Channel Incentive Usage and Effectiveness Study

Channel Incentive Usage/Acceptance Study
7250 Redwood Blvd. Ste. 105
Novato, CA 94945
415.472.5100
www.channelmanagement.com

Survey Focus

• Perceived effectiveness across a variety of program types
– Including gap in vendor/partner perceptions
• Gain deeper insight into MDF and Co-op practices
– Overall
– Inclusion of Social Media
• Areas of focus for 2011 (incentive programs and more)
– Pain Points
– Key Initiatives


Incentive Programs Included

• Co-op/MDF
• Opportunity Management
• SPIF/Loyalty Programs (targeting sales reps)
• Partner Rebates (headquarter)
• End User Rebates
• Trade-In Programs


CCI provides solutions to
Manage, Measure, and Optimize
channel incentive programs for improved ROI


Incentive Solutions throughout the Demand Chain

Distributor Reseller Sales Reps Consumer

Co-op/MDF
Streamline management of joint marketing programs  
Marketing Planner
Plan marketing programs, forecast and measure ROI  
SPIF & Rebates
Run short- and long-term incentive programs  
Sales Performance Rewards
Reward channel partners for attaining sales goals  
Trade In Rewards
Manage incentive programs requiring physical return of goods  
Opportunity Management
Deal Registration, Referral Rewards and Special Pricing   


Software and Services

Comprehensive application suite manages incentive activity across
On Demand multiple programs
Software

Professional Industry expertise drives impactful program design and
Services ongoing performance enhancements

Program Program and partner support streamlines operations and expedites
Management
fulfillment


Current Clients

Hardware Software Storage Telecom Entertainment Other


Methodology:

• Quantitative, multiple choice questionnaire
• 15,000 vendors/30,000 partners
• Where possible, many questions were “mirror image” to
compare perceptions between vendor/partner audiences
• Focus on B2B Technology
– Hardware
– Software
– Office Automation
– Telecommunications (hardware and services)
• Results are indicative of trends and attitudes


Responder Profile: Manufacturer/Vendor Responses

• 65% Channel sales and marketing positions
• Primary regional scope: ~50% North America and ~50% Global
• Sell a majority (80%+) of their products through the channel


Responder Profile: Partner Responses

• ~70% VARs
– Remainder were managed services providers, direct marketers, ISVs
• Annual sales were evenly represented between $1MM to more
than $20MM


Program Usage
Novato, CA 94945
415.472.5100

Program Utilization: Manufacturer/Vendor Responses

Co-op/MDF is the most commonly used program, with Channel Rebates and SPIFs
coming in second and third respectively

Co-op/MDF Reimbursement 77.2%

Sales Rebates for Specified Sales
62.0%
Targets

SPIF and Loyalty Programs
48.9%
Directed to Reseller Sales Reps

SPIF Programs Funded by MDF
31.5%
and Other Soft Dollars

39.1%
Rewards/Discounts

Trade-In Programs Directed to End
30.4%
Users or Channel Partners

End User Rebates—Post Purchase 23.9%



In the context of all program types, incentive programs at large fall just behind Sales
and Marketing Training in importance.

Co-op/MDF 40.2%

Opportunity Management Programs 44.8%

Marketing Resource Center 11.5%

Rebate and Incentive Programs 48.3%

Sales & Marketing Training for partners 57.5%

Lead management to channel partners 34.5%

Joint Business Planning 39.1%

Technical Training for Channel Partners 40.2%



Vendors seem to have a love or hate relationship with Co-op/MDF and Opportunity
Management, as they tie for second behind Marketing Resource center for LEAST
effective channel program

Co-op/MDF 25.6%

Opportunity Registration/Management
25.6%
Programs


Rebate and Incentive Programs 18.6%

Sales and Marketing Training for Channel
12.8%
Partners

Lead Management to Channel Partners 23.3%

Joint Marketing Planning/Joint Business
20.9%
Planning

Technical Training for Channel Partners 20.9%


Program Utilization: Partner Responses

Partners feel that incentive programs are more important than Sales & Marketing
training with Co-op/MDF, SPIF Programs, and Volume rebates leading.

Co-op/MDF 50.1%

Opportunity Management 14.4%


Volume Rebates 40.7%

Vendor-sponsored SPIF programs 49.1%

Sales and Marketing Training 39.2%

Receiving leads from vendors 40.5%

Joint Marketing Planning/Joint Business
17.0%
Planning

Technical Training 32.1%


Program Utilization: Partner Responses

Programs were ranked
LEAST effective with Joint
Marketing Planning as the
second least effective
vendor provided tools.

Partners and Vendors alike
don’t feel that marketing
resource centers are
effective.


Co-op /MDF Programs
Novato, CA 94945
415.472.5100

Co-op/MDF: Manufacturer/Vendor Responses

Biz Dev efforts are
Online Advertising (Google Pay-Per-Click or
considered to be the similar)
11.3%

most effective use of
Application Development 10.0%
funds—at the effect
of traditional Public Relations 11.3%
marketing programs Trade Show and Conference Attendance 37.5%

Offset Staffing Costs for Sales or Technical
10.0%
Specialist

Website Development and Management 16.3%

E-mail Expenses 11.3%

Social Media 16.3%

Customer Events 47.5%


Co-op/MDF: Partner Responses

Preferred activities
parallel that of vendors.

Partners believe that
incentive programs and
Biz Dev activities are the
best use of funds to help
build their business.



Traditional Advertising
efforts are losing favor
among vendors.

Print advertising ranks higher
than promotional give-aways
as the LEAST-effective
reimbursable activity.



Again, print based activity
seems unpopular as does
all traditional
promotional activity



When it comes to what partners seek most in a co-op /MDF program, simplicity and
expediency are the most important characteristics
Prompt approval/turnaround of
64.2%
funding request

Prompt reimbursement 55.4%

Clear guidelines 34.6%

Easy claim submittal 60.4%

Reimbursement for lead generation
16.1%
and marketing activities

Offset business development
expenses (such as training, staffing, 21.1%
demo equipment)

Predictable budgets 12.0%

Easy access to available allowances 17.9%

Claim and payment tracking 17.3%



Partners feel that vendors need to streamline their programs

Simplified guidelines and
51.5%
administration

Faster payment and
46.4%
reimbursement

More predictable allowances 23.1%

Joint marketing planning for
26.0%
optimal program usage

Marketing assistance 26.0%

Improve program support and
16.8%
escalation processes

Faster turnaround of funding
32.6%
requests/prior approvals



Conversely, Vendors are more interested in improved analytics with a strong lead

Improve analytics and ROI 60.8%

Improve partner support
25.3%
and issue resolution

Improve marketing
31.6%
support/program planning

Revise guidelines to better
24.1%
reflect company goals

Faster payment process 12.7%

Global standardization 11.4%

Streamline administration 29.1%

Integration with SFA/CRM
22.8%
system


Social Media
Novato, CA 94945
415.472.5100

Social Media: Partner Responses

Only 40% of partners surveyed
use social media

60% “No”

40% “Yes”


Social Media: Partner Response

Of those that use
social media,
LinkedIn and
Facebook are the
most popular.


Responder Profile: Partner Responses

Only 12 % of Social Media
programs are funded by
partner Co-op/MDF
programs, in whole or part. 88% “No”

12%
“Yes”


Responder Profile: Manufacturer/Vendor Responses

60% of vendors responding
currently do not support 32%
their partners for social
media in any form. Of those
that do, most supply 31%
content only.

Only 8% of vendors 26%
reimburse for social media
activity through co-op MDF. 8%


Looking Ahead
Novato, CA 94945
415.472.5100

Looking Ahead: Manufacturer/Vendor Responses

Most respondents expect
their channels to carry a
higher percentage of total
33%
sales for 2011

66%

1%



Correspondingly, vendors
expect to recruit more
partners in the new year
Increase 54%

Reduce 23%

Maintain 22%



Exactly half the audience
expects their channel
budget to grow 50% Grow

44% 6%
Maintain Decrease



Despite an expected
growth in total channel
sales and partner 44% Grow
population, just under half
of the vendors expect to
grow their channel
management teams

53% Maintain

3% Decrease



Vendors are concerned
about their partners’
ability to effectively sell
and market.

The need for analytics and
reduced complexity is also
widespread



Analytics is the # 1 priority
for vendors in the new year,
followed by Sales and
Marketing initiatives



Vendors are increasing their focus on Channel Analytics and Lead Management, with
Sales & Marketing Training and Opportunity Management tied for 3rd
No Program Increase Decrease
Maintain
Planned Focus Focus

Co-op/MDF 10.0% (8) 61.3% (49) 27.5% (22) 1.3% (1)

Opportunity Management 14.5% (12) 33.7% (28) 51.8% (43) 0.0% (0)

Partner Analytics 14.6% (12) 25.6% (21) 59.8% (49) 0.0% (0)

Partner Lead Management 9.6% (8) 37.3% (31) 53.0% (44) 0.0% (0)

Marketing Resource Center 13.6% (11) 55.6% (45) 29.6% (24) 1.2% (1)

Rebate and Incentive Programs 6.2% (5) 48.1% (39) 44.4% (36) 1.2% (1)

Channel Sales and Marketing Training 2.4% (2) 45.8% (38) 51.8% (43) 0.0% (0)

Partner Portal/PRM/Back Office
14.5% (12) 38.6% (32) 45.8% (38) 1.2% (1)
Systems

Partner Joint Marketing Planning 11.3% (9) 47.5% (38) 41.3% (33) 0.0% (0)


Looking Ahead: Partner Responses

Partners are concerned
about their lack of Sales &
Marketing capabilities.
This is second, however to
their concern about the
impact of cloud
computing and adapting
to a managed service
model.


Conclusions
Novato, CA 94945
415.472.5100

Analytics

The Issue: Analytics is the #1 initiative expressed by Vendors
• CCI has a library of ebooks and white papers available, as well as blog
topics
– www.channelmanagement.com
– blog.channelmanagement.com
• ID KPIs by “Program” as well as by “Partner”
– Benchmark what successful partners are doing
– Index individual partner performance based on those benchmarks
e.g.: 30% close ratio on deals registered within 60-days, or
XX% utilization of MDF
• Consolidate costs and metrics for all programs to evaluate total
investment in any one partner (Scorecard)


Joint Marketing Planning (JMP)

• The issue:
– Partners’ don’t see the value. Vendors are beginning to embrace it.
• The opportunity-- JMP is the best way to:
– Forecast of sales and marketing activity, and
– Help align resources and funding with partner goals
• Tips and Trends:
– Use JMP to simplify existing processes, e.g.: MDF funding allowance or
claiming
– Extending JMP to unmanaged partners to justify investment
– Provide rewards to partners for updating plans to report on progress
against goals
– Capturing ROI information of all activities against business goals


Co-op/MDF

• The Issue:
– “Most utilized program” among vendors, most popular among
partners. Yet, among “least effective” programs for vendors.
• The Opportunity:
– Review program guidelines, revise to align with GTM strategy
– Incorporate metrics to help evaluate spending against GTM goals
• Trends:
– Simplify and streamline MDF program, e.g.: Reduce approval
requirements and accelerate partner reimbursement (less than 30-
days from claim)


Social Media

• The Issue:
– Partners’ are not yet embracing social media as marketing vehicle
• The opportunity today
– Still too early to formally include social media as a reimbursable activity
• Trends
– Provide partners with tools they can use to support social media efforts
(white papers, YouTube video’s etc)
– Share “how to” advice and best-practices with partners


Deal Registration

• The Issue:
– Partners and Vendors alike agree that Deal Registration programs are
providing diminishing returns
• The Opportunity:
Has Deal Registration strayed from the initial promise?
– Manage channel conflict
– Convert “farmers” to “hunters”
– Provide pipeline visibility
• The Trend
– Many vendors are reviewing/revising structure, streamlining
administration


Questions/Discussion

Craig DeWolf
VP Strategic Development
P: 415.526.3223
E: Craig.DeWolf@channelmanagement.com


Channel Incentive Usage and Effectiveness Study

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