Are your Channel Partners Opting-Out of Co-op/MDF Opportunities?
In this three-part blog series, we will explore the various ways in which manufacturers can better implement Co-op/MDF for channel partners. The following information is intended to provide practical insight into how manufacturers leverage Co-op/MDF to achieve business transforming results.
Each year, manufacturers spend billions of dollars into creating Co-op and MDF opportunities for channel partners. Disturbingly, however, nearly half of incentive fund opportunities go unused.
That is a significant amount of money.
There are many suggestions as to why channel driven producers and manufacturers fail to motivate their partner network with co-marketing opportunities. Certainly, providing rationale into this subject is relative to the situation (i.e., marketing experience, labor, financial stability, etc.). However, our research concludes that nearly all Co-op and MDF incentives opportunities that fail possess the following:
Why are channel partners opting-out of Co-op/MDF opportunities?
- Not properly on boarded
- No clear path of participation
- Wrong partner contact approached
- Poor customer service
- Too much paperwork
- Too many things are asked (information to be entered)
- Process is too cumbersome
- Not enough manpower
- Fear of not being reimbursed
- Slow reimbursement turnaround
- Upfront costs too high
- Claims submission process is obscure
- Rules are too complicated
- Vague parameters
- Intimidating rules due to legal verbiage
- PO/audit trail is not enforcing the right documentation
Let us explore the various way manufacturers can build an attractive, effective incentive that is mutually beneficial, creates synergy and establishes a strong program foundation.
Building a Sustainable Co-op MDF Program
Arguably, the most important component to a successful Co-op MDF program is transparency in program guidelines.
This is the heart of your program.
In order to facilitate sustainable (channel) growth, every aspect of your opportunity needs to be concise, clear and objective.
This includes, but is not limited to:
- What you are (or not) funding
- How reimbursement is earned
- Percentage breakdown of reimbursement for activities
- Requirements for submitting a claim
- Prohibited activities
- Eligibility requirements
- Reimbursement (cycle times) expectations
- Ex. Once partner submits a claim, audit period may take up to four business days. Once audit clears, reimbursement should take approx. one week.
Your Co-op/MDF program should act as a living breathing document (that changes based on what is/is not working).
Rarely (if ever) will your Co-op/MDF program be 100% flawless.
Complacency or perfection in program design should not be your goal. Instead, constant and never-ending improvement should be your philosophy in terms of how you approach Co-op MDF program implementation.
Channel partners will most likely perceive improvements at every iteration as being best in class.
Ultimately, expecting the unexpected is you vital to cultivating sustainable successful incentives. The better thought out and documented your program is, the more kindly and consistently exceptions and disputes can be handled.
Take away the mystery and set the expectations for channel partners.
Set Benchmarks from the Experience of Other Manufacturers
A strong MDF program is going to have a strong set of metrics behind it. Often times, when you are building your program, you do not have metrics established yet.
The best way to establish those metrics is to benchmark manufacturers like yours that have programs already in place.
It is important to know that you do not have to measure benchmarks from direct competitors, but instead, companies that share the same go-to-market strategy. That is because their partners likely share the same challenges as yours do.
Measure the program from the detail level so you can report to C-level management with confidence and evidence to support your process.
Part 2 of this three-part blog series, we will delve into specific solutions for achieving partner engagement, developing ongoing relationships and utilizing brand ambassadors to your strategic advantage.