Channel Champion Blog

Program ROI?Recently, we did a study among channel marketers and partners alike. That study reviled that many vendors don’t see the value in their MDF program (or co-op program–for the purpose of this entry I’m using the two synonymously as they are both promotional allowance programs, albeit with different funding models). So if you feel that you’re not getting any value from your program, you’re not alone.

Interestingly, their partners feel differently. Partners surveyed rate MDF programs as more valuable to them than deal registration–and many other types of channel incentive programs offered to them by their vendors for that matter. Well, this is an interesting difference of opinion. After all, perception is everything. Isn’t it?
As a channel marketer, if you don’t feel like you’re getting any value from your MDF program, you probably aren’t. But if we were to peel back the layers further, it may be discovered that the objectives for your MDF program are ill defined, if at all. What’s more, it’s likely that there are no real metrics to report on the program’s success at achieving whatever objectives exist.

Be honest with yourselves, does this sound like your situation?

Well if that’s the case for your organization, you’re not alone. As we engage with new clients and prospects alike, it continually surprises me how many vendor don’t have clear objectives for their MDF program. And, if objectives do exist they are either of an administrative nature (e.g.: “Provide global standards to program guidelines and processes”), or they are loosely defined with such declarations as “Increase sales” with no real metrics defined to determine if the program can actually achieve that.

Well, it is a new year—and with it comes New Year’s Resolutions. So here’s how you can turn a new leaf and get out of that non-performance rut:

MDF Program objectives should closely align with your go-to-market objectives for the year (G2M). Your G2M objectives typically consist of some combination of the following:1) channel objectives (e.g.: “Recruit new channel partners”), 2) end user objectives (e.g.: “Cross sell solutions”, or “Open new markets”) or, 3) product objectives (e.g.: “Introduce new products”).

Note that all these examples result in “Increased sales”, but more importantly they represent HOW sales are going to be increased. We will call each of the examples represented in parenthesis your GTM initiatives. As such, your MDF programs should be designed support these initiatives, thereby creating real synergy between your GTM efforts as well as your partners’. As your GTM strategies are subject to change over time, your plan’s objectives should be reviewed at least annually and adjustments made accordingly.

Metrics may be assigned to each of the initiatives represented above to help you evaluate their attainment. These metrics might include: how much money was invested against each of these initiatives, who spent it, and what the money was spent on (defined as specific activities and time periods). When such information is captured on a marketing planner or prior approval form for MDF request, these vehicles then become a leading indicator for you to identify in advance which partners are supporting your initiatives, and how. Equally important is that these processes helps to identify which partners aren’t supporting your initiatives, allowing you to influence their behavior before it’s too late.

Using these principles, you can now report to your management how much money was spent by your partners behind each of your key initiatives, including how that money was spent and who spent it. Properly executed, you can even report on the results.

How’s that for improving ROI from your program?