Shared Expenses Yield Common Objectives With Channel Partners

Challenge: How do you get your partners to focus their efforts on programs with the highest results?

Lesson: Shared expenses and tight metrics will optimize marketing programs for both the vendor and the reseller partner.

Advertisements

Challenge: How do you get your partners to focus their efforts on programs with the highest results?

Reseller partners are frequently an essential component to a company’s sales and marketing plans. They have relationships with the customer and add value to your overall solution by completing the surrounding products or services required by the customer. However, resellers usually don’t have a huge team of marketing professionals, and they frequently operate on relatively thin margins.

In a separate post, I outlined the importance of creating effective programs that partners can easily tailor and incorporate into their own marketing programs. However, the vendor needs to ensure that the partner resellers’ interests are also aligned with their own. The easiest and most effective way to do this is by using a shared expense model so that partners can execute programs more quickly and cost-effectively. Keep in mind, however, partners still need to choose those programs that will be most effective for their customer base since this still likely represents a significant expense for the reseller.

The vendor must balance their overall spend with their partners’ versus their direct marketing spend. In some respects, this approach is better than direct programs because with shared costs, the vendor spends 50% less on the programs, all else being equal. These programs may only be available to partners that have achieved certain sales or certification levels – due to budget or vendor staff limitations. These programs are also often connected to Marketing Development Fund (MDF) or Co-op funding programs to reward appropriate partner actions.

The point at which many of these break down is in either the pre-approval process or the post-program measurement process. The vendor must have a closed loop system for approving and measuring these programs to measure the impact of these programs relative to the vendor’s direct programs. This feedback is important for both sides so they can see which programs drove revenue and which did not. As with all programs, you can’t manage what you can’t measure. Certainly reporting results for channel partner programs is critical to optimizing these programs over time. Adding shared expenses aligns the interests directly for both the vendor and the reseller.

Lesson: Shared expenses and tight metrics will optimize marketing programs for both the vendor and the reseller partner.

Author: Larry Stein at TechMarketingStrategies

For the last 20 years, I have led demand generation teams supporting high growth technology companies. Now working as an independent consultant, my responsibility is to apply best practices in the creation of these programs. My goal is to enable marketing teams to become self sufficient with a data driven culture of KPI's, test and measurement in service of achieving company revenue targets. My approach is to work with senior management identifying objectives and wildly important goals. With these in mind, we work together to build programs, processes and systems that will reach these goals along with the measurement KPI's to evaluate progress. Along the way we will enable the team to manage and maintain these systems so achieving these goals becomes a natural cadence of the marketing organization.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s