• Vendor and Partner Preferences for Channel Incentive Programs Are Mis-Aligned

    A new worldwide study by channel consultant CCI revealed a surprising disparity between vendors and channel partners about the type of incentive programs that work and have value.  For example, vendors believe ROI is the biggest problem with MDF programs while resellers cited excessive administration. The study contains rich data and extensive charts based on responses from 150 vendors and 502 resellers.

    The use of incentive programs to promote and reward channel behavior is widespread and critically important as expressed by vendors and channel partners alike, though disparate perceptions are inhibiting success of programs overall.  Some highlights of the study:

    Overall

    Analytics are a major concern for channel marketers when it comes to evaluating ROI: Isolating contributions from each program to gauge ROI is of growing concern for channel marketers as resources tighten (money and human capital alike).  Because of the variety of programs offered by vendors, any one channel partner can participate in multiple programs offered by that vendor. By implication, these channel partners are participating in a number of similar programs offered by several vendors. This requires an increasing level of administrative burden on partners who lack the resources to both understand and manage the plethora of programs available to them. Vendors have to consider ease of administration and overall program “fit” with their partner’s go-to-market strategy before they design and launch a program.

    Co-op/MDF Programs

    There seems to be a love/hate relationship with these promotional allowance programs at the vendor level, yet partners believe this is the most important program offered to them of all vendor-sponsored incentive programs. This is an indication that the programs offered by the vendors are considered a cost of doing business rather than a strategic marketing tool. Vendors who feel this way should clearly review their program guidelines, activities, administrative processes and ROI criteria to ensure their program is designed to optimize the go-to-market needs of the vendor and partners alike.

    Operationally, vendors also need to streamline operations and expedite processes. For most programs, partners have to pre-pay for all activities and cash flow is the number one need for most (small) businesses. Streamlining operations and expediting payment processes (less than 30 days) will greatly contribute to the program’s appeal, thereby contributing to improved levels of partner participation.

    Deal Registration

    These programs became the fulcrum for channel marketing programs in the B2B industries throughout the early 2000s. Yet it seems that their perceived value and impact has somewhat faded for vendors and channel partners alike. There are two potential reasons for this: 1) the pervasive offering of the program by vendors has diffused the value of these programs as a differentiator, or 2) they have lost focus and simply turned into another incentive program, but one which requires more administration than others with less perceived benefit.

    The scoring and comments provided by vendors and partners alike indicate that they may not be worth the current expense for either partners or vendors. Perhaps it is time for vendors to evolve their programs based on company and category needs to ensure the program is perceived as offering mutual benefit.

    Also a possible contributor: despite the initial intent of these programs to minimize channel conflict, many channel partners question their value in doing so, and indeed are still concerned with their vendors taking registered deals direct.

    Social Media

    Partners are not yet universally embracing social media as a sales and marketing vehicle but all trends indicate this is on the rise.  Vendors who are interested in assisting their partners with social media should have a clear social media strategy, and provide their partners with content and guidelines for social media utilization that aligns with their own social media strategy.

    At this point, including social media as an approved activity within the context of published Co-op/MDF guidelines is pre-mature, as these programs are really designed to reimburse partners for hard costs related to program execution –and that is hard to universally quantify. However, social media programs can be funded as an “exception” (where allowed) if the value of the effort warrants it, or if it is part of a larger marketing initiative. In those cases, it is recommended that the vendor follow through on results, and use that instance as a foundation for social media best practices to share with its partner community.

    Joint Marketing Planning

    The practice of Joint Marketing Planning (JMP) is on the rise, but all partners and all vendors are not currently beneficiaries. The appeal of JMP is that it is an ideal means to help track partners through the lifecycle, as well as to ensure that the vendors’ investment in time and money is optimized for mutual benefit.

    For JMP to actually work, partners have to believe that there is a benefit for them and that the process is not just another administrative exercise. Clearly, partners are seeking sales and marketing assistance, and vendors and partners alike don’t believe that the vendor-provided Marketing Resource Centers are effective. JMP can be a very effective tool to provide sales and marketing assistance, tailored to the unique needs of each participating partner.

    Link here for complete CCI study:  “Channel Incentive Study-B2B Technology Industry,”

    CCI delivers comprehensive incentive solutions to optimize sales channel performance. As an enterprise software and services solutions provider, CCI enables channel marketers to manage and measure sales and marketing incentive programs throughout their demand chain, resulting in greater spending efficiency and improved program effectiveness. CCI is proud to work with market leading companies in technology, telecommunications and entertainment such as Autodesk, Qwest, SonicWall, VMWear, Toshiba and many more. For more information, visit www.channelmanagement.com.

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    Vendor and Partner Preferences for Channel Incentive Programs Are Mis-Aligned, 5.0 out of 5 based on 1 rating
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