Bring Definitive Validation Into The Importance Of Joint-Marketing Incentives.
Money spent in the channel has never been under such scrutiny as it is today. Channel executives demand the expense of channel marketing investments and activity (Channel Co-op/MDF) to be well justified. Without tangible data that clearly defines the ROI-acquired during each marketing campaign, CEOs and CFOs have little to no reasoning into the continuation of channel marketing investments.
The following set of best practice strategies in Channel Co-op and MDF will help channel-driven manufacturers eradicate the obscurity so commonly found in indirect marketing-ROI, and bring definitive validation into the importance of joint-marketing incentives.
Best Strategies in Channel Co-op and MDF Development
Visibility and Flexibility
- Marketing fund requests and claim forms should be straightforward to enter for partners, and easily reviewed for approval in real-time by channel managers; there should be no mystery behind how fund requests are administered.
- Channel Co-op and MDF balances should be accessible through a centralized online dashboard with administrative views into each partner account for effortless analysis.
- Business rules regarding expiration, timeframes for submission, and proof of performance should be designed with flexibility in mind and simplified to encourage partner compliance.
- Not all channel partners are created equally. Depending on the situation, some solution providers will need a higher volume of assistance, enablement, and motivation.
Forecasting and Reporting
- Reseller and distributor data collection and reporting processes should be streamlined with access to real-time information for immediate insight into marketing fund efforts.
- Partner POS data comes in many different formats (EDI, text files, Excel spreadsheets, zip files, etc.); it is essential your internal system can handle different sources so it can efficiently pull, cleanse and normalize diverse channel POS data formats.
- Make sure that channel program and trade promotion ROI can be constantly tracked and measured to include channel analytics for partner performance. Reporting that supports segmentation by territory, activity type, or product facilitate decision making for forecasting operations.
Checks and Balances
- The Co-op MDF solution should assist you in substantially reducing your overhead and labor costs with upfront validation checks. Submission forms should outline required information and proof of performance items prior to activity execution, to ensure guidelines are followed for the necessary approval.
- The system should include automated email notifications and predetermined hierarchies for routing fund requests. This reduces confusion and time spent on back and forth reviews. Approval hierarchies ensure requests conform to the correct chain of command.
- Online tools that support live data and instant communication expedite the approval processes that older technologies fail to systemize.
- Only use solutions that maintain confidential data security and privacy policies at all times.
- The best level of service will be provided from a fully-hosted, online solution with service level agreements that guarantee instant and secure access, 24/7.
Other Tips and Suggestions
- Channel Marketing funds are often accrued based on revenue, but a zero-based discretionary approach may be a better approach – where the partners with the most credible plan based on a strict ROI model are allocated funds. The overall pot of MDF stays the same, but the returns are better as only the best plans get rewarded with the funds
- Make sure you have the ability to track applicable incentives at the individual sales transaction level; This not only helps avoid process overpayments (to the tune of 10-15% on an average) for duplicate or erroneous claims arising out of overlapping complex and tiered incentives programs but also helps significantly reduce partner disputes.
- Partners that build a strong ROI-case should be eligible for even more than their imputed “earned/accrued Co-op/MDF” (if that is, it is supported).
- Most importantly, if you can’t define a basic ROI business plan and track the result of the marketing spend then it is likely to be a wasted investment.… See more See less