in your training class or attend your webinar, preferring the JITL (just in time learning ) approach.

You may recognize this as Channel rep code for: “Don’t bother me until I really have to know this…and when I do, I’ll count on you—the vendor—to boil it down for me.”

Here’s an example of what one of my startup clients did a number of years ago…to great success.

Synergetic Micro Systems knew that in order to get an unfair share of their distributor’s time and attention, training had to be fun and to some degree, entertaining.

Synergetic had a number of challenges. Maybe you face similar ones …

Relationships matter. When there’s a bond and common purpose, you can move mountains… or change the modern-day calendar as twelve guys did two millennia ago.

Or let me pose the question a different way. If your goal was to increase channel revenue by 30% in the next twelve months, how many cloned-copies of your #1 Channel Partner sales rep would you need? I bet it’s a surprising small number.

No doubt, keeping these people top-of-mind is important… that is, if you know who they are.

Who “owns” YOUR Channel Partner sales rep relationships?

A few years ago I was called in to help a CEO work through a really tough situation. Two of his sales reps had resigned abruptly. As we worked through the issues, my main concern about protecting his end-customers from pilfering by these two reps wasn’t too much of a concern. He had non-compete agreements in place with his sales reps and his attorney was quick on the draw to remind these two of their contractual obligations.

Score 1 for thinking ahead.

However, he did have another problem. All his revenue…

Do birds of a feather prefer to flock together? Or do opposites attract?

I’m going to save you a lot of time debating this. When it comes to Channel Partner recognition, go with the “Birds of the Feather” approach. Here’s why.

In Question 6 we talked about recognizing the individual accomplishments of top performing Channel Partner sales reps. Today’s question is about recognizing the achievements of your Channel Partners as organizations. This means, acknowledging Widgets Partners, Inc. of North Platte and not Jim Fletcher, their top sales rep.

For many, the first thing that comes to mind when it comes to the subject of recognizing Channel Partner achievements is wall plaques…

John Doerr (the same John Doerr of Kliener-Perkins) was responsible for my first encounter with Channel Sales incentive programs. At that time, he was a field sales engineer for Intel in our Oakbrook, Illinois sales office with an account base of SMBs, which purchased Intel products through one of three local distributors.

Only a handful of our distributor sales reps had technical backgrounds. So, in order to be successful with their accounts, it was important for them to work in tandem with manufacturer’s sales people, like John (Rice Univ., BSEE/MSEE ‘74/’75). And while a distributor rep might be challenged to call on an engineering manager, they excelled at maintaining beneficial relationships with the purchasing department.

For John to be successful, he had to work with the customer’s engineering team (often years in advance) in order to get Intel designed-in. Finding these engineers was a real challenge. In 1979 there was no internet, no email, no faxes and no LinkedIn!

What would you do? Here’s what John did…

Allow me to paraphrase some things from one of my favorite books and then I’ll let you be the judge if this describes you and your company’s “relationship” with your worst customers.

Looking back, before you really got to know them, your worst customers may have been the most enjoyable creatures on earth. They may have been witty, charming and engaging. Some were humble. Many insisted on picking up the tab.

Those were first impressions.

During the getting-to-know-you phase, your team did all the normal things to vet the company. Credit reports, testimonials, references. Everything seemed pretty normal.

But you know something isn’t right now. Somehow, it’s costing you more to service this client than you’re making.

The problem is that you and your staff are literally exhausted …

If you truly know the answer to this question for your business, its products and its services, then you most likely can coin your own money, stop wasting a LOT of time and think of the 4-hour work week as a very long week of work.

Why? Because your description (let’s call it your ideal client profile) would act as a filter for every lead, every opportunity, every phone call, email… well, everything. Taken to it’s logical extreme, you would be able to determine, with some degree of certainty, a prospective customer’s projected lifetime value before you devoted your precious resources.

It’s why companies invest in customer research. Does your company do this? Or is guessing your company’s preference?

A number of years ago I met John Coe, the guy who came up with BANT, an acronym describing the four components of a customer profile. Others have suggested updates to BANT, but for the most part, it’s stood the test of time and is certainly a good place to begin. If you’ve watched …

After reading my post on Question 2, you might conclude Intel had a love affair with its distributors, and that may have been the case at the HQ offices for both parties, but in the field it was a different situation.

I remember walking into one of my first meetings in our Chicago regional office where I was assigned after my first round of training in our West Coast offices. I entered our smoke-filled conference room (Marlboro’s were the favorite) and quickly learned the meeting was about some screw-up at one of our local distributor sales offices. More than likely, a disti rep (shorthand for distributor sales representative) switched the business from Intel to Motorola.

The guys in my office hated Motorola. When they said, “Motorola,” it sounded evil. Like it came out of the mouth of The Exorcist’s Linda Blair…