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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.
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Featured Speakers
Steven KellamSVP, Sales and MarketingCCI
Tim HarmonVP, Customer SuccessRelayware
Peter HornbergerBusiness DevelopmentCCI
Table Setting
Goal:
• Framework for motivating your channel
Remember:
• Go back to this presentation as needed
Agenda1. Key Trends
a) Trends for Channel Vendorsb) Trends for Channel Partners
2. Gut Check: Looking back at 2013
3. Optimizing Your Programa) The 8 Key Variables
4. Winners & Losersa) 5 Big Mistakesb) 5 Big Wins
Partners and Vendors
Part 1:
Key Channel Trends
Partners’ Revenue Mix Is Changing
Collaborate beyond the enterprise.™ © Relayware, Inc. All Rights Reserved 2014
RESELL GROWTH IS IN CLOUD INFRASTUCTURE AND SOFTWARE
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
Channel Evolution and Mix
Vendor
EnterpriseDirect
SMB/SME
Home Micro
Corporate reseller
Distributor
VARRetailer
Channel Evolution and Mix
Vendor
EnterpriseDirect
SMB/SME
Home Micro
Corporate reseller
Distributor
VARRetailer
ISVs
Cloud Agents
System Integrators
Direct Marketers
MSPs
Hosting/Infrastructure
OEM
Solution Providers
Vendors: Allocating MDF Money Can Be Difficult
40%
18%
15%
27%
Percentage of Unspent MDF by Company
1-14% unspent 15-20% unspent more than 25% unspent 0% unspent
Collaborate beyond the enterprise.™ © Relayware, Inc. All Rights Reserved 2014
Source: “MDF Insight: the State of Market Development Funds" from PartnerPath (2013)
Partner Scorecarding & Benchmarking
Joint Business Planning
Joint Marketing Planning & Approvals
MDF Fund Allocation and
Distribution
Incent Use of Thru-Partner
Marketing
Mktg Campaign Execution (Solo
and TPMAs)
Capture Proof of
Performance
Deal Registration
Point of sale data- creation,
collection, scrubbing
Systems of record collect partner info &
outcomes
ROI Measurement & Predictive
Analytics
New Era: Finally ‘Closing the Loop’ on MDF ROI
Looking Back at 2013
Part 2:
Gut Check
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?
Gut Check: Key Quantitative MetricsMeasurement 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
Survey for Qualitative Input!
On a scale of 1-5, how helpful is MDF in driving demand?
Are you getting the level of reporting
you need?
How does MDF help you engage with partners?
What are the activities you find
most valuable?
How would you rate the program on ‘ease of use’?
On a scale of 1-5, how would you rate approval
process on claim?
Internal Team: Partners:
Part 3:
Optimizing Your Program
8 Key Variables
Program Structure: Key Variables
1. Program eligibility
2. Program period
3. How funds are earned
4. Products promoted
5. Eligible activities
6. Reimbursement %
7. Creative requirements
8. Reimbursement method
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.”
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.
Program Structure: Key Variables
1. Program eligibility2. 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?
Program Structure: Key Variables
1. Program eligibility2. Program period3. 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?
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
CCI Vendor Survey: Partner Funding Model
44%
31%
22%3%
What best describes your program funding model(s)?
Discretionary
Accrual per partner
Contractually committed
Other (please specify)
Trend Alert:Movement to MDF (Market Development Funds)
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
Program Structure: Key Variables
1. Program eligibility2. Program period3. How funds are earned4. Products promoted
• Will the accrual or reimbursement level vary with specific products?
• Will program target all products/solutions or a subset?
Program Structure: Key Variables
1. Program eligibility2. Program period3. How funds are earned4. Products/Solutions
promoted5. 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’?
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’
B2B Marketing Trends
Most popular B2B marketing tactics last year (by usage):
Most effective B2B marketing tactics last year:
Source: Marketing Profs, Content Marketing Institute
1. In-Person Events (78%)2. Webinars/Webcasts (70%)3. Case Studies (70%)4. Videos (61%)5. eNewsletters (60%)6. White Papers (60%)
7. Blogs (58%)8. Microsites (56%)9. Articles (51%)10. Social Media (50%)
1. Article Posting (79%) 2. Social Media (74%) 3. Blogs (65%)4. eNewsletters (63%)5. Case Studies (58%)6. In-Person Events (56%)
7. Videos (52%)8. White Papers (51%)9. Webinars/Webcasts (46%)
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
Program Structure: Key Variables
1. Program eligibility2. Program period3. How funds are earned4. Products/Solutions promoted5. Eligible activities6. Reimbursement %
• To what extent do you want to reward certain behaviors?
• Or discourage others?
Tactical vs. Strategic Metrics
• Direct Mail• Email• Advertising
• Responders• Leads
• Customer Event • Telemarketing
• Attendees• Appointments
• Demo/ Eval. Unit
•Units Placed•Proposals•Opportunities created
• SPIF/ Sales Incentive
• Units sold• Sales value• Opportunities closed
Activities:
Metrics:
Awareness Interest Desire(Trans-)Action
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
• Number of new clients• Sales Value• Sales Units• Reference Accounts
Standardize Your Tactical MetricsMETRICS BY ACTIVITY TYPE Impre
ssionsResponders
Qualified Leads
Attendees
Sales Presentations
# of Units Placed
Proposals/ Opportunities
Advertising: Print/ Broadcast Advertising Online Direct Mail Demo Equipment Marketing Collateral
Newsletters Seminar Events Telemarketing Tradeshows Training Webcasts
Quick Win:
Standardizing data format (and compliance) key to insights on ROI across campaigns
Program Structure: Key Variables
1. Program eligibility2. Program period3. How funds are earned4. Products/Solutions promoted5. Eligible activities6. Reimbursement %7. Creative requirements
• Brand adherence requirements for funding?
• Will you provide execution tools? Or, provide special incentives for use of your tools?
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
Program Structure: Key Variables
1. Program eligibility2. Program period3. How funds are earned4. Products promoted5. Eligible activities6. Reimbursement %7. Creative requirements8. Reimbursement
method
• How will you reimburse efforts? Cash? Credit? And what currency?
• Should the method be consistent across all partner segments?
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.
Common Execution Errors & Quick Tips
Part 4:
Winners and Losers
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
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
Thank You! Questions?
Steven KellamSVP, Sales and [email protected]
Tim HarmonVP, Customer [email protected]
Peter HornbergerBusiness DevelopmentCCI [email protected]
Guidance
•Program Design
•ROI Measurement
•Technology Evolution
Softwar
e
•MDF•Incentives
: SPIF, Rebates, Loyalty
•Joint Planning
Admin
•Follow-the-Sun Support
•Claims Auditing
•Global Payments
