b2b channel incentive benchmark study

2012 Channel Incentive Benchmark Study

Steven Kellam, Vice President of Sales and Marketing

Do Vendors Really Understand What Partners Want?

A Comparison of Vendor and Partner Attitudes Towards Incentive Programs

Why We Understand Channel Incentive Programs

www.channelmanagement.com [email protected]

Complete Incentive Solutions

Professional Services At Every Step

Program Design Program Development Program Evolution

Highly Configurable SaaS Application

ROI Metrics Multi-currency/lingual Fund allocation New fund set up Approval workflows Partner and Activity –

add, deletes, changes Email alerts

Program Management

Available follow-the-sun support

Claim administration Payments Program administration

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Comprehensive Solution Set

Distributor Reseller Sales Reps Consumer

Co-op/MDF

Streamline management of joint marketing programs

Marketing Planner

Plan marketing programs, forecast and measure ROI SPIF

Run short- and long-term incentive programs Sales Performance Rewards

Reward channel partners for attaining sales goals Trade-In Rewards

Manage incentive programs requiring physical return of goods Opportunity Management

Deal Registration, Lead Management, Referral Rewards and Special Pricing


Baseline Definitions

Co-op Programs • Marketing allowances are accrued as a percentage of past sales • Guidelines are well defined, with comprehensive proof-of-performance

requirements • May require minimal pre-approval requirements fostering ease-of-use • Lend themselves to expense accounting

MDF Programs

• Discretionary funds, not ‘owned’ by partners • The available funds are often not announced in advance, but are

negotiated to achieve specific goals • Often require less complete proof-of-performance documentation than

traditional Co-op programs, and pre-approval is required • Lend themselves to contra-revenue accounting

The Survey


Survey Focus

• Perceived effectiveness across a variety of program types o Including gap in vendor/partner perceptions

• Deeper insight into MDF and Co-op practices o Overall o Inclusion of social media and Integrations

• Areas of focus from 2012 (incentive programs and more) o Pain points in 2012 o Key initiatives for 2013


7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100

• Co-op/MDF/BDF

• Sales Rebates – stretch goals

• SPIF and Loyalty Programs

• Deal Registration

• Referral Rewards

• Trade-In Programs

• End User

Incentive Programs Questions Included


Methodology

• Quantitative, multiple-choice questionnaire

• Where possible, many questions were “mirror image” to compare perceptions between vendor/partner audiences

• Focus on B2B Technology

o Hardware o Software o Office Automation o Telecommunications (hardware and services)

• Results are indicative of trends and attitudes


Survey Purpose

• Share • Think • Ask questions • Do things better


Survey Conclusion: Rainbows and Unicorns?

Vendor and Partner Profiles


Responder Profile: Manufacturer/Vendor Responses

Profile: Manufacturers/Vendors

• 64% Channel sales and marketing positions

• Primary regional scope: North America, Global

• Sell a majority (80%+) of their products through the channel



2012 2010

North America 34.2% 46.4%

Global 36.0% 37.1%

Europe/Middle East/Africa (EMEA) 14.4% 10.3%

Japan/Asia Pacific/India 11.7% 4.1%

Latin America 3.6% 2.1%

Responders were split between North America and global positions.

Global 36%

North America 34%

Europe/Middle East/Africa (EMEA)

14%

Japan/Asia Pacific/India

12%

Latin America 4%

What is the regional scope of your responsibilities?

Trend Alert: APAC becoming more strategic for growth


Audience Participation

In regard to program funding models, which selection best represents discretionary funding spend vs. accrual?

a) 21%

b) 31%

c) 44%



44%

31%

22%

3%

What best describes your program funding model(s)?

Discretionary

Accrual per partner

Contractually committed

Other (please specify)

Discretionary funding almost 50%

Trend Alert: Movement to MDF (Market Development Funds)



0% 10% 20% 30% 40% 50% 60% 70%


OEM and Alliance Partners

Influencer/Referral Partners

Newer partners with a growth sales trajectory

Well established partners with a track record of sales

With what type of partner is the largest percentage of your partner marketing budget (marketing with and marketing through) being spent?

Actions around established partners, conversations around growth partners.


Profile: Partners

Trend Alert: While majority of partner responders considered themselves “VARs,” managed services providers represent growth trend

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

OEM

Hosting/Infrastructure Provider

Direct Marketer

Consultant

Independent Software Vendor

Systems Integrator

Retailer

Managed Services Provider


Distribution

VAR

Which of the following categorizes your organization?


Profile: Partners

0% 5% 10% 15% 20% 25% 30% 35% 40%

$3.0-$8.0 Million

$8.0-$20 Million

< $1.0 Million

$1.0-$3.0 Million

> $20.0 Million

What is the approximate annual sales volume of your organization?

Nice mix – while largest partners are a big group, majority still in $1M to $20M.



What percentage best represents partners with 15+ vendors?

a) 14%

b) 26%

c) 43%


Profile: Partners

More than 15 39%

9-15 21%

4-8 26%

1-3 14%

Approximately how many Vendors do you work with as an Authorized Reseller?

In most cases – you are not alone.


Conclusions: Profile

• Vendors o Many moving to discretionary

spending o Some even leaving Co-Op behind

• Partners o Partners continue to work with

many, many vendors

Program Usage


Program Usage: Manufacturers/Vendors

2012 2010

0-10% 42.6% 39.8%

11-20% 26.7% 20.5%

21-30% 10.9% 12.5%

31-40% 6.9% 12.5%

41-50% 3.0% 8.0%

More than 50% 9.9% 6.8%

More than 69% of the responders spend less than 20% of budget on incentive programs.

0-10% 42%

11-20% 27%

21-30% 11%

More than 50% 10% 31-40%

7%

41-50% 3%

Which figure best represents your entire investment in channel incentive and reward programs as a percentage of your entire

channel/partner budget?

Trend Alert: Many Vendors have to do more with less



Sales and Marketing Training for Channel Partners 55.7%

Joint Marketing Planning/Joint Business Planning 50.5%

Co-op/MDF 46.4%

Technical Training 44.3%

Opportunity Registration/Management Programs 32.0%

Lead management to channel partners 25.8%

Volume Rebate Programs 19.6%

Partner Sales Rep-targeted SPIF Programs 18.6%

Provisioning/Pricing/Customer Quote Tools 16.5%

Marketing Resource Center 14.4%

Referral Reward Programs 7.2%

In the context of all program types, incentive programs at large fall just behind sales and marketing training in importance.


Referral Reward Programs

Marketing Resource Center

Provisioning/Pricing/Customer Quote …

Partner Sales Rep-targeted SPIF …

Volume Rebate Programs

Lead Management to Channel Partners

Opportunity Registration/Management …

Technical Training for Channel Partners

Co-op/Marketing Development Funds

Joint Marketing Planning/Joint Business …

Sales and Marketing Training for …

Select the MOST important programs that are critical to achieving channel program success?


Program Usage: Partners

Co-op/MDF 55.6%

Deal Reg./Opportunity Management 48.6%

Technical Training 36.1%

Sales and Marketing Training 36.1%

Volume Rebates 36.1%

Receiving leads from vendors 29.2%

Vendor-sponsored SPIF Programs 27.8%


Referral Rewards Programs 12.5%

Provisioning/pricing/customer quote tools 8.3%


Partners feel that incentive programs are more important than sales & marketing training with Co-op/MDF and deal registration/opportunity management programs leading.

0% 10% 20% 30% 40% 50% 60%


Provisioning/pricing/customer quote tools



Vendor-Sponsored SPIF Programs

Receiving leads from vendors

Volume Rebates

Sales and Marketing Training

Technical Training

Deal Registration/Opportunity Management …


Select the three (3) vendor-provided programs that contribute the MOST to your success?



Referral Reward Programs 40.0%

Provisioning/Pricing/Customer Quote Tools 37.9%

Partner Sales Rep-targeted SPIF Programs 29.5%

Volume Rebate Programs 28.4%


Opportunity Registration/Management Programs 14.7%

Co-op/MDF 13.7%

Technical Training for Channel Partners 12.6%

Lead Management to Channel Partners 11.6%

Sales and Marketing Training 7.4%


Vendors see minimal results from referral programs.



Sales and Marketing Training for Channel …

Lead Management to Channel Partners

Technical Training for Channel Partners


Opportunity Registration/Management …


Volume Rebate Programs

Partner Sales Rep-targeted SPIF Programs

Provisioning/Pricing/Customer Quote Tools


Select the LEAST important programs that are critical to achieving channel program success?

Trend Alert: Seeing Referral going by the wayside at major players



0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Technical Training


Deal Registration/Opportunity Management Programs

Vendor-Sponsored SPIF Programs

Sales and Marketing Training

Volume Rebates

Receiving leads from vendors

Joint Marketing Planning/Joint Business Planning


Provisioning/pricing/customer quote tools


Select the three (3) vendor-provided programs that contribute the LEAST to your success

Referral Rewards programs were ranked the LEAST effective vendor-provided tool, followed closely by provisioning/ pricing/ customer quote tools and marketing resource center.



Sales readiness and analytics are key.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%


Cumbersome or slow partner payment and reimbursement processes (for …

Managing channel conflict (between partners)

Managing channel conflict (between channel and direct sales)

How to engage with/leverage influencers

Complex or cumbersome processes

Help partners migrate to new business models (cloud)

Ineffective sales and marketing capabilities from channel partners

Poor channel communication/interaction

Improve alignment of business goals and investments with partner …

Poor analytics tracking ROI for channel programs

Sales and marketing readiness from channel partners

What are the major issues that currently concern you about your channel program?



0% 10% 20% 30% 40% 50% 60% 70%


Vendor help with migration to new business models (cloud)

Sales and marketing readiness support/training

Improve alignment of business goals and investments with Vendors

How to engage with/leverage other partners in vendor/partner community

Managing channel conflict (between partners)

Ineffective sales and marketing capabilities from channel partners

Poor analytics / data to help determine ROI

Cumbersome or slow partner payment and reimbursement processes (for …

Managing channel conflict (between partners and Vendor direct sales)

Poor partner communication/interaction

Complex or cumbersome processes

What are the major issues that currently concern you about the vendor/partner programs you participate in?

No real surprise here – partners want simplicity and clarity.


Conclusion: Program Usage

• Connected o Co-op/MDF, Rebates are very important to success o Referral is ranked as least important

• Disconnected o Vendors prioritize ROI and sales readiness

while partners want simplicity, clarity, and communications

Co-op/MDF Programs


Co-op/MDF: Manufacturers/Vendors

Trade Show and Conference Attendance 43.4%

Customer Seminars/Road Show/ Floor Day/Webinar 41.0%

Event Sponsorship 37.3%

Newsletters/Email Campaigns 34.9%

Sales Incentives (SPIF, rewards, contests) 32.5%

Telemarketing/Marketing List Expenses 24.1%

Sales and Technical Training/Certifications 22.9%

End-User Promotions 21.7%

Literature/Collateral/Case Studies 19.3%

Direct Mail 18.1%

Demo Equipment 16.9%

Biz Dev efforts are considered to be the most effective use of funds—at the expense of traditional marketing programs.

0% 5%

10% 15% 20% 25% 30% 35% 40% 45%

For your Co-op/MDF program, which reimbursable activities that you currently offer to your partners

represent the MOST significant contribution in building business for you and your partners?


Co-op/MDF: Partners

Preferred activities parallel that of vendors – partners believe that incentive programs and Biz Dev activities are the best use of funds to help build their business.

Demo Equipment 46.9%


Customer seminars/ road show/ floor day/ webinar 32.8%

Website Development and management 28.1%


Event Sponsorship 25.0%

Telemarketing/ marketing list expenses 23.4%

Sales and technical training /certifications 21.9%

Trade Show and Conference Attendances 20.3%

Funded Headcount/Brand Champion expense 20.3%

0% 5%

10% 15% 20% 25% 30% 35% 40% 45% 50%

For your vendor-provided Co-op/MDF programs, which are the MOST important reimbursable activities for your business?



Traditional advertising efforts are losing favor among vendors.

Print Advertising 37.8%

Broadcast Advertising 34.1%

Direct Mail 22.0%

Product Catalogs 22.0%

Telemarketing/Marketing List Expenses 17.1%

Online Advertising - Display 15.9%

Social Media 15.9%

Corporate Memberships 15.9%

Public Relations 14.6%

Online Advertising (Google Pay Per Click or similar) 13.4%

0% 5%

10% 15% 20% 25% 30% 35% 40%

For your Co-op/MDF program, which reimbursable activities that you currently offer to your partners

represent the LEAST significant contribution in building business for you and your partners?


Co-op/MDF: Partners

Again, print-based activity seems unpopular as does all traditional promotional activity.

Broadcast Advertising 38.7%

Print Advertising 37.1%

Direct Mail 25.8%

Thought Leadership content development 24.2%

Product Catalogs 24.2%

Social Media 22.6%

Corporate Memberships 22.6%

Online advertising (Google Pay Per Click or similar) 21.0%

Demo CD / flash demo/ video 21.0%

Public Relations 21.0%

0% 5%

10% 15% 20% 25% 30% 35% 40%

For your vendor-provided Co-op/MDF programs, which are the LEAST important reimbursable activities for your business?



Improve analytics and ROI 50.0%

Improve marketing support/program planning 46.3%

Improve marketing execution by partners 42.7%

Improve partner support and issue resolution 25.6%

Closed-loop process tied to POS data and/or deal registration 18.3%

Integration with SFA/CRM system 17.1%

Revise guidelines to better reflect company goals 17.1%

Streamline administration 14.6%

Overlay/ tie back sales data to Co-op/MDF spend 13.4%

Faster payment process 12.2%

Global standardization 8.5%

Vendors are most interested in improved analytics with a strong lead programs

0% 10% 20% 30% 40% 50%

Global standardization

Faster payment process

Overlay/ tie back sales data to co-op/MDF …

Streamline administration

Revise guidelines to better reflect company …

Integration with SFA/CRM system

Closed-loop process tied to POS data and/or …

Improve Partner support and issue resolution

Improve marketing execution by partners

Improve marketing support/program planning

Improve Analytics and ROI

What would you MOST like to change regarding your Co-op/MDF program

Trend Alert: 1) ROI is hitting

marketing departments

2) “Partner Love” Portal


Co-op/MDF: Partners

Simplified guidelines and administration 60.7%

Joint marketing planning for optimal program usage 39.3%

Faster payment and reimbursement 32.8%

More predictable allowances 32.8%

Marketing assistance 29.5%

Faster turnaround of funding requests/prior approvals 26.2%

Improve program support and escalation processes 23.0%

Partners feel that vendors need to streamline their programs.

0% 10% 20% 30% 40% 50% 60% 70%

Improve program support and escalation processes

Faster turnaround of funding requests/prior approvals

Marketing assistance

Faster payment and reimbursement

More predictable allowances

Joint marketing planning for optimal program usage

Simplified guidelines and administration

Which areas do you think most vendors should focus on to improve their Co-op/MDF programs?


Conclusions: Co-op / MDF

• Connected o Biz Dev activities like events, seminars and

trade shows, ranked highest o Traditional advertising and print falling out

of favor o Referral is ranked as least important

• Disconnected o Vendors want ROI data, partners want

simplicity o Demo equipment very high for partners and

very low for vendors

Social Media


PureChannels Slide insert



Do majority of vendors currently reimburse partners for social media (via MDF)?

a) No

b) Yes


Social Media: Manufacturers/Vendors

68% of vendors do not support their partners’ social media efforts. Of those that do, most only supply content. Only 7% of vendors reimburse for social media activity through Co-op/MDF.

0% 5% 10% 15% 20% 25% 30% 35% 40%

We reimburse for social media in our Co-op/MDF program

Yes. We provide content for our partners to use in supporting social media, but we don’t

reimburse for it in Co-op/MDF

No, because our partners haven’t expressed interest in social media

No, but we intend to

Do you support your partners though social media marketing?


Social Media: Partners

Yes 18%

No 82%

Is your social media effort funded by vendor Co-op/MDF allowances (at least in part)?

Most vendors are still not supporting partner efforts.


Social Media: Partners

Partners’ use of social media has flipped since 2010.

2012

2010 60%

42%

40%

58%

Do you currently use social media to build business and generate leads?

Yes No


Conclusions: Social Media

• Connected o Not too much

• Disconnected o Partners growing their efforts o Vendors are trying to catch up

Why the disconnect?

CRM/SFA Integration


SFA/CRM Integration: Manufacturers/Vendors

SFDC continues to be the most extensive SFA/CRM application used by prospects at 46%. Within our client base, there is an 80% use of SFDC.

I don't know 4%

Oracle 6% Siebel

6% Microsoft

Dynamics CRM 6%

SAP 9%

Other 23%

Salesforce.com 46%

What CRM/SFA solution is your company currently using (or considering)?


SFA/CRM Integration: Partners

Other (please specify) 36%

I don’t know 20%

Microsoft Dynamic CRM 16%

Salesforce.com 13%

SAP 7%

Oracle 4%

NetSuite CRM+ 4%

Siebel 0%

What CRM/SFA solution is your company currently using (or considering)?

Partner not as committed to SFDC, many use integrated helpdesk systems like Tigerpaw and Connectwise


SFA/CRM Integration: Manufacturers/Vendors

71% of responders value integrating some or all incentive programs into their SFA/CRM solution.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

I don't know

Not currently and no plans to do so

Yes, we are currently managing one or more programs on our CRM/SFA solution

Yes, data integration only but they are managed on separate systems

We are evaluating this option

Do you incorporate your channel incentive programs within your CRM/SFA solution?


Conclusions: Integration

• Desire is on the rise

o In every conversation we have with clients and prospects

o Different perspective between vendors and partners, SSO and CRM/ERP integration

o Goes back to ease of use vs. analytics

• Aspired to by all, the throttle seems to be budgets

Looking Forward


Looking Forward: Manufacturers/Vendors

Analytics is the # 1 priority for vendors in 2013, followed by sales technical support and enhancing the number and quality of leads.

Provide more opportunities for Partner collaboration …

Revise/replace partner portal and PRM capabilities

Modify/launch Opportunity Management Program

Streamline partner payment processes (for Co-Op/MDF …

Engage/support Influencer-type partners

Aligning/unifying partner communications (’marketing …

Consolidate back office systems and partner portal

Offer more incentives

Enhance marketing materials /marketing support for …

Modify/launch Sales and Marketing Training to channel …

Begin or expand Joint Marketing Planning with partners

Enhance number/quality of leads provided to partners

Provide more sales and technical support/education

Improve channel analytics, reporting, and ROI

Which best represent your primary initiatives for 2013?


Looking Forward: Partners

Partners are concerned about vendors taking more direct deals, competition from other resellers, and reduced leads from vendors.

0% 5% 10% 15% 20% 25% 30% 35%

Lack of marketing skills or resources

Cloud computing, and the impact of it on your business model

Lack of sales skills or resources

Adapting a Managed Services business model

Decreasing MDF availability

Decreasing incentives

Tightening credit terms

Stiffer competition from other resellers

Reduced leads from vendors

Vendors taking more deals direct

What are your biggest business concerns for 2013?




Retailer

Hosting/Infrastructure Provider

Direct Marketer

Agents/Master Agents

Independent Software Vendor (ISV)

Consultants

Alliance/OEM Partners

Managed Service Providers (MSP)

Distributors

System Integrators (SI)

Value Added Resellers (VAR)

What types of partners will be most key to your go-to-market strategy in 2013?

VARs still lead the way.



Most vendors expect their channels to carry a higher percentage of total sales for 2013.

3%

31%

66%

As a percentage of total company sales, how do you expect your channel sales revenue to change in 2013 vs. 2012?

Lower percentage of total About the same Higher percentage of total



Correspondingly, vendors expect to recruit more partners in 2013. We hear a lot about “value” vs. “volume.” 56% 31%

13%

What are your plans for revising your channel partner population base for 2013 vs. 2012?

Increase our total number of partners Keep it about the same Reduce our total number of partners



Which selection best represents % of vendors who expect to grow program budgets in 2013

a) 7%

b) 11%

c) 23%

d) 31%

e) 44%

f) 49%



Half the audience expects their channel budget to grow.

49%

44%

7%

Independent of staffing, what are your anticipated changes in channel program budgets for 2013?

Increase the budget to support the channel

Maintain the current budget level

Decrease the budget to support the channel



Despite an expected growth in total channel sales and partner population, less than half of the vendors expect to grow their channel management teams.

56%

39%

5%

What are your plans for internal staffing to support your channel programs for 2013?

Maintain the current level of staffing

Increase the level of staffing to support the channel

Decrease the level of staffing to support the channel


Conclusions: Looking Forward

• Connected

o Leads are important to everyone Partners are particularly focused

on leads

• Disconnected

o Sales and marketing skills ranked much higher by vendors

o Vendors expect revenue, program growth with limited staffing

Wrap Up


7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100

The Big 3

1. Analytics/ROI – driving everything • But remember – partners care about simplicity, clarity

2. Partner engagement/leads – Through-Partner Marketing • But remember – partners have not bought in yet

3. Focusing on the right partners: Value vs. Volume • But remember – accurately scorecarding partners really matters

Majority of results line up with what we hear from vendors.

THANK YOU!

Questions?

Steven Kellam Vice President, Sales and Marketing CCI: Channel Management Solutions

[email protected]

b2b channel incentive benchmark study

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