Wrong: your promotional allowance program should be updated no less than annually to assure the program structure is aligned with your current objectives. What's more, as ROI seems to be the biggest issue expressed by marketers, there are techniques to assure your funds optimized against these objectives. By manipulating any combination of 8 different design variables common to all promotional allowance programs, your promotional allowance program can be both an effective "Carrot" or a "Stick" to:

• Leverage channel budgets to attain corporate objectives
• Maintain and extend existing partner relationships
• Recruit new channel partners with special "jumpstart" allowances
• Penetrate target segments, or geographic markets
• Win channel Mindshare and Share of Voice vs competition
• Leverage partner relationships with their existing customers to promote up-sell or cross sell opportunities
  
• Improve channel "readiness" by enabling training, certification, and sales incentive programs

Depending on your industry, these promotional allowance programs can fund or encourage WAY more business development activities that simply advertising, including:

• Demo Programs
• Telemarketing
  
• Events
  
• Purchase/Sales incentives
  
• Training and certification
• Facilities

Programs of these types are common to all channel programs today-all of which are core requirements to many channel or vendor businesses to be successful.

So, it's time to re-evaluate your promotional allowance program to assure it's aligned with the go to market strategies for your and your channel partners.

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.

Your success is directly tied to your ability to make it easier for the customer to do business with you and to provide the value-added services they'll buy. When you accomplish this, you won't have to worry about pricing, competition, or mergers because you will already have the keys to a very successful relationship. Your first and best customer is your channel partner; for your programs to succeed, you must know what your partners want. Only by asking your partners what would make it easier for them to do business with you will you be able to reduce redundancies and costs, and ultimately increase your competitive advantage.

How will the marketplace change your business?
Your customer is one of the best resources for accurate data. Ask your customers what is changing in the marketplace, and what will be different over the course of the next three years.

Why is that so important for your organization? Well, consider this. How can you sit in meetings, discussing how you are going to change your company, if you don't have a clue what's changing in your customer's world? That's a little scary. And yet, I've seen countless organizations talk about what they are going to change when they don't have a clue what's changing in the customers' world and in the market.

Effective Program Design & Management
When taking an inside-out approach to program design and management, there are four distinct areas of responsibility.

1. Good, Solid Information
Organizations often do not-and worse yet, cannot-make the best decision because they are unable to access the right data. And just as often, decisions are made based on data that is faulty, untrustworthy or outdated. What are you doing well, what could be improved? What do your partners, end customers and marketplace have to say?

2. Timely and Accurate Data
Channel promotion and incentive programs present companies with countless opportunities to gather information related to geographies, organizational size, revenue levels, products/solutions supported, training/ certificates achieved, markets served and contact information beyond the owner or principal. This information is essential in understanding which partners most effectively serve targeted markets as well as which warrant continued investment in programs such as co-op advertising, MDF and co-marketing.

3. Reporting and Analytical Tools
One of the most difficult problems faced by the channel marketing program manager is measuring the program and determining if objectives have been achieved. This problem is complicated by the uncertainty surrounding the correct measures to use when making assessments. Only if all activity is funneled through a central payment and tracking source will a fact-based environment that allows for the analysis and evaluation of results be created.

4. Ongoing Education
Ongoing training and education about the channel, end-users and competition is required to insure that those who make the decisions do so with the best foundation of domain knowledge possible.

By continually communicating and gaining response from your partners-- be it through social media, partner surveys, or old fashioned in person meetings-- getting this outside-in view of your channel programs will allow you to design and manage your programs for success.

by Michael Dubrall- Gilwell Group

As the Internet continues to play havoc with the traditional IT sales process, resellers are discovering a hard truth. Customers are flocking to interactive Web 2.0 communities being introduced by their vendors, downloading vendor videos from YouTube, "friending" their vendors on Facebook, and following their vendors on Twitter. Lured by the popularity of social media sites and the proficiency in which many vendors are starting to develop direct customer relationships, resellers are finding that the informational cord that used to bind them tightly to their customers has been severed.

From a market perspective, this is happening for all the right reasons. Customers get huge benefits by meeting their vendors on-line: better access to information, peer-to-peer networking, faster problem resolution, and easier vetting of new products and services. Besides, what is their alternative? All they can do with their resellers is find a website , download a data sheet, and call their sales rep for more information; a very time consuming process in today's hyperactive marketplace.

If they are going to survive, resellers need to take a hard look at their on-line capabilities and vendors have to help. Let's start with the basics - reseller websites.

Original web 1.0 websites are static and one-dimensional. They were meant to be used by people who were just learning the basics of email, internet, and on-line communications. These websites use "frames" to display documents and files that could (originally) be downloaded over dial-up lines and visitors (customers) were expected to download the information and then leave the site. Today there are more than 100 million of Web 1.0 sites, many of them set up and managed by channel partners. They look outdated and are difficult to use. Outdated web sites are slowly suffocating the channel as vendors just watch their resellers struggle.

Many vendors have moved to next generation web 2.0 websites, which allow visitors to do more than retrieve information. These sites are interactive, interconnected, and multi-dimensional. Their goal is to engage customers (stickiness), to give AND receive information through blogs, wikis, forums, RSS feeds, videos, social networking and more. They engage customers and satisfy more of their needs. Many web 2.0 sites have already evolved into full-blown communities, managed by the new Social Media organizations of IT vendors.

Customer buying behavior has changed a lot since resellers created first their web sites a decade or more ago. Purchasers are now in social media sites, getting product information, educating themselves about vendors, and comparing prices before resellers even know that a sales opportunity exists. Many end users even expect to purchase their products on-line and have them shipped without dealing with a salesperson at all! In other words, a significant (and growing) percentage of the market has moved into an interactive world that makes one-dimensional Web 1.0 reseller sites irrelevant and even annoying.

According to recent Channels of the Future research, SMB resellers give their own web sites a lowly 4.08 rating (out of ten) as to their effectiveness as a marketing or sales tool. Most reseller web sites are still lacking basic web site features like RSS feeds, blogs, wikis, or even forums. In fact, less than 14% of resellers have incorporated any Web 2.0 functionality at all! To make it worse, reseller employees are personally using Web 2.0 tools like social/business networking, blogging, and virtual communities much less than people working for IT vendor companies. The eventual result: resellers are increasingly absent from the sales conversation and vendors are moving ahead to build direct marketing relationships with their end-user customer base. Can direct (on-line) product sales from vendors or aggregators be far behind?

Channel Partners that cannot conduct their own on-line dialogue with customers are allowing their vendors to suck the air their marketing opportunities . The result, a slow death for channel partners.

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 and visit www.gilwellgroup.com.

For those readers that attended, I'd be interested in your response to the conference overall, as well as any key learning that may have come out of it. This is all somewhat subjective, as all attendees have their own agenda as to the desired learning from such meetings, as well as their actual take-away post conference. I have read impressions of this conference from other attendees on other sites, so I thought it was fitting to submit my own key take-aways:

The economy sucks for everyone right now. Can I use that word? In this context, I mean it in the true sense of the word (cut to the sound of a vacuum taking everyone's budget). During a recession, it is customary for vendor's to rely on their channel to "get the job done", yet -per a reseller panel-each has expectations of the other that are impossible to fulfill due to resource constraints and poor program execution. There was a lot of finger pointing at that session. But the take away from the debate was that resellers' (as a whole) were bad marketers and that vendors aren't sensitive to the needs of their channel partners which ---and this is key-is unique to each reseller, be it leads, cash flow assistance, or simply to ‘butt out' (queue next topic).

Manufacturer sales assistance for reseller-originated opportunities should be invited with their roles clearly defined: A reseller panel (and the conference host himself) articulated instances when a vendor's sales rep tried to "close" an opportunity outside the reseller's processes. This not only complicated matters, but jeopardized the closing due to conflicting information. Apparently, this happens more often than not. Could you be guilty of this?

The financial obligations of vendors to assure channel partner solvency during tough economic times. This is another hotly contested topic as democrat vs republican politics, or Daniel Craig vs Pierce Brosnan (or Sean Connery if you're as old as I am). The net result, though, is that for companies who rely on channel partners for their sales, there is a co-dependency for success, and that even something as simple as adjusting credit terms or as complex as developing sponsored leasing programs can go a long way to assure channel velocity, and maintain cash flow for channel partners-the life blood of small businesses.

Vendor's are totally enamored with Social Networking as "Marketing 3.0". Which is interesting, because no one really knows how to formulate (or at least articulate) a clear social networking strategy-especially for channel partner integration--nor provide clear metrics. But yet, the room falls to a hush when the subject comes up.

Segmenting "lifestyle" channel partners from those who have real growth potential. Gee, there seems to be something like 40,000 registered VARs and resellers in North America (don't hold me to those figures), yet most of them are content with their size with no intention to grow (I believe the speaker said: "they already have their Ferrari"). So how can Vendors identify these "lifestyle" partners so as not to over invest? It takes a comprehensive profiling and scoring system that includes both objective and subjective data-and the list of characteristics is the subject of a future article...so stay tuned for more on that (via a workshop that was conducted by yours truly)

Co-op/MDF programs are "mature" yet most vendors struggle with how to get it right. Per a luncheon presentation, theses funds can make up the lion's share of the channel budget, yet most vendors are not confident that they can effectively measure ROI from their program. I could write an article on this, but I already have. There is enough content on this blog and website to end that problem for ever-‘nuff said.