the new world of channel incentives

The New World of Channel Incentives

© 2016 SiriusDecisions. All Rights Reserved 2

Presenters

Steven Kellam

President

CCI | Global Channel

Management

Kathy Contreras

Research Director

Channel Marketing Services

Sirius Decisions


Agenda

A Review of the Basics – MDF Best Practices

• Key considerations for MDF/co-op programs ▶ necessary fundamentals

• Defining success measurements ▶ key metrics

• How to optimize ROI ▶ program considerations and best practices

New State of Channel Incentives

• Where incentives are headed ▶ thinking beyond MDF

• A good place to start ▶ partner types/personas, partner journeys, etc.

• Keys to future success ▶ considerations and strategies for success

MDF/Co-op Program Best Practices


Sirius Perspective: Understanding common challenges associated with MDF and co-op

programs is important to strong program development.

ROI Optimization Challenges:

• Lack of Resources. The majority of partners are small to mid-size businesses with busy people stretched across multiple vendors and products, with limited time and money to build effective marketing campaigns.

• Lack of Knowledge and Skill. Most partners do not have a high-level of experience and skill at demand generation. Yet, most partners are given a portal, an instruction manual and practically no guidance about how to make use of the marketing tools and funding suppliers provide them.

• Complexity of Process. Clear processes with simple rules, difficulty of processing, speed of payments (30 days or less), access to information (online status/tracking and updates), etc.

• Lack of Incentive. Many supplier programs do not provide a clear vision of “what’s in it for me” or a clear understanding what is required/involved for program success.

Common MDF/Co-op ROI Challenge


SiriusPerspective: Provide partners with pre-packaged plays that offer very well defined

definitions of cost, duration, what’s included, estimated results, etc. for optimal results.

Prescriptive Marketing Programs: Menu-Based Plays

Play TypePay-Per-Click

Ads (PPC) Ad Retargeting

Multi-Touch –

Email/TM

Social Media

Syndication

Database

Builder

Appointment

Setting

VIP

Roundtable*

MDF Cost(Example in US

Dollars)

$500 $TBD $1,200 $TBD $2,000$2,500/4 Appts.

$4,000/8 Appts.$10,000

Duration 30 Days 30-45 Days 60-90 Days 60 Days 15 Days 30 or 45 Days 6 Weeks

What’s

Included

• Keyword List

Building

• AdWord

Placement

• Inbound

Support

• Biweekly

Reporting

• Web Tracking

• Customized Ad

• Landing Page

• Bi-weekly

Reporting

• Three- Touch

Email

• Video Training

• Try & Buy Offer

• Content Creation

• Content

Syndication

• Lead Reporting

• Teleservices

• Account

Mapping

• Database

Cleansing

• Database

• Teleservices

• Confirmation

• Followup

Reporting

• Venue Mgmt.

• Teleservices

• Onsite Support

• VIP Takeaway

Estimated

Results15 MQLs 15-20 MQLs 25-30 MQLs 25-35 MQLs

300 Tele-qualified

Names

4 or 8 Onsite

Appointments

6-8 Onsite

Meetings


SiriusPerspective: Consider program success definitions and measurements, think

beyond proof of performance, with the ultimate goal of closed-loop lead reporting.

• Establish KPIs. Assign standardized metrics to each activity type.

• Set Minimum ROI Requirement. Require partners to estimate the results of their activities when requesting approval for projects and establish a minimum bar for approval.

• Tie to Reimbursement. Require that partners review and report results as part of the claiming process.

• Link to Deal Registration. To gain better visibility into activity results, position as a tool to drive deal registration.

Example Marketing Activity KPIs:

MDF/Co-op Success Definition and Measurement

ACTIVITY MINIMUM ROI METRICS ADDITIONAL METRICS

Emailing

Marketing

• Click-through rate

• Conversion rate (% that take action)

• Bounce rate (% of total emails sent that

could not be delivered)• MQL/SAL/SQL leads generated per

campaign/event

• Registered deals per campaign/event

• Closed/won rate

• Cost per lead

• Cost per opportunity/registered deal

• Cost per closed/won

Events • Number of registrations

• Number of attendees

• Cost per attendee

Telemarketing

Campaign

• Number of calls made

• Number of meetings secured

• Response rate = # of response / sales

# of total contacts


Program Goals

MDF/Co-op Program Considerations

Focus on overarching program goals:

• Increased partner utilization

• Optimized program ROI

• Improved partner experience

• Ease of doing business with

• Speed of process

• Etc.

• Establishment of performance reporting/ measurement

Consider compliance requirements:

• Regulation based on funding structure/how funds are earned

• May need to abide by accounting, anti-trust and other legislation

• GAAP/FASB

• Sarbanes-Oxley (SOX)

• Robinson-Patman Act

• Foreign Corrupt Practices Act

• Etc.

Apply program best practices:

• SiriusDecisions Fast Tracking Model (e.g. partner assessments, prescriptive-based programs, etc.)

• Leveraging the power of channel technologies (e.g. CMM, CIM, etc.)

• Services marketplace third-party services for partners with limited expertise

• Future incentives expansion –thinking beyond MDF

Compliance Best Practices

• Future incentives expansion –

thinking beyond MDF/co-op

The New State of Channel Incentives

Thinking Beyond MDF and Co-op Programs


Sirius Perspective: Past performance is not an indicator of future growth; suppliers

should look beyond revenue/sales and develop incentives that drive future performance.

Channel Incentives in the Rearview Mirror

• Co-op

Funds

• MDF

Funds

• Rebates(partner or

customer

focused)

• SPIFs

THERE ARE FAR BETTER THINGS AHEAD

THAN ANY WE LEAVE BEHIND


Incentive Program Types

The Expanding Universe of IncentivesSiriusPerspective: As channel incentive programs evolve; the ideal mix of programs will

expand to include a blend of channel incentive program types.

Accrued

marketing funds*

earned through

revenue attainment

(percentage-based)

Co-op

Funds

Marketing

Development

Funds (MDF)

SPIFs

Sales

performance

incentive funds

earned by

reaching specific

sales goals

MDF

$

Points-

based

Rewards

123

Launch

Funds

Discretionary

funds* used to

seed new market

opportunities

Monetary

rebates earned

upon reaching

specific goals

or targets

Cumulative

rewards earned

through specific

behaviors or

activities

Discretionary

funds to launch

new partnerships,

drive awareness/

demand for new

offerings

Rebates

* Co-op funds are contractually accrual-based, while MDF funds can be discretionary or accrual-based (non-contractual).


Incentive Reward Goal Examples*

*Consider corporate strategic goals (e.g. emerging market strategy); focus on desired growth in partner capabilities or participation in channel programs (e.g. thought leadership, social

leadership, account-based marketing (ABM), digital transformation, partner-led marketing, involvement in pilot programs, channel ambassador programs, etc.)

The Expanding Universe of IncentivesSiriusPerspective: As channel incentive programs evolve; expand the universe of rewards

to align with corporate strategic and growth goals as well as channel-specific goals.

Revenue/

Performance

Achievement

Deal

Registration

Onboarding

Velocity

Lead

Reporting

Managed

Business

Objectives

Reward for partner on-

boarding within the

desired timeframe

R

MBO

Certification/

Specialization

Achievement

Reward for reaching

predefined revenue or

performance

objectives

Reward for registering

opportunities, deals,

sales-accepted leads

Reward for partners

reaching certification/

specialization goals

Reward for closed-

loop lead reporting,

adherence to SLAs

Reward for

achievement of

specific supplier-

defined objectives

Partner

Engagement

Cloud

Transformation

Reward for partner

engagement in supplier

programs

Customer

Success

Reward for partners

achieving customer

success goals

Reward for partners

transforming to cloud

business


Sirius Perspective: Establish a comprehensive incentive strategy incorporating leading

and lagging indicators of success, as well as clear goals aligned to “who” is being incented.

Channel Incentive Examples Partner Team/Group Individual

La

gg

ing

In

dic

ato

r

Inc

en

tive

s

• Co-op Funds*

• MDF Funds*

• Revenue Achievement

• Performance Rebates*

• Volume Rebates*

• SPIFs*

✔

✔

✔

✔

✔

✔ ✔

Le

ad

ing

In

dic

ato

r

Inc

en

tive

s

• Launch Funds or Business Development Funds* (discretionary)

• Deal Registration

• Onboarding Velocity

• Certification/Specialization Achievement

• Enablement/Engagement Incentives

• MBO/KPI Incentives (Persona-based: Sales, Mktg, Tech, Support, etc.)

• Points-based Rewards* or Gamification

✔

✔

✔ ✔

✔

✔

✔

✔

✔

✔

✔

Expand Incentives to Motivate Future Success

*Incentive/funding program types


Channel Incentives Strategy ConsiderationsSiriusPerspective: Essential for effective channel incentive programs is to start by clearly

defining the strategy by routes-to-market (partner types) and partner personas.

Partner Personas

Support Leader, Support Staff

Consulting or Services Leader, Staff

Engineering or Technical Leader, Staff

Owner, CEO, CFO or President

VP of Sales, Sales Management, Staff

Marketing Management, Staff

EXEC

TECH

SALES

PROF SVCS

MKTG

SUPPORT

Partner Type

Service Provider

Strategic Alliance

OEM

ISV

System Integrator

VAR/Solution Provider

DMR/Retailer

Distributor/Aggregator

Agent/Broker

Referral Partner


Service Provider

MSP

Alliance

OEM

ISV

System Integrator

VAR / Solution Provider

DMR / Retailer

Distributor / Aggregator

Referral Partner

SiriusPerspective: With each partner type, there are different sets of personas to consider

in managing the partner relationship; establish incentive strategy for key partner personas.

Channel Incentives Strategy Considerations

Exec Prof SvcsTech MktgSales Support

Exec Prof SvcsTech* MktgSales Support










SiriusDecisions Partner Journey Stages

Channel Incentives Strategy ConsiderationsSiriusPerspective: Essential for an effective channel incentive strategy is to consider

incentives aimed both at the progression and velocity within the partner journey stages.

OFFER QUALIFICATION COMMITMENTINVESTMENT &

ENABLEMENTPRODUCTIVITY

EXEC

TECH

SALES

PROFSVCS

MKTG

SUPPORT

PARTNER

Examples:

• Onboarding Velocity

• Certification/Specialization Achievement

• Partner Engagement/Participation in Programs

and Events

• Business Planning/QBRs

• Performance/Revenue Achievement

Evaluate what incentives can be established for the

partner as a business or for the key individual

personas within each stage to successfully progress

them to the next stage.


Channel Incentives Strategy ConsiderationsSiriusPerspective: Future incentive strategies structure aligned to partner’s pre-and post-

sales customer experiences; establish appropriate partner and persona incentives.

SiriusDecisions Buyer’s Journey SiriusDecisions Customer Lifecycle

Pre-Sales Efforts (Buyer’s Journey) Post-Sales Efforts (Customer Lifecycle)

Education Solution Selection Deliver Develop Retain Grow

Examples:

• Social Thought Leadership

• Supplier Demand Creation Programs

• Partner-led Lead Generation Campaigns

• Lead Development/Lead Maturation

• Deal Registration/Opportunity Management

• Revenue Generation

Examples:

• Customer Engagement

• Customer Marketing

• Customer Experience

• Customer Revenue (upsell/cross-sell/renewals)

• Customer Advocacy

• Customer Loyalty

EXEC

TECH

SALES

PROF SVCS

MKTG

SUPPORT

PARTNER


Strategy for Future Success: Key Takeaways

• Optimize MDF and co-op programs by leveraging best practices for

optimal program utilization, ROI and for the ideal partner experience

• Establish a comprehensive incentive strategy incorporating leading

and lagging indicators of success

• Lagging indicator incentives: Recognition for partner achievement/success

• Leading indicator incentives: Reward to motivate desired partner behavior

• Channel incentive programs should maintain an optimal mix of

incentive program types and incentive rewards aligned to corporate

and channel goals

• Essential for effective incentive programs includes defining the

strategy by partner type, partner persona, partner journey stage,

pre- and post-sales efforts


Q & A

Steven Kellam

@CCIChannels

www.linkedin.com/in/stkellam

Kathy Contreras

@KWContreras

www.linkedin.com/in/kathyf1

Thank You!