The document presents findings from the 2015 Channel Incentive Benchmark Study, highlighting key trends and challenges in channel incentive programs across various industries. It identifies complex processes and data access issues as primary pain points for partners while emphasizing the importance of improving marketing execution and partner support. The study also discusses the effectiveness of different incentive types, revealing a reliance on rebates and the need for better automation in managing these programs.

1. Emerging Trends in Channel Incentive Programs
Key Take-Aways from the 2015 Channel Incentive Benchmark Study

2. 2
PRESENTER
Steven Kellam
SVP, Sales & Marketing
CCI | Global Channel Management
Diane Krakora
CEO
PartnerPath

3. 3
After all, we are in the incentive business…
PRIZES TODAY!

4. 4
Respondents: Who We Surveyed
Optimism Varies by Industry
Vendors React to Industry Challenges
An Overall Lack of Access to Information
Partner Programs That Grab Top of Mind
1
2
3
WHAT WE’LL COVER
Digging Deep into MDF/Co-op
Rebates: An Opportunity Squandered?
The Well-Rounded SPIF
The Automation & Integration Lag
Our Conclusions
4
5
6
7
8
9
10

5. 5
What would you like to change about
your MDF/Co-op processes?
1. ROI (1, 4, 5)
2. Improve partner marketing efforts (2, 3)
3. Pay faster (6)
HOWEVER - IF YOU ONLY PAY ATTENTION TO ONE SLIDE
41% 40%
37%
32%
23% 23% 22% 21% 21%
18% 18%
3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Improve Data Analytics and ROI measurement
Improve marketing execution by partners
Improve marketing support/program planning
Overlay/ tie back sales data to Co-op/MDF spend
Closed loop process tied to POS data and/or deal registration
Faster payment process
Improve Partner support and issue resolution
Integration with CRM system
Revise guidelines to better reflect company goals
Global standardization
Streamline administration
Other

6. Who We Surveyed

7. 7
 Industry
• Software
• Hardware / Devices
• Telecoms
• Smaller %: Pharmaceutical, Health Care,
Insurance, and Non-High Tech Manufacturing
 Job Functions
• Heavy on Channel Marketing, Channel Sales,
also Channel/Sales Ops and Execs
 Seniority
• Nice mix of Manager, Director, VP, C-level
WHO WE SURVEYED
Hardware
23%
Manufacturing
22%
Software
20%
Other
18%
Telecom
18%
Breakdown of Respondents by Industry
Primary Job Function Within Organization
n Channel Marketing (28%)
n Channel Sales (23%)
n Executive Team (CxO) (14%)
n Other Role (13%)
n Purchasing (10%)
n Product Development/ Technical (3%)
n Sales Engineer (3%)
n Finance (3%)
n Sales Operations (3%)
48%
26%
12%
10%
4%
Position Level
n Manager (48%)
n Director (26%)
n Vice President (12%)
n Program Support/Coordinator (10%)
n C-Level (4%)

8. 8
 Size of Channel: Primary Categories by
Annual Channel Revenue
• < $100 million - $25%
• $100 million to $499 million – 15%
• $500 million to $999 million – 29%
• > $1 billion – 31%
 Really nice mix
WHO WE SURVEYED
n Less than $100 million
n $100 million to $499 million
n $500 million to $999 million
n $1 billion to $2 billion
n Greater than $2 billion
25%
15%
29%
23%
8%
Approximately how much revenue goes through
your channel per year (in $US)?

9. Optimism Varies by
Industry

10. 11
2015 GROWTH PREDICTION
 Hope springs eternal
 Double-digit growth plan is the norm
 Software vendors are the most bullish
about growth this year
0% 10% 20% 30% 40% 50% 60%
About the
Same
Higher
Percentage
of Total
Lower
Percentage
of Total
As a percentage of total company sales, how do you envision
your channel sales revenue will change in 2015 vs. 2014?
36%
57%
6%
0% 20% 40% 60% 80%
Software Industry
Lower Percentage
of Total
Higher Percentage
of Total
About the Same

11. Vendors React to
Industry Challenges

12. 13
#1 pain point for 2015: Complex or cumbersome processes for partners
 Has been the number one for challenge for partners for the past 3 surveys
 But what does it really mean?
 Lots of talk from clients about this… “partner experience” initiatives, etc.
 The key is…what are you going to do?
TOP CHANNEL CHALLENGES
What are your channel team’s biggest challenges?
1. Complex or cumbersome processes for partners 32%
2. Helping partners migrate to new business models (cloud, etc.) 28%
3. Ineffective sales and marketing capabilities from channel partners 28%

13. 14
Top overall pain points over the years:
 2010: Poor analytics & ROI tracking
 2012: Sales and marketing readiness from channel partners
 2015: Complex / cumbersome processes for partners
Top 2015 challenge by industry:
 Software: Help partners migrate to new business models
(cloud, etc.)
 Hardware/Devices: Inefficient access to data/analytics
tracking for program measurement
 Telecom/Cable: Complex or cumbersome processes
for partners
TOP CHANNEL CHALLENGES (CONT.)
Pain Points

14. An Overall Lack of
Access to Information

15. 16
Which of the following percentages show the
amount of individuals who believe they do not have
enough data to manage their channel well?
a) 10%
b) 25%
c) 40%
d) 60%
AUDIENCE PARTICIPATION

16. 17
 40% of vendor channel professionals say NO
• Do I get the data I need?
• Do CAMs share enough info?
 Channel marketing very dissatisfied with info sharing
 VPs perceive a data access problem most
DATA ACCESS & INFORMATION SHARING
True
60%
False
40%
My channel team members have adequate access
to the program and partner data we each need to
make informed decisions on a daily basis.
True
54%
False
46%
Channel team member access to information by department.
True
73%False
27%
True
55%False
45%
Channel Marketing Channel Sales (CAMs, etc.) Executive Team
True
32%
False
68%
Vice Presidents

17. Partner Programs
That Grab Top
of Mind

18. 19
INCENTIVE TYPES RANKED BY IMPORTANCE
Incentive Programs Ranked by Importance
(1 being most important and 5 being least important)
1 2 3 4 5
Don’t
Offer
Deal Registration 26% 14% 15% 14% 10% 20%
Rebates 25% 14% 21% 15% 9% 17%
Co-op/MDF/Joint Marketing Planning 21% 33% 16% 11% 7% 11%
SPIFs 12% 17% 17% 16% 18% 21%
Referral/Influencer Rewards 11% 15% 20% 19% 14% 22%

19. 20
However, most vendors don’t have time or headcount for the majority of partners.
LOOKS LIKE A WHOLE LOT OF PLANNING GOING ON
1%
7%
22%
29%
28%
13%
We don’t have a joint marketing
planning process.
Don’t Know
More than 50%
20-50%
11-20%
1-10%
0% 5% 10% 15% 20% 25% 30% 35%
PercentageofPartners
Vendors
What percentage of partners are involved in your joint marketing planning program?

20. 21
Filtered by industry:
 Software: heaviest joint planning
 Hardware JMP is much more exclusive
LOOKS LIKE A WHOLE LOT OF PLANNING GOING ON
0%
8%
32%
28%
32%
0%
0% 10% 20% 30% 40%
3%
6%
6%
21%
47%
18%
0% 10% 20% 30% 40% 50%
1-10%
11-20%
20-50%
More than 50%
Don’t Know
Don’t have a
JMP process
1-10%
11-20%
20-50%
More than 50%
Don’t Know
Don’t have a
JMP process
1-10%
11-20%
20-50%
More than 50%
Don’t Know
Don’t have a
JMP process 0%
8%
17%
21%
25%
29%
0% 10% 20% 30% 40%
Software Hardware Telecom
Vendors Vendors Vendors

21. Digging Deep into
MDF/Co-op

22. 23
Which activity does not qualify
as OPEX?
a) Trade Shows
b) Advertising
c) Demo Equipment
d) Direct Mail/Email
AUDIENCE PARTICIPATION

23. 24
FASB rule 01-9: Classification of Marketing Expenses (must meet all 4 criteria)
1.The payment covers a service by the partner that is a benefit to you
2.The benefit is clearly separable from the sale of the product
3.The benefit could be purchased by you from a source other than the partner
4.You have obtained proof of performance to reasonably estimate true cost
OPEX VS. CONTRA REVENUE
Sales Development Fund or Marketing Development Fund?
Marketing Expenses:
 Advertising (Print/Web)
 Broadcasting (TV/Radio)
 Catalogs
 Direct Mail/email
 Telemarketing
 Trade Shows
Contra-Revenue:
 Certification
 Training
 Seminars
 Demo Equipment
 Funded Headcount
 Recruitment

24. 25
Do you offer MDF/Co-op funds?
Filtered by channel size:
 Always ‘yes’ when >$1B
 Often ‘no’ when <$100M.
MDF/CO-OP FUNDS
Yes
77%
No
23%
Organizations that offer MDF or Co-op funds, filtered by channel size.
Yes
59%
No
41%
Yes
89%
No
11%
Yes
100%
No
0%
Less Than $100 Million $100-$999 Million More Than $1 Billion

25. 26
Filtered by industry:
 Software: More alternative routes to market
 Hardware & Telco: More physical constraints and commoditization
MDF/CO-OP FUNDS
Yes
67%
No
33%
Yes
89%
No
11%
Yes
79%
No
21%
Software Hardware (High-Tech) Telecommunications

26. 27
 Key theme: getting reps into the same room as prospects
 Social media scores low – why?
 Enablement on the rise – increase in more complex sales
MOST IMPORTANT REVENUE-DRIVING ACTIVITIES
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Customer seminars/ road show/ floor day/ webinar
In-Person Events: Industry Conferences, Workshops, etc.
Funded Headcount/ Brand Champion expense
Demo Equipment
Sales and technical training /certifications
Online webinar events
Email marketing
Outbound Sales Calling/Telemarketing
Product Catalogs
Newsletter/email campaigns
Online Advertising
Co-branded merchandise/ Promotional Items
Thought Leadership content development
Print Advertising
PDF Collateral/Case Studies, Pre-recorded sales/marketing videos
Direct Mail
Public Relations
Website Development and management
Social Media Enablement/Syndication
Broadcast Advertising
Other
For your MDF/Co-op program, which reimbursable activities that you currently offer to your partners do you think represent the
MOST significant contribution in building business for you and your partners?

27. Rebates: An
Opportunity
Squandered?

28. 29
How does the IRS define a SPIF (as opposed
to a Rebate)?
a) Reward for selling something
b) Reward for buying something
AUDIENCE PARTICIPATION

29. 30
Do you offer SPIF, Rebates, or Loyalty Rewards?
Filtered by industry:
 73% say yes
 Hardware vendors – heaviest reliance on reward incentives
 Software vendors the least
 Still a lot of old school rebates out there
OFFER SPIF/REBATE/LOYALTY REWARDS
Yes
73%
No
27%
Yes
52%
No
48%
Yes
90%
No
10%
Yes
64%
No
36%
Software Hardware (High-Tech) Telecommunications

30. 31
OFFER SPIF/REBATE/LOYALTY REWARDS
Do you offer SPIF, Rebates, or Loyalty Rewards?
Filtered by channel size:
 97% ‘yes’ when >$1B
 50/50 when <$100M
Yes
50%
No
50%
Less Than $100 Million $100-$999 Million More Than $1 Billion
Yes
79%
No
21%
Yes
97%
No
3%

31. 32
Rebates most common
Easy to administer
Easy to get CFO approval
Treated as a discount
Limited impact in shaping pre-sales behavior, since received AFTER sale
Don’t reward the actual sales guy who made it happen
Become an addiction/entitlement, so hard to turn off
MAIN REWARDS FOCUS FOR 2015?
2%
7%
18%
25%
49%
Other
None of the
above
Loyalty
SPIFs
Rebates
0% 10% 20% 30% 40% 50% 60%
+
+
_
_
_
_
What form of reward did most responders prefer?

32. 33
 A mix of both is best practice – hard to do
 Use of an application is pre-requisite for targeting individuals
 Filtering by industry:
• Company-level rewarding is highest in hardware
• Software companies showed a balance of doing both
TARGET REWARDS AT COMPANY OR INDIVIDUAL LEVEL?
0% 10% 20% 30% 40% 50% 60% 70% 80%
At the company level.
At the individual level (the specific
salesperson, sales engineer, marketer, etc).
How do you target incentive reward payments to partners?

33. The
Well-Rounded
SPIF

34. 35
What are the SPIFs for?
 Sales is #1
 Move to behavior modification
 Filtered by industry:
ARE ALL THE EGGS IN ONE BASKET?
0%
10%
20%
30%
40%
50%
60%
70%
What are the MOST effective SPIF
rewards you offer?
47%
19%
13%
19% 22%
13%
6%
0%
10%
20%
30%
40%
50%
Hardware
80%
20% 25% 20%
5% 10% 5%
0%
20%
40%
60%
80%
100%
Software
60%
20% 25%
10%
30%
15% 15%
0%
10%
20%
30%
40%
50%
60%
70%
Telecom

35. 36
How do you pay partners for rewards programs?
 Cash still king
 Filtered by industry:
• Telecoms most open to non-cash
• Software most into cash
• Very cool travel and merchandise on the horizon
HOW DO YOU PAY FOR REWARDS?
0%
10%
20%
30%
40%
50%
60%
70%
Cash (checks,
wire transfers,
ACH, etc)
Gift Cards Reloadable
Debit Cards
Credit Points
Redeemable in
Travel and
Merchandise
Catalogs
How do you pay partners for rewards programs?
0% 20% 40% 60% 80%
n Credit Points Redeemable in
Travel and Merchandise Catalogs
n Gift Cards
n Reloadable Debit Cards
n Cash (checks, wire transfers,
ACH, etc.)
0% 20% 40% 60% 0% 20% 40% 60%
Software Hardware (High-Tech) Telecommunications

36. The Automation &
Integration Lag

37. 38
Is your MDF/Co-op program run on an automated system?
 Overall: about half use an automated system
 Filtered by channel size:
• <$100M – 13% automated
• $100M to $499M – 50% automated
• $500M to $999M – 43% automated
• $1B to $2B – 29% automated
• >$2B – 67% automated
MDF/CO-OP: SPREADSHEETS OR AUTOMATED?
Automated System
48%
Spreadsheets
46%
Not sure
6%
Automated
System
50%
Spreadsheets
50%
Not sure
0%
Automated
System
43%
Spreadsheets
52%
Not sure
5%
Automated
System
29%
Spreadsheets
71%
Not sure
0%
Automated
System
67%
Spreadsheets
33%
Not sure
0%
Automated
System
13%
Spreadsheets
80%
Not sure
7%
Less Than $100 Million $100 - $499 Million $500 - $999 Million $1 - $2 Billion Greater Than $2 Billion

38. 39
How do you manage your SPIF and
Rebate programs?
 Filtered by channel size:
• <$100M – none automated
• $100M to $1B – half automated
• >$1B – 40% automated
SPIFS & REBATES: SOFTWARE OR SPREADSHEETS?
How Do You Manage Your SPIF and Rebate Programs?
n Automated – tool runs calculations and
generates payment batches.
n Spreadsheets – manually calculated and paid.
38%
62%

39. 40
 Overall 37% say their MDF system IS NOT
integrated with other internal systems
 Filtered by channel size:
• <$100M – about half integrated (53%)
• $100M to $1B – about half integrated (55%)
• >$1B – 70% integrated
SYSTEM INTEGRATED WITH OTHER SYSTEMS?
0% 5% 10% 15% 20% 25% 30% 35% 40%
If your MDF/Co-op system is integrated (automatically shares data)
with other internal systems, which ones is it integrated with?
n Not Integrated
n PRM/Partner Portal
n CRM
n Don’t Know
n ERP
n Deal Registration System
n Learning Management System (LMS)
n Other

40. Our Conclusions

41. 42
Key take-aways:
 Some old habits die hard…
• Use of volume rebates
• Complexity for partners
• Check payments
• Limited access to information
 Growing awareness of the importance of partner experience
 Telecoms slowly but surely gaining on software and
hardware in channel maturity
 Cloud models are now core to all tech channels
IN CLOSING
Key Take-Aways

42. 43
Steven Kellam
SVP, Sales & Marketing
CCI | Global Channel Management
steven.kellam@channelmanagement.com
www.channelmanagement.com
Diane Krakora
CEO
PartnerPath
dkrakora@partner-path.com
www.partner-path.com
THANK YOU!
QUESTIONS?