Co-op and MDF Programs are no Walk in the Park
We’ve conducted a small-scale study on vendor’s Co-op/MDF process and came to a conclusion: Co-op/MDF programs are no walk in the park. As with any marketer’s dilemma, the struggle is with ROI. When 50% of funds are recirculated back to the vendor, ROI can be a tough metric to prove.
Planning and implementing a Co-op/MDF strategy is a drawn-out process with endless flowcharts, corporate strategy, and inevitable disagreements between vendors and their partners. The following are some concerns vendors should address when it comes to re-evaluating their channel marketing strategy.
Difficult Proof of Performance
I can’t stress enough about the simplification of any proof-of-performance process. I consider many proof-of-performance processes at the same level of difficulty as a customer rebate program. Meaning lots of documenting, headaches, and time wasted for only the possibility of approval and reimbursement.
One company I encountered had 12 requirements to their Online Advertising PoP:
- All third-party invoices
- Date of advertorial
- Date of campaign
- Digital copy of ad
- Link to copy of ad
- List of keywords with their costs
- Link to landing page
- Screenshot of ad
- Documentation from Project Managers involved
- Report indicating ad’s KPIs
- Script of audio/media files used
- Details of contacts captured (Excel only)
Why so many elements!? I can already spot 5 items that can be removed for sheer redundancy.
Look at it from a partner perspective. Most resellers have 15-25 employees thus lack the administrative bandwidth than their larger counterparts. In smaller organizations, every employee is critical to the business’s day-to-day operations and overall success. If one employee goes on sick leave, the roles and responsibilities will fall onto other employees (in addition to managing their own set of responsibilities). A difficult PoP may be too cumbersome and time-consuming for smaller organizations with limited administrative bandwidth.
Small biz, small budget
Small businesses operating day-to-day don’t have the funds to pay for marketing campaigns in advance of reimbursement. In order to avoid being faced with a large debt for 30 days which is the industry average on fund reimbursement, most partners prioritize programs with the more favorable payout or forego participating in the vendor program altogether.
There are always other options
Resellers work with a variety of vendors with Co-op/MDF programs that come in all shapes and sizes. When provided with a variety of options, resellers are more likely to participate in the simplest programs that require the least amount of hurdles. If vendors want to entice their channel partners, a simplified Co-op/MDF strategy will be one that generates more fund utilization and participation.
The channel ecosystem is competitive. Channel conflict, grey market activity, even the amount of partner participation all drills down to the level of complexity within a channel program.
Lack of top-of-mind awareness
When partners are notified about issued funds, they are typically notified by phone calls and personal emails from their territory manager.
The trouble with this route of notifying partners is that it’s difficult to keep your funds top of mind when they have other funds from other funds to also be aware of.
Good partner relationships is the key to top-of-mind awareness. A satisfied partner will be more willing to engage with vendors who provide instant gratification when claims are submitted.
Advantages of automation
Much like how automation has proven to generate ROI for inbound marketing strategies, an automated channel can increase partner utilization of Co-op/MDF while also addressing many of the concerns mentioned in this article.
In conclusion, there are many benefits to Co-op/MDF automation. One of the most acclaimed benefits is the ability to make strategic decisions based on current and past performances in addition to data that reflects true ROI.