Tips to Increase your VIP43 Rebates!

Hello Cisco Partners,

As expected, Cisco continues to adjust the VIP program as they continue to help Partners transition to selling Solutions over Architecture. This is confirmed in Cisco VIP43 with some new subtracks and others that will be sunset at the end of VIP43. This blog is intended to highlight what is important in this period. For a deeper dive we recommend you request the “Netformx Value Index (NVI) Report for VIP43“ with trending information to help you adjust your selling motions.

Key Things to Know

• The VIP Period is January 28, 2024, to July 27, 2024
• Bookings Started on January 28, 2024
• If you previously enrolled in the Channel Program Incentive Agreement (CPIA) you were auto enrolled if you met the VIP prerequisites.
• Some SKUs appear in multiple tracks where precedent rules will be applied based on your specializations and only give you credit in one track.
  • As you achieve your Solutions track specializations you will be able to increase your rebate potential for selling the same SKUs as they are typically higher.

A Few of the Changes

• The Annuity track had a 20% increase in SKUs from the VIP42 launch in July when compared against the VIP43 SKU list.
• The Solution Track total number of SKUs continue to dominate the 3 tracks.
• These data center architecture specializations are being retired at the end of the Cisco fiscal year: Data Center, Advanced Data Center Architecture, and Master Data Center and Hybrid Cloud.
• Cisco periodically makes changes to the VIP program throughout the period. Netformx tools are adjusted to align with these changes on an ongoing basis, so you will always have the latest information.
• Some segments have added Accelerators to help increase your VIP Benefits

The Recommendations

• Given Cisco’s ongoing strategy, it is important to move your business quickly toward Solutions selling.
• Since VIP41 Cisco’s focus has been to align the program with their desired migration from hardware to software and solutions and from single sales to lifecycle (annuity) sales.
• As Data Center is EOL in the next VIP period, Cisco recommends working with your PAM on how to adjust your selling motions to a different line of business (such as the Cloud offerings in the Solutions Track) to maintain your profitability.
• EA Renewing Incentive is associated with VIP, as you can get an extra 2% on top of standard VIP if booked under EA Renewing as a Bonus.
• Consider the Takeback Incentive for renewing an installed base in a sustainable way. Cisco and other vendors are discounted plus having the products recycled at no cost for the partner and end-customer.
• The Monthly Report was changed to “VIP Consolidated Subtrack Eligible Bookings Report”. However, Netformx ChannelXpert can still provide the Monthly Report.

Shipping Deadline Extensions

Cisco has given Partners a reprieve on VIP 40 and VIP 41 shipping deadlines. They are extending the shipping deadlines to April 27, 2024.

The Netformx Value Index Report

The “Netformx NVI Report for VIP43” is available. Please request your copy at https://netfx.info/NVI. The Netformx VIP Index (NVI) is meant to provide insights on VIP program trends as seen by Netformx and is provided as an informative observation. The insights can arm partners with the information they need to consider where it may make sense to adjust their selling motions.

In Summary

Cisco’s changes to the VIP program align with their strategy to incentivize the sale of digital products, services, and solutions versus on-premises hardware, and to sell to the Business and C-Suite instead of the IT Group. The Solutions track has become Cisco’s major focus and Security plays a dominant role across all tracks. Cisco suggests that Partners put a strong emphasis on taking advantage of accelerators and bonuses to maintain profitability.

If you have questions about other recommendations to adjust your selling motions, please let me know at mike.johnson@netformx.com.

We would love the opportunity to help you to find new ways to increase your VIP43 rebates!