Channel Partner Co-op MDF Programs and the Unused Channel Marketing Funds Dilemma.
Every year, a report comes out estimating the amount of unused channel marketing funds. The number typically fluctuates in the billions. Billions. This means that vendors are allocating hundreds to thousands of marketing dollars to their channel partners who don’t even apply the funds towards any marketing. In some cases, vendors have considered completely slashing their Co-op MDF programs altogether.
But why?
So, should vendors blame their partners’ gross incompetence for not participating within the given timeframe of program eligibility? Or, should channel partners point the finger at their vendor, and condemn the inadequate definition of their deployed incentive?
The answer to that question is: It’s complicated.
But first, let’s take a look at some facts before you throw more effort into an incentive program that would yield less than desirable results?
Co-Op and MDF Programs from a Partner’s Perspectives
To have a deeper understanding of the process, let’s shift our viewpoint to the partner perspective. Although reasons vary by industry, there are five recurring issues that explain why partners don’t take advantage of Co-op MDF programs.
1- Unaware of Funds
They just aren’t aware that these funds are available. When vendors provide vague reporting and obscure guidelines It becomes difficult to get a clear idea of what kind of money is available.
2- List of Rules
Partners feel so pressured to be in compliance with their vendors’ laundry list of rules. This feeling is similar to the way most of us feel about mail-in rebates. This is where retail outlets bank on the fact that you’ll never follow their process all the way through. Both of these issues will negatively alter your partners’ perception of the trustworthiness of your company.
3- Too Generic
Many channel partners have grown an immune distaste towards Co-op MDF programs. Case studies, press releases, Facebook posts, direct mail, blogs, dinners, and events can only go so far. In order for your channel partner to interpret your MDF and Co-op program as a lucrative opportunity, it must dazzle with a fresh appeal, a relevant angle, and an exciting end result.
4- Lack of Strategy
It has become all too common for vendors to offer their partners with Co-op MDF programs and incentives that are irrelevant to what they’re trying to achieve. Therefore, if you want to provide lucrative awards, tailor and uniquely customize them to fit partners’ needs. Interview and consult with partners. Actively listen to their pain points in marketing. What strategies have or haven’t they tried? Which has provided them success, which has not?
In other words:
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- Research – partners’ goals, tribulations, value proposition, and bottom-line.
- Blueprint – marketing tactics according to data aggregated.
- Personalize – based on location, market segmentation, industry, approach, and angle of the campaign.
- Strategize – marketing positioning, program timeframe, and allocation of necessary resources
- Deploy – program
5- Ineffective Product Training
Sure, your channel partners understand what your product does and how it might help eradicate pain points for end-users.
The more you explain the product’s functionality and provide best practices marketing (indirect/direct strategies), the better chance you will have at enthusing partners to participate and use Co-op MDF incentive dollars. Ultimately, the more they know about your product, the more they will be able to implement creativity into their marketing efforts and strategize enticing campaigns that necessitate incentivized funds.
The Unused Channel Marketing Funds Dilemma
So many vendors scratch their heads in confusion at their partners’ lack of traction when it comes to marketing. However, this isn’t always the case. In honest truth, it’s because most organizations simply have no idea that they have Co-op MDF programs or marketing funds, to begin with. At some point within the distribution chain, there was a miscommunication between vendor and partner such that the partner was unaware that co-op marketing or market development funds were being credited towards their marketing budget.
The solution?
Let your partners know.
Simple enough? Maybe not.
The issue with an email is that it’s time-sensitive. As your email gets buried under the onslaught of new messages, your partners are less likely to review it. Therefore, to avoid facing unused marketing funds, vendors need a practical way to stay top of mind. One such solution would be automated reminder emails. These emails should be detailing fund expiration. Vendors need to dedicated an account manager to assist partners with campaigns. In addition, they will need a portal to constantly remind their partners that there are unused marketing funds available.
Most partners have more than one channel Co-op MDF program offered to them. This adds an additional layer of complications since they don’t necessarily have the resources to spread themselves so thin. In this situation, vendors should simplify their Co-op MDF programs, such that partners will be able to create marketing campaigns seamlessly. Not only does this increase the likelihood of partners adopting your Co-op MDF program, but it also attracts more partners from your competitors who may possess a more restrictive marketing fund program.
Make your Program Easy to Monitor, Track, and Deploy
Your partners, especially smaller organizations with no dedicated marketing team will find it difficult to be able to tackle every vendor’s Co-op MDF programs. By making your program easy to monitor, track, and deploy marketing campaigns, your resellers will be naturally drawn to your channel Co-op MDF programs. The same can be said for a vendor’s proof-of-performance process.
You may notice a decrease in partner participation if your proof-of-performance process requires partners to submit multiple forms or to re-submit documents to various departments. If a vendor continues to deploy complex rules in their marketing program, it shouldn’t be a surprise to notice partners’ interests begin to subside.
With that being said, smaller channel partners don’t have the time or resources to abide by every rule of your Co-op MDF program. Therefore, the best strategy would be to keep things as simple as possible. This often means cutting out unnecessary fields, hoops, and hurdles for your partners. Vendors really have to make an effort to simplify their partner program. Whether it be their deal registration criteria or claim management process.
Another solution to address the unused channel marketing funds dilemma would be to roll out pre-approved marketing templates. These templates should enable partners and resellers to easily create and execute marketing campaigns.
