This article provides an in depth look at a worth-based channel management model at Cisco Systems for handling the Value-Add Reseller (VAR) channel. In March 2001, Cisco started a change from a volume-based channel management model, which had been driving out partner value, to a value-based model that linked channel rewards to specific channel value-add activities. Crucial components of this new model include: identifying opportunities for station value-add; architecting channel plans to enable route value-add; connecting monetary benefits to value-add channel tasks including a "holdback system"; and exercising important discipline to handle field pressures for volume-based rewards and diluting certificate conditions.
It illustrates that VARs can serve as a significant sales channel, profitably selling complex solutions to customers that are satisfied under a value added channel management framework. They can also uncover demand opportunities that are incremental to the pull promotion of even a strong brand like Cisco. Nevertheless, firms should exercise discipline that is critical to prevent combining quantity-based rewards with a value- based framework.
PUBLICATION DATE: November 01, 2009 PRODUCT #: CMR442-PDF-ENG
This is just an excerpt. This case is about SALES & MARKETING
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