Friday, October 19, 2012

Why aren’t MDF funds being used to fund social media activities?

Through Partner Marketing can be tricky for vendors and they often have trouble running successful MDF and co-op programs that drive additional channel revenue. According to Hubspot’s “2012 State of Inbound Marketing Report” the cost per inbound lead (social media, blogging, SEO) was 61% lower than that of an outbound lead. In a world where Facebook, Twitter and LinkedIn have more than 1.5 billion users, why aren’t partners using more MDF funds for social media activities?

I see three major challenges as contributors to this:
  1. Partners must first know how to access and use their MDF funds
  2. Partners need to understand social media and how they can benefit
  3. Vendors need to provide more pre-packaged options that include social media activities
Most vendor’s offer activities and collateral that can be funded by MDF but most of the options are still tied to more traditional offerings – email, direct mail and in-person events. Embracing the power of social media can provide partners with a new way to reach their customers that can be integrated with traditional offerings.

At this point, most people recognize that social media can be a positive force that delivers leads for far less cost than outbound marketing, like trade shows, telemarketing and direct mail. And despite research showing that 95% of companies wanted to increase social media spend in 2012, many companies are still not putting their full effort behind social endeavors. Several factors contribute to the lackluster efforts keeping companies from delving into social media. For some it may be that they don’t feel competent dealing with social media, while others may think that the development and the maintenance of a social media program will require too much time and effort. These are legitimate concerns but should not prevent companies from gaining customers and driving increased revenue through social efforts.

If your partners are still apprehensive about using social media, try these five tactics to get them engaged in promoting your solutions through social media:
  1. Include social media activities in your standard MDF/Co-op programs – better yet, offer a higher reimbursement value than you do for traditional media activities
  2. Source a social media service provider that has a proven track record of providing services directly to partners on the vendor’s behalf
  3. Provide training on social media benefits and solutions directly to your partners
  4. Provide training on social benefits and available solutions directly to your field and offer individual rewards for convincing partners to get involved in social media
  5. Include a concierge service in your MDF/Co-op programs, so unsure partners can contact someone for direct help
Using these strategies will help you quell partner concerns and establish new, cost effective ways to generate leads.

Thursday, May 31, 2012

Through Partner Marketing – Marketing Automation alone is not enough

Many of our clients are wrestling with how to best enable partners to design and execute better co-marketing campaigns. With the advent of new media channels, the range and type of marketing activities available has grown exponentially from the early days of direct mail, email and advertising. We view Through Partner Marketing as being grouped into the following areas: 

1.  Corporate assets are packaged materials available for download that partners can use along with their own means to execute campaigns.

2.  Marketing automation includes items that are traditionally automated and available online via software and usually do not require a third party services company to deliver the customized piece. They can be downloaded and executed by the partner using their own means.

3.  An Agency Network is a single agency or network of agencies clients can engage to deliver tailored solutions that are usually provided via services directly to the partner.

In terms of Through Partner Marketing, the maturity curve moves in the 1-3 order, with clients usually starting with downloadable assets, adding marketing automation and then eventually offering an agency network for the full marketing suite. Best in class clients layer in a marketing concierge service help-desk, focused partner/CAM marketing training and enable MDF/Co-op funds to be spent directly in the agency network.

Through Partner Marketing – the Marketing Automation fallacy

Marketing automation of corporate marketing is top of mind for many and there is a large, rapidly growing group of software companies in this space.

However, marketing outreach through partners requires a very different approach than what works for corporate marketing. There is an extra step on the way to the end customer, as Partners are expected to co-brand, embed and repurpose marketing content before it gets to the end customer. This step makes a direct translation from corporate Marketing Automation tools to partner marketing entirely inappropriate.

If you have (or want to have) significant revenue moving through the channel, you need a partner-centric approach that includes more than marketing automation.

The simple fact is that marketing automation vendors cannot provide the full set of capabilities necessary to effectively manage Through Partner Marketing. There are a number of key capabilities to consider when implementing Through Partner Marketing:
  • Management of traditional MDF and Co-op spend in a seamless partner experience
  • Allowance of third party service providers (Agency Network)
  • Seamless integration of the Marketing Automation and Agency Network “ordering” process with MDF requests and Co-op dollars
  • Closed loop reporting that is standardized across MDF/Co-op, Marketing Automation and the Agency network
  • Partner rating of the marketing plays from the Agency Network
Enabling Through Partner Marketing requires a dedicated solution, coupled with key services from a network of professional agencies.

Friday, May 4, 2012

Clouding the Importance of Incentives in the Channel

One essential area that is undergoing change in the channel is in the area of incentives, in part due to rapidly changing business models ushered in by the Cloud.  The Cloud is way too overused and can mean many different things depending on the audience.  For this post, let's focus on partners that are faced with needing to move to re-occurring versus transaction revenue models.

Incentive programs are important because in the channel, employees at the point of impact are not employed by the vendor company and are not going to share the same level of commitment unless given an incentive to do so.

In addition, incentives drive incremental channel revenue and profit, encourage new solution adoption with partners, establish a competitive differentiation for your channel program, and increase partner loyalty. In short, incentives programs strengthen vendor relationships with partners.

Whether a vendor is selling traditional software or hardware — or is expanding their solution set with more services offerings — incentives remain key to channel success. Traditional transaction-based revenue models are giving way to recurring revenue models: vendors know this and partners know this. In a Darwinian channel, those that adapt, survive. That means we are seeing more partners with multiple revenue streams — both transaction-based and subscription-based — as they begin to morph their business model.

How should incentives programs adapt to the changing landscape?

First, incentives programs need to reward partners on the true value of a sale. Incentives programs are designed to drive positive partner behavior, strengthen loyalty and ultimately, increase sales. The recurring revenue model doesn’t change these goals, however, the methods used to influence behavior need to be adapted. Rewarding partners throughout the entire partner lifecycle is an effective way to capture their attention, maintain engagement, as well as promote and drive revenue.
Partners should be incentivized for subscription-based (cloud computing) sales based upon lifetime value of the deal rather than unit price; this is the true value of the deal. All vendors need to do is replace the word “price” with monthly, quarterly or annual recurring revenue in their sales compensation model. Then they have the ability to accurately calculate rewards that are proportional to partners’ sales.

Second, Vendors need to integrate individual and company rewards into a single points-based system, and design the incentive scheme around partners, individuals and teams; ensuring that all stakeholders derive tangible benefits through earning and redemption opportunities that align to the partner’s business model, and generate an incremental shift in the desired partner behavior. Because the end goals for both individual and company level incentives are the same — loyalty and a surge on incremental sales — an integrated approach is cost-effective for vendors. In addition to this very obvious benefit, a unified approach to incentives builds deeper relationships with target accounts (partners), a necessity for effective complex services and solution selling.

Incentives for the Next-Generation Channel

Clearly, incentives for a channel populated by hybrid partners — those who pursue multiple revenue streams — and vendors who also are expanding their sources of revenue, will remain an integral component of channel programs. There is no need to start over or redesign incentive programs every time the channel landscape evolves. A focus on the true value of a sale means that as the channel changes, only variables used to calculate the value of sales need to be modified to keep an incentives program timely and relevant.

Friday, March 9, 2012

Treat Your Company-level Incentives like a Loyalty Rewards Program

You’ve probably got a wallet full of rewards cards tracking points for your favorite coffee, clothing, book purchases and more.  The concept of offering rewards in exchange for business isn’t new.  But most manufacturers are not running their company-level incentives program like their loyalty programs (rewards to individuals)..

The goals of individual and company level incentives programs are similar when simplified: drive incremental channel revenue and profit, speed new product adoption, establish competitive differentiation and increase loyalty.

The most obvious benefit of integrating company and individual incentives is the increased efficiency in programmatic operation.  An integrated approach also enables you to align global strategy across multiple regions while still allowing for local implementation.

My favorite benefit of an integrated approach is the ability to take advantage of a single, common points-based currency across your incentive programs.  Programs that are points-base enable earning for behaviors that are valuable other than direct sales.  For example:

·         Filling out a complete partner profile
·         Attending lunch and learns
·         Attending events
·         Training and certification completion
·         Registering deals

Programs that are points-based also enable a company to spend on non-cash rewards that add value, including:

·         Pre-packaged marketing plays
·      Demo units
·         Training and certification
·         Marketing support, and
·         Travel and gas vouchers

Cash has limited value promoting loyalty at the company level.  For example, it isn’t always used to promote your products over those of a competitor.  And normally, cash is used to pay for operations costs, not in generating more demand for you products and solutions.  The bottom line is that cash – and the source of it – is often forgotten after the money is spent.

A single points-based incentives program – one that combines your individual rewards program with your company-level incentives program – offers unparalleled benefits to both the manufacturer and partner.