As someone who has to align your partners’ use of Co-Op/MDF allowance to a return, you know that accounting for the spending can be painful: Some might say as painful as trying to figure out what a college-aged kid is doing with their allowance. In both scenarios, the intent is for the allowance recipients to focus spending on productive expenses. To solve the problem, take a page out of the good-parenting playbook: Change the behavior to change the outcome.
The college allowance scenario typically goes like this: a parent sends their child money to help offset expenses like books, meals, and rent. Some students understand the money is for their education and living expenses. Others have different priorities and spend the money on less necessary items like beer, clubbing, and, my favorite, “I don’t know, just stuff.” (Even if you or yours weren’t in the latter group, chances are good you knew someone in this group.) Rather than hope for the best, most parents monitor spending to be sure allowances are flowing to expenses that directly result in a better education.
What’s the connection to your partner community? Just like the students described above a portion of the partner community will spend marketing allowances responsibly, but the larger population will spend their money on ambiguous activities. Marketing allowance program categories such as “events” or “other” are the equivalent of a student’s “just stuff.” This is what makes tracking ROI to your marketing allowances such a challenge.
I have represented marketing allowance programs for the better part of my career, allowance programs for B2B marketers, and by far the largest single category for expense utilization was in the “events” category, a minimum of 50% of total promotional allowance spending was not uncommon. Many of these remittances covered expenditures like meals, entertainment, golf greens fees, and ad specialties. I’m not slamming events—they can be quite productive against mutual goals—but they may do nothing to promote your go-to-market objectives (GTM)… just sayin’. What’s more, your channel sales organization is likely to approve whatever makes their partners “happy,” unless clear controls and guidelines are in place—and your sales organization has been trained on the goals and processes around your program.
The point is this, much like a parent giving their college kid an allowance, you’ve got to put some guidelines and oversight into play. Don’t approach this as a punitive tactic, but rather as a way to move partners toward behaviors that benefit everyone’s bottom line. To see more ROI on your Co-Op/MDF program and truly influence partner behavior, make track, train and reward your mantra. If only my parents had used this tactic when I was in college!
Here are five tips to get you started:
- Set up strict guidelines and controls for how partners can use your promotional allowances with a means of reporting and monitoring compliance. This starts with a clear set of guidelines.
- Have the ability to track spending against GTM objectives. Ideally, to optimize ROI, promotional allowance spending should be directed to activities that provide MUTUAL BENEFIT. This means directing spending to support key sales and marketing initiatives you both share. This can also include prescriptive marketing plays that align lead generation and near sales activities with the buyer’s journey—that support or extend your own marketing programs.
- Provide training for partners and CAMs. Left alone, your CAMs will approve whatever is required to make your partners happy. They are your primary source of communications to your partners; they should be the very resource to influence and recommend MDF programming for mutual benefit. Marketing certification for your partners is the flip side of that. This is a certification program that educates partner stakeholders on your program, resources available, and how to optimize them for partner benefit. Too many companies leave this step out and wonder why their MDF program is not more effective.
- Recognize implementation of best practices and attainment of mutual goals. Due to point two above, you have the ability to track utilization, compliance, and results by partner and by region. This means you can recognize and share partner successes with your entire channel community and recognize and evangelize successful CAMs internally. Recognition can be as meaningful as a reward—although rewards are okay too!
- Become comfortable saying no. This should go without saying, however, for company cultures that are used to allowing partners to spend promotional allowances on anything—no matter how trivial—this is a very hard habit to break. This will require a comprehensive communications and training program for all stakeholders.
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