8 8 Key Variables of Any Co-op/MDF Program HOW TO MAKE THEM WORK FOR YOU Any comprehensive promotional allowance is made up of eight subject areas that represent the foundation for the co-marketing efforts between a marketer and its channel partners. These eight variables must work together to support the go-to-market behaviors of a marketer and its channel partners. In addition, to be truly effective at driving sell-through throughout the demand chain to the consumer/end user, each area must support the buying process of the consumer. For these reasons, promotional allowance programs should be reviewed at least once a year across each of the variables represented here to ensure their alignment with the changing goals of the manufacturer, the GTM strategy of the channel partner(s), and the buying behaviors of the ultimate consumer. This document provides the basis for reviewing existing program guidelines for new channel marketers to develop their initial set of guidelines. eBook from CCI: Channel Management Solutions
Introduction Variable 1: Program Eligibility Variable 2: Program Period Variable 3: How Funds Are Earned Variable 4: Eligible Products Variable 5: Eligible Activities Variable 6: Reimbursement Percentage Variable 7: Creative Requirements Variable 8: Reimbursement Methods The Program Guidelines 1 2 3 4 5 6 7 8 2 www.channelmanagement.com Contents 3…......... 4............ 5............ 6............ 8............ 9.......... 10.......... 11.......... 12………. 13………..
Co-op/MDF programs (often more generally known as “trade promotional allowance programs” or, more simply, “promotional allowance programs”) are a large expense for most channel marketers—often the largest single expense line item, representing as much as 10%-15% of the total channel marketing budget. Yet many channel marketers fail to capitalize on their program as a business building tool, treating it instead as a cost of doing business. Aggressive marketers who embrace the value of the program view it as a means to achieve sales and marketing objectives, and therefore regularly review and update their program to ensure the program guidelines contribute to those objectives. This reassessment is particularly important in dynamic industries — such as technology — where products, purchase processes, and even the channel partners themselves change with seemingly increased frequency. When reviewing each of the variables represented here, it is important to consider the go-to-market strategy of your channel partners as well as the programs offered to them by your competitors in addition to your own sales and marketing goals. It must be a conscious decision to develop a program that “Meets Competition” or “Beats Competition.” A properly-designed promotional allowance program can be a strong competitive advantage. This e-Book is written for anyone as a foundation to create a new program or evaluate their current co-op/MDF program for optimal performance. All Co-op/ MDF programs are based on eight key program variables. When each variable is thoroughly considered independently, the resulting promotional allowance program is truly greater than the sum of its parts, resulting in a well-engineered sales and marketing program. Presented here are considerations and best practices for each of the eight variables to help unlock the full potential of each.
1 2 3 4 5 6 7 8 www.channelmanagement.com 3 This e-Book is written for anyone as a foundation to create a new program or evaluate their current co-op/MDF program for optimal performance.
3 www.channelmanagement.com 7 Note: Sarbanes Oxley regulation provides the opportunity to classify some marketing costs as either operational expenses or contra-revenue, the choice of which has a significant impact on corporate financial reporting—especially with larger budgets. While operational expense is the preferred designation for financial reporting, strict guidelines must be enforced for expenditures to be classified as such. Therefore, your guidelines—and particularly the proof-of-performance requirements required for certain marketing activities—should be pre-approved by both financial and legal stakeholders within your organization before they are disseminated to field personnel and channel partners.
www.channelmanagement.com 13 About CCI CCI delivers comprehensive incentive solutions to optimize sales channel performance. As an enterprise software and services solutions provider, CCI enables channel marketers to manage and measure sales and marketing incentive programs throughout their demand chain, resulting in greater spending efficiency and improved program effectiveness. CCI is proud to work with market leading companies in technology, telecommunications, and entertainment such as Avaya, Autodesk, Qwest, SonicWall, Sony Playstation, and many more. For more information, visit www.channelmanagement.com or contact us at firstname.lastname@example.org. 1 2 3 4 5 6 7 8