Automated Co-op Marketing Programs Deliver True Results When it Comes to Managing Co-op Funds
We’ve conducted a small-scale study on vendor’s process of managing Co-op funds and came to a conclusion: Co-op marketing 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, implementing, and managing Co-op funds strategy is a drawn-out process with endless flowcharts, corporate strategy, and inevitable disagreements between vendors and their partners. Problems associated with Co-op fund management rely on many different elements and on the strength of your channel partnerships.
Each channel partnership is unique in its own right. There could be a number of possible reasons that cause your channel partners to run into problems.
Reasons such as:
- Marketing experience
- Affiliate participation
- Follow-up/campaign updates
- Reimbursement turnaround
- Manpower to monitor ROI and administrate
- Product training
- Requirements for eligibility
Concerns vendors should address when it comes to re-evaluating their Co-op marketing programs:
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 while helping them with managing Co-op funds had 12 requirements for their Online Advertising PoP:
- All third-party invoices
- Date of advertorial
- Date of campaign
- Digital copy of the ad
- Link to copy of the ad
- List of keywords with their costs
- Link to a landing page
- Screenshot of ad
- Documentation from Project Managers involved
- A report indicating ad’s KPIs
- The 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 on 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 Co-op 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 co-op marketing programs with the more favorable payout or forego participating in the vendor’s program altogether.
There are always other options
Resellers work with a variety of vendors with Co-op advertising 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 marketing strategy will be one that generates more fund utilization and participation.
The channel ecosystem is competitive. Channel conflict, gray market activity, even the amount of partner participation all drills down to the level of complexity within a channel program. So, to make managing your Co-op marketing funds easier, make your program less complex.
Lack of top-of-mind awareness
When partners are notified about issued co-op 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 makes managing Co-op funds complicated. It is difficult to keep your funds top of mind when partners have other funds from other vendors to also be aware of.
Good partner relationships are 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.
5 steps towards improving your Co-op fund management process:
Step 1: Mandate a ‘Right to Audit’ Clause for Eligibility
Each channel partnership that includes a Co-op program (or any channel program) should be subject to further inspection that goes beyond emails, meetings, and phone calls. This Co-op fund management strategy identifies which partners are ‘risky,’ as well as provides insight into how constructively your dollars are being spent.
Step 2: Design Program with Objective Guidelines
A Co-op program without clear and concise parameters is a program destined to fail. It’s imperative that eligibility requirements are clearly stated during the documentation process. Also, provide a start/end date, expectations, consequences for non-compliance, etc.
Step 3: Deploy a Competent Channel Manager
Miscommunication within the indirect sales funnel is one the most common (and damaging) errors vendors/manufacturers make while opting to invest in a Co-op program. Deploying a competent channel manager with extended experience in Co-op fund management for each partnership is essential. This strategy will help you establish b2b success, loyalty, and longevity.
Step 4: Offer Formal Training
Extensive product training should be a mandate for your channel partners. The training should cover product functionality and ‘best go-to-market strategies. Remember, your channel partners should be an extension of your own in-house sales team, not “just another customer.”
Step 5: Marketing Programs Tailored to Each Partner’s Needs
Simply allocating Co-op funds without taking into consideration of marketing strategy is a drastic error in b2b relations. For example, allocating available (or discretionary) funds for a direct mailing campaign may be a lucrative tactic in driving consumers to a ski resort, however, SEO (e.g., keyword advertising) may not provide any traction for the same objective—and be a complete waste of money.
Advantages of Automation when it Comes to Managing Co-op Funds
Much like how automation has proven to generate ROI for inbound marketing strategies, an automated channel can increase partner utilization of Co-op marketing programs while also addressing many of the concerns mentioned in this article with managing Co-op funds.
In conclusion, there are many benefits to automating the methods for managing Co-op funds. 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.