by Craig DeWolf, CCI

The #1 question I am asked by clients and prospective clients alike has been "How can I measure the effectiveness of my Co-op (or MDF) program?" Interestingly, there are more answers to this question than there is space in this blog. However, in the interest of brevity, the short answer is below:

It depends.

While that response is appropriate for most marketing related questions, my guess is that it didn't completely satisfy your insatiable curiosity as to the answer.

So, here's the longer response (you asked for it).

Each objective should have measurable goals. This becomes the basis for your program. As simple as it sounds, when I get asked the "Measurement" question, my response is another question: "what are your objectives for the program?" Interestingly, the response frequently is: "I don't know." While elementary, the appropriate follow-up comment is: "Then how do you know what ‘effectiveness' is if you don't know what your objective is?" If you treat your program simply as a cost of doing business, then that's what you'll get-a program that sucks money from your marketing budget without providing any realized marketing benefi t.

Step One: Identify Objectives
So, as you probably guessed, the fi rst step in the process of measuring the effectiveness of your funding program is to defi ne your objectives. While this can include something as broad as "increase sales", it can also include intangible objectives such as "Increase partner/retailer loyalty." Either example has ways to measure the effectiveness against goals, albeit very different. The fi rst example would rely on a more quantitative approach of measuring sell-though, while the second example may include (at least in part) a more qualitative approach- such as a survey. Objectives may be either long-term (ongoing) or short-term to address certain market conditions.

Typical objectives for your co-op or MDF program may include one or more of the following:

» Increase sales overall
» Increase sales of specifi c products
» Increase partner share of voice
» Reinforce brand messaging
» Focus spending behind specifi c products, media, or events
» Increase utilization rates (overall, or from select channel partners, or from a select geography)

While these might be some of the more common objectives, there are many, many more. Each example is measurable, and you can choose more than one objective. Just be sure you have the strategies in place to attain each objective assigned to your program.

Step Two: Identify Goals
The second step is to identify goals for each objective and a basis for measuring progress. As you can see from simply reviewing the above list, each objective will require different metrics. While each objective will have a critical KPI (Key Performance Indicator), each strategy deployed to attain any one of the objectives will require associated metrics as well. So don't expect to have this fleshed out on the back of a cocktail napkin after a brief 5 minute discussion at your local watering hole. Completing this step takes some consideration. Take my word for it.

Step Three: Set a Baseline
The third step is to determine the current baseline for each goal which will be used as your starting point. It's often said, "If you don't know where you are now, how will you know how to get where you're going?" Truer words have never been spoken. By defi nition, all goals are measurable. So begin by identifying your starting point. ‘Nuff said.

Step Four: Set Up Reporting
The fourth step is to set up your reporting to identify trends over time. This will not only help you track progress, but it will help you understand the rate of change over time as your strategies evolve. It is worth repeating that you should track progress for individual strategies as well as tracking progress against each objective. It will be these tactics and strategies that you will be adjusting over time to accelerate the attainment of each objective. So, the whole effort is moot unless you track the individual strategies in your quest to deliver a more effective program.

While this sounds simple enough, apparently it isn't and if you're not doing this now, you're not alone. The good news is that it's not too late to start. I'll explore in future blogs ways to assign and measure specific objectives.

Craig DeWolf is Vice President of Sales and Marketing for CCI.

Craig's extensive experience spans over 20-years, across a variety of industries and distribution models. This background has given Craig an excellent perspective of the issues facing marketers and their distribution partners, and the solutions that will make them mutually successful.

by Craig DeWolf, CCI

Global channel programs...I've been in the Channel Marketing Business for over 25 years now and have seen the pendulum swing several times from a decentralized to a centralized structure-often within the same company.

Companies migrating to a decentralized structure (providing greater autonomy for global sales regions) are moving the control of program design and implementation strategies to the local level. The goal is to equip local managers with the means quickly make and execute business decisions that will give them a competitive advantage in those markets.

Conversely, companies moving to a centralized structure do so because they feel a need for greater control over the brand and sales process, access to more information, and lower costs through economy of scale.

The decision to change from one approach to the other are often associated with some economic trigger-such as the one the world is currently experiencing. Interesting to me is the fact that while some clients have moved from a centralized to a decentralized channel program, still other companies are making the opposite move. Clearly, it's a case of "the grass is always greener on the other side of the hill" as global marketers get fed up with the shortfalls of one approach as they discover the remedy is found in the attributes of the other.

It has been my privilege throughout my career to have maintained many of the same clients for 5 to 10-years, or even more. I have seen the pendulum swing back and forth within many of these same clients so often it makes me dizzy. Like the proverbial pendulum which finally settles in the middle, today I am seeing a more compromised approach to global channel marketing. Because of the software available for program management today, marketers can finally "have their cake and eat it too". Using a common global infrastructure to manage common programs such as training, sales tools, MDF/Co-op management, brand management, incentive management and more, today's global channel marketer can benefit from the efficiencies of a common infrastructure and centralized reporting, yet provide each region with the autonomy they need to tailor the program as needed to drive immediate bottom line impact. Ahh, what a wonderful time we live in, this is.

While this might seem like the panacea global marketers' have been truly seeking all these years, it also creates new challenges that catch many marketers by surprise:

• No one system really does everything well in terms of managing all the programs your channel partners need to successfully sell and promote products on a global scale-even Salesforce.com (despite their claims). This means that, for now at least, delivering a truly state-of the-art channel infrastructure will require integrating a desperate set of applications from a variety of providers-often in mixed environments (including both hosted and SaaS applications) to form one cohesive experience for your channel partners across a diverse multi-cultural, multicurrency environment.
• Not all systems are created equal: Make sure your program is well defined, before you select the enabling software. Clearly identify your requirements in advance of selecting your application. Software isn't an end-game, it's only an enabler. Your program is still the "steak", the software you select to run it on is only the "sizzle" (caution, it's not the other way around).
• Keeping tabs of all the legal, financial, and cultural implications of a global program requires more effort that anyone thought. CCI is not a law firm, yet clients expect us to understand legal and cultural impact of how a given incentive program will "play" with partners in Xpendastan (you know, just north of the Retalistan boarder). Well, if the laws changed yesterday impacting incentive payments to reseller sales reps, I'm not sure how we (or anyone) would know that. Even if we did-news flash-the program design, and the legal implications, are responsibilities of the global marketer. Keeping up with this might actually provide a worthwhile career for all the attorneys out there.
• Disparate systems mean disparate information. The challenge for marketers will be information overload, and identifying meaningful correlations from all the data gathered across the breadth of programs offered will keep your (or our) analysts busy. Imagine that, TOO much information! Our advice: be clear as to what your metric requirements are from onset, and those metrics align with your business drivers. Make sure the systems you are considering provides the information you need to simplify and facilitate key business decisions. When engaging new clients, we often START with the reporting requirements to make sure the appropriate information is captured at key points in the process. It's often too late to do this once the system is deployed without wasting time or money.

There is enough content in these four points to justify its own blog topic or whitepaper. Hmmmmm, maybe we'll have to do just that.

Stay tuned.

Craig DeWolf is Vice President of Sales and Marketing for CCI.

Craig's extensive experience spans over 20-years, across a variety of industries and distribution models. This background has given Craig an excellent perspective of the issues facing marketers and their distribution partners, and the solutions that will make them mutually successful.

by Craig DeWolf, CCI

Partner scorecards are a way to measure (and evaluate) channel effectiveness. For this purpose, we defined "Partner Scorecards" as a way to evaluate the effectiveness of your individual channel partners.

Over the last few years, we have seen a lot of trends in channel marketing. Based purely on a recent channel marketing conference Channel Focus North America, Partner Scorecards are all the rage this year as "Opportunity Registration" was over the last few years.

The reason is actually simple; when properly conceived, partner scorecards can help you simplify key business decisions such as: where to invest, what programs to keep or create, where to recruit, where to "disengage" from unprofitable partners and how and where to staff. I can already tell what you're thinking: "How can I get a piece of that?"

First, start with a blank sheet; don't copy what some other company is doing. Scorecards have to align with your unique go-to-market strategy. Trust me, there are no two companies with the same required attributes on their partner scorecards. At a basic level, it's a "report card" of partner performance. So, start by identifying the KPIs that drive your business and how those KPIs and related attributes extend to your partners. The scorecard for a manufacturer of long-sales cycle, high-value product is going to be very different than that of a manufacturer of short sales cycle commodity-oriented products. Although the data requirements in each of these instances will be quite different, the importance of the scorecard is the same, to quickly provide the information needed to simplify key business decisions.

Second, identify how each KPI will be measured along with the source of that data. Remember, there are two types of data that can be included on your scorecard, reported and behavioral. Reported data includes the information "claimed" by the partner (e.g.: vertical market focus, solution focus, etc) Behavioral data is obtained through "objective" performance measures, such as deal registration close rates. While behavioral data is favored, there is a place for reported data in your scorecard. What follows is a description of the various types of data that is reported on a scorecard:

Sales: While measuring sales performance is obvious, data should be broken down into more specific elements. For example, sales to certain demographic, vertical market segments, sales of specific product or solution categories. Including both unit quantity and dollar value is important as well.

Customer Relationships: Since sales and marketing is all about end-user sales,identifying key customer relationships is a critical component. If you are a high value/long sales cycle product, you may want to include detailed customer information. If you are a more commodity oriented product, while the previous points reflect best practices for the data included within your scorecard, there are even more best-practices to consider for reporting all this useful information.

Trends Reporting: Rather than simply reporting the static facts, charts and graphs that reflect trends over time are more useful when making at-a-glance assessments. Carefully selecting which trends to reflect will help expedite your decision making process.

Index reporting: Reflect KPIs in terms of an index which ranks the partner performance relative to a group of peers (Is partner "A" performing better or worse relative to other "Gold" partners in this KPI?). This index can be constructed based on a number of criteria, including: average performance with peers based on geography, business type, "tier" designation, or combination.

Roll-up: While we have talked about scorecards relative to an individual partner, when designing your scorecard system you should be able to design your reporting to include any group of partners. This is useful for evaluating relative performance between sales territories, to help plan staffing requirements, and conducting a "gap analysis" of channel coverage.

While stopping short of a specific recommendation, this article is intended to provide the foundation to help you jump-start (or evolve) your own scorecard program. It is important to understand that your scorecard will evolve over time as your ability to capture specific information improves and as new KPIs driving your business come to light. Don't be afraid to start small, or to simply focus on only one or two areas presented here.

Craig DeWolf is Vice President of Sales and Marketing for CCI.

Craig's extensive experience spans over 20-years, across a variety of industries and distribution models. This background has given Craig an excellent perspective of the issues facing marketers and their distribution partners, and the solutions that will make them mutually successful.

by Craig DeWolf, CCI

For most business-to-business marketers, a partner scorecard refers to the vendor’s evaluation of an individual partner or reseller as a means to gauge profitability and growth potential.

The inability to secure meaningful, actionable insight about partner and program activity is a serous issue. Like the old adage: “I know that half of my advertising is going to waste, I just don’t know which half.”

Factors that have limited the ability to develop valid metrics:

• The inability to effectively measure sell-through volume, particularly in a multi-tiered, multi-distributor channel model.
• The inability to correlate marketing program participation to incremental sales gains (and more importantly the direct and indirect cost of those marketing programs).
• Disparate systems and processes that can’t really provide roll-up reporting across a number of dimensions—because they were really never designed to do so.

Well, we are at the dawn of a whole new era. The technology and acumen are now available to vendors of all types to capture key insight about their channel partners, and individual channel programs. Armed with this insight, vendors can achieve greater channel optimization through improved program efficiency, partner effectiveness, and faster speed to market (or at least improved reaction time).

Technology exists to capture POS data,correlate program participation with its sales impact, capture channel profile characteristics (both reported and behavioral) and provide a single conduit to manage and track multiple programs with cross-functional reporting.

Indeed the pendulum has swung—in fact, the industry is in danger of collecting too much information(!) It is now possible to track sales contribution not just at the reseller company level, but the individual sales rep level. This includes effective sales volume, close ratios, length of the sales cycle, new vs. existing clients sales, new technology penetration, special skills and certifications, and much-much more.

I know what you’re thinking: “We’ve finally reached the holy grail of channel optimization. When can I start?”

Whoa there, Trigger. The real key to channel optimization lies not in the breadth of information you can capture, but the understanding of which leading indicators make sense for you in making the right business decisions. It is our experience that these indicators for program and partner performance can be vastly different depending on the type of product you sell, and your channel make-up. For instance, commodity products with short sales cycles are going to require different performance metrics than expensive leading-edge technology products with long sales cycles—particularly if the latter requires special channel skills and/or certification.

Next week I’ll explore how to create your partner scorecards , so stay tuned…

Craig DeWolf is Vice President of Sales and Marketing for CCI.

Craig's extensive experience spans over 20-years, across a variety of industries and distribution models. This background has given Craig an excellent perspective of the issues facing marketers and their distribution partners, and the solutions that will make them mutually successful.