NICE Partner Commission Changes 'Not as Bad as We Thought'

Changes to NICE's compensation models may not have been "as bad as we thought."

So says Rise Technology Advisors co-founder Eric Ludwig and NICE partner who was briefed on the matter.

"What I have learned is that we only have visibility as technology advisors (TAs) into small components of technology services distributor (TSD) contracts with vendors, and typically what TSDs will tell us is that they conform with specific guidelines," Ludwig said.

That is, to ensure compliance with said contracts.

"As an advisor, we learn the high level but rarely know the fine details of these agreements unless we have a problem," Ludwig told Channel Futures; hence, the ensuing uproar after NICE shifted to its commission model around discounting.

Rise's Eric Ludwig

The vendor raised a formal process to inform partners if direct sales teams reach a certain threshold of discounting, meaning if discounting goes into "the red," NICE may reduce the commission it provides to sales agents involved in the same deal.

Ludwig said that boils down to keeping TAs engaged regarding their client growth and with elements such as add-ons and upgrades.

"Renewals, [NICE] has told us, 'You're good. You bring us a client, we will honor that renewal," the NICE partner told Channel Futures. "What's different now is that after a couple of years, NICE will ask a TA to be knowledgeable and engaged to know there is a new project or growth on an existing project. And I think they are doing that because there are TAs who throw opportunities over the fence, and then they're on to the next one."

Related:NICE TSDs, TAs, Could Earn Less Under New Compensation Model

He insists that NICE wants longer-term partnerships, "so they did so by putting that in writing. I didn't know about what kind of terms they had in the past, but this sounds a lot more similar to how they used to operate," Ludwig said.

NICE Partner: 'Not Unusual to Ask TAs to Be Engaged'

NICE isn't the only vendor making this kind of ask, nor will it be the last, Ludwig said, and that is what all TAs should be doing.

Ludwig, too, believes that TAs should be there for quarterly meetings and do everything from implementation to the nitty-gritty work that vendors often rely on partners to handle.

"They aren't looking for churn and burn," Ludwig said.

There is another element to the equation that is equally important, Ludwig said, noting that NICE contracts include decelerators.

"There is an expectation within the channel as margins compress due to competitive scenarios, we all share in that margin compression," Ludwig said, while offering a rationale for the action.

"Some of that is understood based on how we go to market, as it is typically a one-off for most suppliers, and you get larger engagements, you usually see market compression, which everyone shares in," Ludwig said.

What's most important, Ludwig shared, "and what I have learned from the last few weeks of conversation, is that those advocating for customers and engaging with them will not get drastically impacted if they anchor to clients, sales teams and remain an active part of the process," he said.

If you do this, Ludwig said, you likely have little to worry about. The vendor's responsibility comes in the fact that it "needs to do a better job at articulating changes" when things like this occur, which impact such a pivotal extension of one's salesforce.

We reached out to NICE and did not hear back by time of publication.