ADTRAN greatly simplifies channel program with new pricing policies

ADTRAN has dumped product discount rules intended to ensure quality by limiting discounts to partners specializing in the area, while at the same time expanding training with free self-serve modules, and eliminating the deal registration revenue threshold.

Huntsville Alabama-based ADTRAN has made a significant change to the structure and philosophy of its ADvantage Partner Program. The way discounts were tied to specific specializations has been completely changed, so that now having any single specialization entitles the partner to discounts on all products. In addition, the annual revenue threshold, which was difficult for some partners to meet, has been eliminated, while the deal revenue threshold has been halved. Finally, while training had previously been either in Huntsville or online, and had not been free, self-study modules which are free have been added. ADTRAN believes that the sum total of all the changes will result in partners being more engaged with the company.

Ted Cole ADTRAN 300

Ted Cole, ADTRAN’s vice president of channel sales

Ted Cole, ADTRAN’s vice president of channel sales, said that while the old program was not dysfunctional, they were looking for ways to improve it.

“Last April, I was having a quarterly business review with a distributor, and it was suggested that our pricing complexity could be reduced, that this would be better for resellers in putting together pricing proposals, and would be easier for distributors,” Cole said.

Cole said that when he looked at it from their point of view, he saw a weakness in the program’s structure.

“We were trying to drive behavior through specializations, and you got special pricing only if you had the specialization that covered the product area,” he said. “The idea was that if you are selling unified communications, you need to be specialized. We were making sure our partners would be badged so customers would be satisfied, and we did this by restricting the sales of the products to partners with the specialization.”

The problem, Cole said, was that the system was too complex and had unintended consequences.

“We had so many specializations at each partner level, with different discounts, it was becoming very complex, and people were making errors,” he said. “Resellers were having the same issues. It was causing fear and hesitancy in putting together bids. When we talked to our own salespeople about it, we found a lot of partners were coming to us to have us help them put bids together because the discounts were different and so complex. Clearly, this wasn’t driving the right behavior.”

Cole said that while they still have six specializations, they significantly reduced the number of discount bands on different products and services, and now, once you get to the second (ADvantage) level of the program, if you have a single specialization, you get the discount rate across all of the products.

“Distributors now only need to know if they are a Registered, ADvantage or ADvantage Plus partner, and they know the discount,” he said.

“It’s not quite that we have mellowed out in giving easier access to products, but since we implemented the original program, we now know that if we simplify things, that may cut down the number of presales support calls that we get,” Cole added. “The feedback from distributors and partners has been positive. We haven’t had one negative comment.”

The annual revenue threshold has been eliminated entirely, while the deal revenue threshold has been halved.

“Partners who hadn’t been able to get the minimum numbers to get special discounts had backed away, and now with the threshold gone, they are re-engaging,” Cole said. “We think if partners are willing to make the investment in getting people trained, they will sell more anyway.”

The changes made to training will make it easier for partners to make that investment. Originally, ADtran did its training through in-person classes in Huntsville.

“The problem was that took engineers out of the field for four days, so even if we waived the cost, there was still concern,” Cole said. “So we created virtual training, and had more success with that even though there was a fee. But we were being asked ‘why can’t we do self-study and test out,’ so now we have made self-study courses an option and they are free of charge.” The Huntsville-based training and virtual training remain for those who want them.