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Give Bad MDF the Boot

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A review of MDF fundamentals, packaged around the most relevant industry trends that we see driving the necessary adjustments for success. While the core elements of a successful MDF program haven’t changed much, the ever dynamic context in which they are viewed and the rapidly changing landscape of the buyer’s and seller’s journey make it necessary to continue to vet the details of each step of even the most historically successful program.

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Give Bad MDF the Boot

  1. 1. Give Bad MDF the Boot in 2016 The 8 Key Factors for Maximizing Success
  2. 2. 2 Steven Kellam President CCI | Global Channel Management PRESENTERS Peter Hornberger Product Marketing CCI | Global Channel Management
  3. 3. 3 1. Key Trends a) Trends for Channel Vendors b) Trends for Channel Partners AGENDA 2. Optimizing Your Program a) The 8 Key Elements 3. Conclusion a) ROI b) Big Wins
  4. 4. Key Channel Trends
  5. 5. 5 Too much red tape: Jumping through complicated hoops to get the funds Last minute windfalls: Vendors release MDFs 2-3 weeks prior to the end of a quarter Constant changes: Vendors making last minute modifications to marketing plans Random rebates: Program parameters are often complicated and may change frequently Painful audits: Performance results and guidelines are often not clearly communicated PARTNER TREND: MANY ARE FRUSTRATED
  6. 6. 6 PARTNER TREND: DEALING WITH NEW BUYER JOURNEY http://bit.ly/WinningZMOT_CCI
  7. 7. 7 20% of our clients have moved 100% to discretionary MDF in the past 24 months. VENDOR TREND: CHANGE IN FUNDING MODEL The drive to take market share and get the most out of partners is pushing true MDF over Co-op. Current Trend Movement to MDF (Market Development Funds)
  8. 8. 8 “If I do not have the right measurements in place by end of year I am losing my job.” ̶ VP Channel Marketing Fortune 500 tech company VENDOR TREND: TARGET ON MARKETERS BACKS
  9. 9. Optimizing Your Program
  10. 10. 10 1. Program Eligibility 2. Program Period 3. How Funds Are Earned 4. Products Promoted 5. Eligible Activities 6. Reimbursement % 7. Marketing Execution 8. Payments PROGRAM STRUCTURE: KEY ELEMENTS
  11. 11. 11 KEY ELEMENT #1 1. Program Eligibility Which channel partners will be offered the program? Will they be offered the same program? Robinson-Patman Guidelines: “Competing channel partners must be offered similar programs on a proportionately equal basis.”
  12. 12. 12 PARTNER ASSESSMENT Scorecarding is key – you have to know your partners Partner Assessment Process Phases Screening Criteria Formulate Questions Prepare and Execute Apply Categories and Lenses Define Participant Pool Communicate Results ©Copyright SiriusDecisions Inc. All rights reserved.
  13. 13. 13 KEY ELEMENT #2 2. Program Period Annual or quarterly are most common Should align with sales cycle and product/solution seasonality Do you need a lesser or greater degree of control?
  14. 14. 14 PRODUCT SEASONALITY VS. PROGRAM PERIOD
  15. 15. 15 KEY ELEMENT #3 3. How Funds Are Earned Discretionary or earned accruals? Combination? Past sales performance or anticipated future performance?
  16. 16. 16  Growth oriented – BDF (business development fund)  Greater flexibility, no direct link to ‘sell thru’ by a partner  Flexibility in funding commitments YoY or QoQ  Great for changing markets and new technologies WHY MDF VS COOP 44% 31% 22% 3% Discretionary or Accrual? Discretionary Accrual per partner Contractually committed
  17. 17. 17 KEY ELEMENT #4 4. Products Promoted Will the accrual or reimbursement level vary with specific products? Will program target all products/solutions or a subset?
  18. 18. 18 MULTI-VENDOR SOLUTIONS BECOMING MORE COMMON
  19. 19. 19 KEY ELEMENT #5 5. Eligible Activities How will the allowed activities support your go- to-market strategies? How will they support your partners’ go-to-market strategies? What behaviors will you want to ‘reward’?
  20. 20. 20 TREND: INCREASE YOUR DIGITAL FOOTPRINT B2B research is self-directed. 0% 57% of the way towards making a decision before reaching out to a potential vendor 100% 80% of the way towards making a decision before reaching out to a potential vendor Traditional Cloud
  21. 21. 21 Today’s B2B Buyer  Lengthening ‘getting to know you’ period (marketing)  Shortening ‘making a decision’ period (sales)  Looking for ‘continuum’ vs. ‘episodic’ relationship Impact on B2B Marketing Tactics  Marketer’s key role now is to help buyer get smarter  Content is King, but Context trumps King MDF Activities to Focus On  Activities are those that support delivery of ‘thought leadership’  Key are the vehicles that best support delivery of ‘thought leadership’ THE “CONSUMERIZED” B2B BUYER
  22. 22. 22 65% 66% 67% 71% 76% 79% 79% 81% 81% 81% 82% 93% B2B MARKETING TRENDS B2B Content Marketing Tactic Usage Social Media Content – other than blogs Case Studies Blogs eNewsletters In-person Events Articles on Your Website Videos Illustrations/Photos White Papers Infographics Webinars/Webcasts Online Presentations 2016 B2B Content Marketing Trends—North America: Content Marketing Institute/MarketingProfs Effectiveness Ratings for B2B Tactics 58% 58% 59% 60% 61% 62% 63% 65% 66% 75%In-person Events Webinars/Webcasts Case Studies White Papers Videos Research Reports eNewsletters Blogs Infographics Online Presentations
  23. 23. 23 15% 12% 9% 18% 10% 14% 5% 6% 1% 2% 2% 2% 2% 1% 13% 13% 13% 12% 11% 8% 7% 7% 4% 3% 3% 2% 2% 2% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 2013 2014 CCI TOP ACTIVITIES
  24. 24. 24 KEY ELEMENT #6 6. Reimbursement % To what extent do you want to reward certain behaviors? Or discourage others?
  25. 25. 25 TACTICAL VS. STRATEGIC METRICS Awareness Interest Desire Transaction  Email  Advertising  Digital Marketing  Responders  Leads  Customer Event  Telemarketing  Attendees  Appointments  Demo  Units Placed  Proposals  Opportunities created  SPIF/ Sales Incentive  Units sold  Sales value  Opportunities closed Activities: Metrics:
  26. 26. 26 KEY ELEMENT #7 7. Marketing Execution How do you measure success? Will you provide execution tools? Or, provide special incentives for use of your tools?
  27. 27. 27 TPMA benefits:  Protect your brand by ensuring proper campaign protocols and standards  Make is easy for the partner to execute marketing  Provide objective, reliable marketing outcomes data  Remove need for proof of performance complexity THE RISE OF THROUGH PARTNER MARKETING AGENCIES
  28. 28. 28 INTEGRATIONS Key to measurement SERVICES  Follow-the-Sun Support  Claims Administration  Global Payments  Program Administration SOFTWARE  Fund Management  MDF  Co-op  Joint Planning  Incentive Management  SPIF  Rebate CHANNEL WISDOM  Strategy Best Practices & Benchmarking  Operational ‘Do’s and Don’ts’  Global Monetary & Currency Expertise  Compliance with local laws and customs TPMAs CRM/PRM
  29. 29. 29 KEY ELEMENT #8 8. Payments Pay Quickly Partner vs Program Centric
  30. 30. 30 PAY QUICKLY Best Practice  21 days or less Industry Leaders  14 days or less Reinforce the right behaviors
  31. 31. Conclusion
  32. 32. 32 CHANNEL TREND: CLOSING THE LOOP ON MDF ROI Partner Scorecarding & Benchmarking Joint Business Planning Joint Marketing Planning & Approvals MDF Fund Allocation & Distribution Marketing Campaign Execution Deal Registration Point of Sale Data Creation, Collection, Scrubbing Systems of Record – Partner Info & Outcomes ROI Measurement & Predictive Analysis Partner Investment Lifecycle
  33. 33. 33 1. “Year of the partner” – Truly partner-centric channel vendors who make partner engagement easy, simple, and rewarding 2. Behavior modification – Vendors who move beyond rewarding based purely on past revenue performance, to ‘soft targets’ that drive new sets of behaviors 3. Connected the dots – moved towards measurement, accountability around ROI 4. Single pane of glass – Created single view for partners and administrators WHAT THE WINNERS DID IN 2015
  34. 34. 34 Steven Kellam President CCI | Global Channel Management steven.kellam@channelmanagement.com THANK YOU & QUESTIONS Peter Hornberger Product Marketing CCI | Global Channel Management peter.hornberger@channelmanagement.com

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