Back in the 90's (remember then? Clinton was president. We had a budget surplus, stocks were increasing in value. The internet was in it's infancy as a marketing medium...but I digress). Back then there was a HUGE marketing movement called "Word of Mouth" or WOM for short. The "concept" behind WOM (as it was called to us marketing veterans) was the realization that there was no better form of advertising than personal endorsements by actual consumers....nothing you can pay for can actually be stronger for the brand. To substantiate it, there were all kind of statistics tossed around like: "if someone likes your product they'll tell 4 people, but if they DON'T like your product, they'll tell 40 people". Don't hold me to those numbers, but those metrics are about right.

Well, there were all kinds of newsletters and seminars devoted to "Word of mouth" Marketing as a result of this implied power of referral (positive or negative). While basic in concept, for some reason this was a "revelation" to many marketers.

With the dawn of the "Information age" , what was established as "Word of Mouth" marketing became "Peer to Peer", or in it's more simpler form "P2P". Suddenly, people could actually email their friends about your product, or even join user groups and bulletin boards to pontificate on the virtues and/or frustrations of a brand. Wow!!! What a concept!

Now, as we close one decade in this 21st century we find ourselves as a morphing of the concept once again as P2P becomes "Social Networking."

What's the difference that drove this change? Suddenly the "Media is the message."

You see, the core of "WOM" was "Keep your customers happy" because if you don't, they'll tell a bunch of people and sink ya'. If you do, they'll be your greatest ambassador. Hey, look at Nordstrom's. They have less than half the budget of their nearest competitors but had a stronger growth rate because of the customer satisfaction levels.

Now, however, with "Social Networking" we have somehow gotten away from these core marketing attributes of WOM to focus on the vehicles themselves.....from Twitter to submitting restaurant reviews on "Yelp". My point? The technology itself will constantly change, so don't get hung up there. The principles of WOM should not be forgotten and should really be the basis for your social networking initiative.

Previously we talked about five compelling benefits for outsourcing your channel program: controlling costs, increasing operational efficiencies, reducing labor costs, focusing on core business, and reducing risk.  In order to determine whether outsourcing is right for your organization, you will need to validate if your current processes in-house are cost-effective versus outsourcing.  You will need to research the key processes in your program to determine how long they take to complete and how much they cost on an hourly basis.

Here is an example of a spreadsheet you can build for this assignment:

An explanation of each process is as follows:

Plan Submission and Approval: the method by which a partner makes a request for funding of market development campaigns or activities and the procedure by which the program sponsor (manufacturer) approves them.  This submission can range in scope from a partner’s annual business plan to a claim form for a print advertisement.  The process also must account for your time to review, act on, and communicate your approval to the partner.  In your assessment of total hours, make sure you include the time needed by your partners to generate and submit this information to you.  This is often referred to as the “opportunity cost” invested by partners to participate in your program.

Claim and Remittance Processing:  the method by which the manufacturer receives, audits, and issues payment on the funding claim.  This is a process area where partners too often experience the most delays in manufacturer response and, not surprisingly, the largest block of labor hours in a campaign lifecycle is found here.  Concurrently, opportunities to streamline tasks and workflow and increase functional efficiencies are greatest in this area.

Partner Operational Support: this is the customer service component of the program, where the manufacturer provides assistance to the partner.  The assistance could be technical (i.e. logging on to the hosted site) or program specific (clarifying rules of engagement).  The method of delivery might come from a toll-free call center or a simple exchange of e-mails.  In larger companies, these service hours may already be logged and tracked by an internal system to measure support costs and customer satisfaction.   

Report Preparation:  the aggregation of program data over time from partner profiles, funding requests, pending claims and processed payments, needs to be presented in a logical framework for analysis and subsequent decision-making.  Whether done on spreadsheets or via other software applications, the collection process is often decentralized as different parameters are created by various program stakeholders in sales, marketing, finance, and executive management.  Report output to partners can range from simple fund balance statements on paper to detailed market spend trends viewable from an online dashboard.  Hours for preparing both administrative and partner reports must be taken into account in assessing effort and cost.

Reconciliation:  this could be understood as the final reporting step and is primarily executed by the accounting or finance department.  All program incentive funds for partner activities must be accounted for in a “snapshot” at month or period end.  These funds move linearly in a marketing activity lifecycle—requested, approved, claimed, and remitted.  In the reconciliation process, the beginning fund balance must be broken down to show all paid and unpaid funds in their various stages.  If there are multiple funds from a program or programs, they are also rolled up and reconciled here.   

In using the above spreadsheet, for each process you would estimate on a monthly basis the total number of hours and then attach a “baseline” or average cost per hour.  Monthly hours will likely involve multiple persons working in the process area, not just one individual.  For estimating your baseline cost, be sure to consider that labor required to complete tasks in one process might be more or less expensive compared to another process.  Remember that the numbers in the spreadsheet are for demonstration purposes only.  Your mission is to do the research within your channel group, plug your findings into the spreadsheet, and come up with an estimated total cost of operating your channel program.  You will then be ready to compare your legacy costs against an outsourcing model.  Good luck!

Michael DeBarros is the Business Development Manager at CCI. He is a veteran of 22 years in technology sales and has held channel management positions at two leading software companies. Michael's experience in working for both partners and vendors offers unique insight into today's channel challenges.  

by Mike Dubrall, Gilwell Group

Despite the fact that your inbox is constantly filling up, email is becoming less important for B2B communications, especially with resellers. But, how can this be when your Inbox is always overflowing. The answer is that what you are getting in your inbox looks like email, but it's not really email. It's the early signs of a social media revolution.

Many partner managers set up their social media profiles to forward alerts and messages to an email address for later review. So it seems like the number of emails is increasing. However, emails are actually being replaced by all sorts of messages and alerts flowing from on-line communities, LinkedIn, Twitter, and you're other spaces. (If you want an empty inbox, turn off the notifications, but that would cut you off from a large part of the social media experience.)
Personal email used to be very important to me. I would log into my Microsoft Outlook every morning to check email (much like I used to use my new cell phone a few years ago to check voice messages every day on the drive to and from work). Review and delete, review and respond, drag to a folder for later action, and so it went until the inbox was mostly empty.

Now, I start my day on LinkedIn checking messages, taking a few minutes to visit my important groups, and usually leaving a few comments on the latest postings. Then it's on to my communities where I do the same thing. Twitter is, of course, running in a browser which gets visited regularly. Quick tweet on my current activity, thoughtful comment on a blog post here, review an invitation to join a group in another vendor community, and so it goes all day long (and all night too if I can stay awake).

When I finally get to Microsoft Outlook to check my email, most of the important messages have already been taken care of. So I review the RSS feeds. Recheck notices from all the communities. Delete all the electronic newsletters (how did I get on those lists?). Open my calendar. Then it's time to check Twitter again.

When I want to meet with someone, I start with a LinkedIn message, so they can check my profile before they respond. If they are following me on Twitter (or vice versa), I send a direct tweet. Often, they respond in minutes, especially if they have Twitter on their phone. If they are colleagues, we can use IM or open an on-line chat in Facebook. For complex issues, I can just start a discussion in an on-line community and trade messages 24/7. Of course, if it's really urgent, there is always Skype.

Broadcast email also used to be important. It was an important weapon in our marketing arsenal. And we all used it incessantly - often enough to create a huge opportunity for spam filter developers. Today, broadcast email is rated by resellers as the least effective marketing program provided by their vendors.

No wonder resellers don't like it much. Millions of emails are sent to channel partners every week with all sorts of important or mundane messages. How many actually make it through to the intended recipient? Unfortunately, the answer is very few. First, there is the issue of outdate email addresses when people change companies or accounts. Second, most experts say that up to 40% are blocked, most without bounce notifications being returned to the sender. Third, even if the message gets though the corporate filters, a large percentage then ends up in a desktop junk file, especially if it contains frequently blacklisted words like webinar or training. So when a vendor thinks it's sending emails to 20,000 channel partners, there is just no telling how many emails (if any) make it though the technical gauntlet and actually end up in front of an intended recipient. Probably very few.

For broadcasting information to a large group, Social Media is much more effective than email. Savvy vendors now post information about meetings or webinars in the relevant partner communities and members get notified immediately. No worries about current email addresses or reseller spam filters. For example, the Social Media Academy recently posted information about a webinar in a few large on-line communities, collected almost 1,000 registrations, and conducted the session - all within 30 days at no cost and without sending out a single email to market the event.

Chanel Managers. Wake up. Move on. Get connected. Email is the new snail mail. You can no longer communicate up and down the value chain unless you are in the same social media spaces as your customers and resellers.

Michael Dubrall is the Managing Director of Gilwell Group, a research and consulting company that researches "Channels of the Future." He is a regular contributor to Channel Champion and other industry blogs on the subject of next generation partnerships. Join the Channels of the Future Group on LinkedIn.

On Thursday, March 12, Chris Fletcher at AMR Research will discuss how accurate downstream data provides better visibility into upstream supply chain management in a free webinar. Discover best practices in collecting and applying channel data to improve visibility into demand signals, inventory levels, and customers.

• Why channel data management is important.
• Best practices in collecting and applying channel intelligence.
• How to read demand signals.
• How to accurately forecast: Fact or Fiction?

Free to attend. Click here to register.