by Martin McNally
Director of Product Management, CCI

The saying "the buck stops here" has always been relevant in business. Embarking on a new channel incentive program is a prime example. There must be ownership. Decisions must be made and accountability must be accepted. The stakes are high, as a well deployed program involves multiple partner organizations, thorough communication, strong execution from all parties, and measurable data.

As the owner of a channel incentive program, you know the program is needed. Moreover, you've designed the program to be compelling to your partners with the eventual result of enhanced bottom lines for both you and them. Correct? Confident? To be convinced of a successful return on your investment, leave no stone unturned in its definition.

Program definition - not to mention results - benefits from a thoughtful analysis on your current goals as well as a careful review of history. Know your true needs - and that of your partners. Identify a program structure that will support those objectives and drive value through your demand chain. Do your goals align with corporate, partner and customer needs? What feedback do your partners have on your current and prior channel programs? What marketing activities or initiatives are generating the greatest ROI? Are you utilizing any market research? Are the reward and its value aligned to the desired behavior of your partners? Will your new program 'meet' or 'beat' competition, thereby winning valuable mindshare of the partner community? Will the program structure and operations generate actionable data?

This is just the beginning. A myriad of other considerations await and the synergies among them will actually help slay these dragons instead of overwhelm you. Once the program is defined, you'll see your vision deployed into an operable, measurable initiative. As you come full circle and obtain program and partner performance data with which to optimize the program, be sure to revisit all the points evaluated during design so you stick to your objectives - or intentionally reset them. Now is no time to "pass the buck."

Why?

Well, to answer this question lets first address the appeal of a standardized global program: Today's multi-lingual, multi-currency SFA/PRM solutions facilitate a common platform throughout all global territories. The resulting standardization assures that consistency and simplicity program-wide is attainable now more than any other time in the past. What's more, the universal set of program standards and reporting inherent in the design give executives a strong sense of control and empowerment-which feels really good if you're writing the check. It is no wonder that this is the key selling point for system standardization. However, the people writing the check aren't the people that ultimately get the work done.

Very few channel partners indeed have a global trading area. And although the promise of a "Global Village" is nearing every day, I contend that for most of us it is far from a homogenous market. Channel marketing, by definition, implies "creating efficiencies through partnership to delivering products and services to the consumer". When designing a channel program, there is a lot to consider about its application on a global scale because while consumers en mass are indeed global, any one purchaser is local. For a global program to be truly effective, there needs to be common standards across the following: category maturity, channel maturity, regulatory requirements (as to how incentives may earned and paid among them), GTM strategy, solution "mix", value added requirements that must be fulfilled by the channel, distribution strategy, availability of local resources, logistics and fulfillment, culture and language (and its impact on the sales process), business processes associated with program management, marketing mix, pre- post sales training support requirements, customer purchase motivations..........do I really need to go on?

The point is, any difference in any one of these conditions from market to market will require some adaptation of your program. Therefore, the sheer number of conditions that require localized adaptation then multiplied their relative importance to your channel GTM will address the full scope of localization required for your program to be equally effective globally.

The good news is, that there are solutions out there that will allow you to "have your cake and eat it too" through localized flexibility and centralized reporting and control. But no solution is ideal for everyone ("You can please some people all of the time or all people some of the time......"), so it's best to REALLY understand your requirements before you completely push your pendulum from localization to centralization (or visa versa). In closing, I repeat what I stated in previous posts: it shouldn't be a matter of one extreme of the other (as seems to happen), as the ideal global program is likely a compromise between local flexibility and centralized systems. I know we can help you get there.

I recently read an survey performed by a noted consultancy which stated that global program standardization managed via a common infrastructure was among the top 3 investment priorities in 2010 for global channel marketers within the technology industry. This is of no surprise considering that technology has changed through the years thus enabling infrastructure standardization to exist. That makes perfect sense...after all, what home office in their right mind would want to disseminate funds and program authority to channel partners on a global scale to spend willy nilly without having any controls in place? (BTW: "willy nilly" is a technical term for "hap hazardly" which itself is a technical term for.....well, never mind).

Well, at least one vendor we know well does...after 2 years of going to a completely centralized model to manage their global programs, they have announced intent to move back to a decentralized model permitting only local controls of program design and execution. This shift back makes perfect sense to me too. The "promise" of globalization and standardization sounds great and all, but under the mantra of "think globally, act locally" perhaps there is an admission that business practices require attention to local needs and customs as much (or in this case more) than centralized insight and controls. I've often attested to the fact that the best position is somewhere in the middle, but often the forces of office politics are at work. The pain is real strong on one side, so the tendency is to compensate by moving to the extreme opposite side, sighting: "See, I told you that having the pendulum on their side wouldn't work".

Hmmmm, the more things change, the more they stay the same.

by Martin McNally
Director of Product Management, CCI

Like any business initiative, channel incentive programs must be measurable to determine their impact and value to an organization. Data is power, provided that it is explainable and actionable. ROI's are critical success factors and you have to measure them before you can use them. Given the complexity of incentive programs, what attributes are most critical to measure to track program success? Regardless of measurements you use and the weight you put on each one, it's essential to understand that each measurement is likely influenced by another.
We gather metrics at a variety of levels to gain ROI insight. We must map them to one another to garner the best intelligence - tactical to business, business to program, and many relevant permutations among and within the chain.

As discrete as a single measurement may be, it is not an island. There is a ripple effect. Just as a sales transaction is the result of multiple activities performed by a channel partner, so too is attainment of another business outcome - ROI. One metric, with its own ROI, feeds another metric and influences that ROI too. You must anticipate and manage these relationships to make best use of your collective ROI.

Once you have defined your ROI metrics and measured their results, piecing them together is the next step. Tactical metrics are tied to individual marketing activities conducted by channel partner. Such as: How many opened your email campaign? How many attended an event? How many resulting demos were scheduled? Business metrics are separate from tactical measurements, though both are equally reliant on the same activities. As a separate measurement, a business metric is made possible via the aggregation of multiple activities. Aggregate and analyze tactical metrics to identify, for example, product line or business-level achievement such as new customer count or revenue growth. Then, take the next step to determine how all these indicators enabled you to meet your program goals.

ROI should be defined and measured at multiple levels - across your program lifecycle and among its many moving parts. If one metric is not generating the desired results, or more fundamentally is hard to measure, look underneath it or alongside it to determine if other dials can be adjusted too.