8 Key Variables of Successful *MDF and Co-op Programs

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Information about 8 Key Variables of Successful *MDF and Co-op Programs
Education

Published on March 3, 2014

Author: CCIChannel

Source: slideshare.net

Description

MDF and Co-op programs are a two-edged sword for most channel leaders; they tend to be the lifeblood of channel partner engagement, but can be a headache to manage and measure. Today more than ever, how channel sales and marketing leaders approach MDF and Co-op can literally mean the difference between consistent double-digit growth and corporate decline.

8 Key Variables of Successful MDF and Co-op Programs 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Featured Speakers Steven Kellam SVP, Sales and Marketing CCI Tim Harmon VP, Customer Success Relayware Peter Hornberger Business Development CCI 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Table Setting Goal: • Framework for motivating your channel Remember: • Go back to this presentation as needed 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Agenda 1. Key Trends a) Trends for Channel Vendors b) Trends for Channel Partners 2. Gut Check: Looking back at 2013 3. Optimizing Your Program a) The 8 Key Variables 4. Winners & Losers a) 5 Big Mistakes b) 5 Big Wins 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Part 1: Key Channel Trends Partners and Vendors

Partners’ Revenue Mix Is Changing RESELL GROWTH IS IN CLOUD INFRASTUCTURE AND SOFTWARE Collaborate beyond the enterprise.™ © Relayware, Inc. All Rights Reserved 2014 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Partners Are Frustrated Too much red tape: • Jumping through complicated hoops to get the funds Last minute windfalls: • Vendors release MDFs 2-3 weeks prior to the end of a quarter Constant changes: • Vendors making last minute modifications to marketing plans Random rebates: • Program parameters are often complicated and may change frequently Painful audits: • Performance results and guidelines are often not clearly communicated Collaborate beyond the enterprise.™ © Relayware, Inc. All Rights Reserved 2014 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Channel Evolution and Mix Corporate reseller Direct Distributor Retailer VAR 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Channel Evolution and Mix System Integrators Direct Corporate reseller Cloud Agents Hosting/ Infrastructure Direct Marketers Distributor OEM ISVs MSPs Retailer VAR Solution Providers 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Vendors: Allocating MDF Money Can Be Difficult Percentage of Unspent MDF by Company 27% 40% 15% 18% 1-14% unspent 15-20% unspent more than 25% unspent 0% unspent Source: “MDF Insight: the State of Market Development Funds" from PartnerPath (2013) Collaborate beyond the enterprise.™ © Relayware, Inc. All Rights Reserved 2014 415.472.5100 www.channelmanagement.com info@channelmanagement.com

New Era: Finally ‘Closing the Loop’ on MDF ROI ROI Measurement & Predictive Analytics Partner Scorecarding & Benchmarking Joint Business Planning Systems of record collect partner info & outcomes Joint Marketing Planning & Approvals MDF Fund Allocation and Distribution Point of sale datacreation, collec tion, scrubbing Incent Use of Thru-Partner Marketing Deal Registration Capture Proof of Performance Mktg Campaign Execution (Solo and TPMAs) 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Part 2: Gut Check Looking Back at 2013

2013 Gut Check 1. Program Performance • • • • What were program results? Change from baseline? What was program ROI? Activity levels? Utilization levels? Program operations and support…SLA, Claims, etc 2. Objectives /Elements / Metrics Capture • • • • Were objective(s) clearly defined? Were they the right objectives? Were they carried through your guidelines? Were metrics relating to objectives captured? 3. Program Communication • • • Were program goals agreed to/signed off by key internal stakeholders? Were they communicated to all stakeholders? What was ongoing program communication? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Gut Check: Key Quantitative Metrics Measurement Metric Program ROI • • • Gross profit from program/cost of program Total # of qualified leads generated/cost of program Revenue or new clients per campaign or plan/cost of plan or campaign Marketing Mix • • Dollars spent by marketing activity Dollars spent on “higher value” vs. “lower value” activities Program Utilization • • # of active partners/total # of partners # of users accessing program/tool Fund Utilization • • • • Funds accrued Funds expired Funds outstanding (pending payment) Funds unclaimed Prior Approval Activity • • • Total PAs submitted Total PAs accepted/denied Total Pas on hold Claim Activity • • • Total claims submitted Total claims denied Total claims on hold Program Support • • • Total calls/emails to support desk Response time to calls/emails Time from claim approval to pay out 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Survey for Qualitative Input! Internal Team: On a scale of 15, how helpful is MDF in driving demand? Are you getting the level of reporting you need? How does MDF help you engage with partners? Partners: What are the activities you find most valuable? On a scale of 15, how would you rate approval process on claim? How would you rate the program on ‘ease of use’? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Part 3: Optimizing Your Program 8 Key Variables

Program Structure: Key Variables 1. Program eligibility 6. Reimbursement % 2. Program period 7. Creative requirements 3. How funds are earned 8. Reimbursement method 4. Products promoted 5. Eligible activities 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. Program eligibility • Which channel partners will be offered the program? • Will they all be offered the same program? Robinson-Patman Guidelines: “Competing channel partners must be offered similar programs on a proportionately equal basis.” 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Strong Partner Scorecarding Is Key • Vendors must excel at deciding which partners get MDF, and how much. • Key for future health of the channel and getting maximum return on MDF investment. • Funding based purely on a partner’s past revenue is no longer sufficient. • Evolution away from spreadsheets, toward connected BI, analysis, and dashboard tools. • Information sharing and integration between various channel-related systems is key. 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. Program eligibility 2. Program period • Annual or quarterly are most common • Should align with sales cycle and product/solution seasonality • Do you need a lesser or greater degree of control? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Product Seasonality vs. Program Period 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. Program eligibility 2. Program period 3. How funds are earned • Discretionary or earned accruals? Combination? • Past sales performance or anticipated future performance? • Do the funds roll off or expire at once? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Baseline Definitions Co-op Programs • Marketing allowances are accrued as a percentage of past sales • Guidelines are well defined, with comprehensive proof-of-performance requirements • May require minimal pre-approval requirements fostering ease-of-use • Lend themselves to expense accounting MDF Programs • Discretionary funds, not ‘owned’ by partners • The available funds are often not announced in advance, but are negotiated to achieve specific goals • Often require less complete proof-of-performance documentation than traditional Co-op programs, and pre-approval is required • Lend themselves to contra-revenue accounting 415.472.5100 www.channelmanagement.com info@channelmanagement.com

CCI Vendor Survey: Partner Funding Model What best describes your program funding model(s)? 3% Trend Alert: Movement to MDF (Market Development Funds) 22% 44% Discretionary Accrual per partner 31% Contractually committed Other (please specify) 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Pros & Cons Advantages of Co-op • Better advanced planning as partners • Typically easier to get internal funding/buy-in • Simpler partner experience • Great for more mature markets Advantages of MDF • Greater flexibility, no direct link to ‘sell thru’ by a partner • Flexibility in funding commitments YoY or QoQ • Great for changing markets and new technologies Best of both worlds?  Hybrid Model with both Co-op and MDF 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. 2. 3. 4. Program eligibility Program period How funds are earned Products promoted • Will the accrual or reimbursement level vary with specific products? • Will program target all products/solutions or a subset? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Multi-Vendor Solutions Becoming More Common 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. 2. 3. 4. Program eligibility Program period How funds are earned Products/Solutions promoted 5. Eligible activities • How will the allowed activities support your go-to-market strategies? • How will they support your partners’ go-to-market strategies? • What behaviors will you want to ‘reward’? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

The ‘Consumerized’ B2B Buyer Today’s B2B Buyer • Lengthening ‘getting to know you’ period (marketing) • Shortening ‘making a decision’ period (sales) • Looking for ‘continuum’ vs. ‘episodic’ relationship Impact on B2B Marketing Tactics • Marketer’s key role now is to help buyer get smarter • Content is King, but Context trumps King MDF/Co-op Activities to Focus on • Activities are those that support delivery of ‘thought leadership’ • Key are the vehicles that best support delivery of ‘thought leadership’ 415.472.5100 www.channelmanagement.com info@channelmanagement.com

B2B Marketing Trends Most popular B2B marketing tactics last year (by usage): 1. 2. 3. 4. 5. Article Posting (79%) Social Media (74%) Blogs (65%) eNewsletters (63%) Case Studies (58%) 6. 7. 8. 9. In-Person Events (56%) Videos (52%) White Papers (51%) Webinars/Webcasts (46%) Most effective B2B marketing tactics last year: 1. 2. 3. 4. 5. 6. In-Person Events (78%) Webinars/Webcasts (70%) Case Studies (70%) Videos (61%) eNewsletters (60%) White Papers (60%) 7. Blogs (58%) 8. Microsites (56%) 9. Articles (51%) 10. Social Media (50%) Source: Marketing Profs, Content Marketing Institute 415.472.5100 www.channelmanagement.com info@channelmanagement.com

B2B Marketing Trends • Social media continues to grow in importance: o 61% more marketers perceive social media as being effective last year than year before • 86% of decision makers use social media for business purposes. • The largest challenge of B2B marketers is “producing the kind of content that engages prospects and customers.” o 60% of respondents indicate they plan to increase their content marketing budgets over the next 12 months Source: Forrester, Marketing Profs, Content Marketing Institute 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. 2. 3. 4. 5. 6. Program eligibility Program period How funds are earned Products/Solutions promoted Eligible activities • To what extent do you want Reimbursement % to reward certain behaviors? • Or discourage others? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Tactical vs. Strategic Metrics Tactical Metrics (Contribute to Business Drivers) Strategic Metrics (Business Drivers) EXAMPLES: EXAMPLES: • • • • • • • • • Number of responders Number of leads Event attendees Number of proposals Number of demos given/units place Awareness Interest Number of new clients Sales Value Sales Units Reference Accounts Desire (Trans-) Action Activities: • Direct Mail • Email • Advertising • Customer Event • Telemarketing • Demo/ Eval. Unit • SPIF/ Sales Incentive Metrics: • Responders • Leads • Attendees • Appointments • Units Placed • Proposals • Opportunities created • Units sold • Sales value • Opportunities closed 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Standardize Your Tactical Metrics   Advertising Online    Direct Mail        Quick Win: Standardizing data format (and compliance) key to   insights on ROI across campaigns Demo Equipment Marketing Collateral Newsletters   Seminar Events Telemarketing  Proposals/ Opportunitie s # of Units Placed Qualified Leads  Sales Presentation s Attendees Responders Impressions Advertising: Print/ Broadcast METRICS BY ACTIVITY TYPE       Tradeshows Training  Webcasts     415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. 2. 3. 4. 5. 6. 7. Program eligibility Program period How funds are earned Products/Solutions promoted Eligible activities Reimbursement % • Brand adherence Creative requirements requirements for funding? • Will you provide execution tools? Or, provide special incentives for use of your tools? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

The Rise of Through Partner Marketing Agencies TPMA benefits: • Protect your brand by ensuring proper campaign protocols and standards • Make is easy for the partner to execute marketing • Provide objective, reliable marketing outcomes data • Remove need for proof of performance complexity 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Program Structure: Key Variables 1. 2. 3. 4. 5. 6. 7. 8. Program eligibility Program period How funds are earned Products promoted Eligible activities Reimbursement % Creative requirements Reimbursement method • How will you reimburse efforts? Cash? Credit? And what currency? • Should the method be consistent across all partner segments? 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Partner-Centric vs. Program-Centric Reimbursements Key Question: Who absorbs the fluctuation in currency value? Partner-Centric: • Partner is reimbursed in their local currency. • Vendor absorbs the fluctuations in currency value. Program-Centric • Partner is reimbursed based on the currency of the program owner. • Partner absorbs the difference in currency value. 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Part 4: Winners and Losers Common Execution Errors & Quick Tips

Top 5 Mistakes by Major Channels in 2013 1. Not defining MDF success – Vendors settling for no or limited ROI visibility on MDF spend 2. Thru-partner marketing launch flops – Not incentivizing partner use of PTMA offerings with incentive rewards/points 3. Limited planning process – No platform for joint marketing planning & approvals…recorded via email or not at all 4. Poor partner segmentation – Partner scorecarding if done, still settling for limited data 5. System silo-ing – Inadequate data sharing between key points in the MDF lifecycle…creates inefficiency and bad decisions 415.472.5100 www.channelmanagement.com info@channelmanagement.com

What the Winners Did in 2013 1. “Year of the partner” – Truly partner-centric channel vendors who make partner engagement easy, simple, and rewarding 2. Behavior modification – Vendors who move beyond rewarding based purely on past revenue performance, to ‘soft targets’ that drive new sets of behaviors 3. Key measurements – Accountability around ROI, scorecarding 4. Single pane of glass – Created single view for partners and administrators 415.472.5100 www.channelmanagement.com info@channelmanagement.com

Thank You! Questions? Guidance • Program Design • ROI Measurement • Technology Evolution Software • MDF • Incentives: SPIF, Rebates, Loyalty • Joint Planning Admin • Follow-the-Sun Support • Claims Auditing • Global Payments Steven Kellam SVP, Sales and Marketing CCI steven.kellam@channelmanagement.com Tim Harmon VP, Customer Success Relayware tim.harmon@relayware.com Peter Hornberger Business Development CCI peter.hornberger@channelmanagement.com 415.472.5100 www.channelmanagement.com info@channelmanagement.com

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