Think that everything sold on the Internet is direct to you from the manufacturer? Think again. Over 60% of everything sold is sourced through a distributor, channel partner, reseller or dealer. Those in the supply chain are vulnerable to disintermediation, which would sever the tie of the middleman. But that isn't a viable solution for many manufacturers and providers of services. Wholesalers and Value Added Resellers are still essential in our economy. How they communicate and market is a sensitive issue to brand managers.

Over $10 Billion is spent annually on Channel MDF (Market Development Funds) and Co-op (Cooperative Marketing Funds). Yet brand managers and those above them on the org chart have a difficult time identifying the ROI on these outlays. As channel marketing executives allocate funds (like accrual-based, discretionary or proposal-centric), resellers, distributors and other channel intermediaries are able to run promotional programs on behalf of the brand.

KL&P works with both the "mother-ship" and the downstream distribution channel to help fix broken programs and create new, streamlined MDF/Co-op initiatives. There are five characteristics that will dramatically improve the attractiveness and ROI of your MDF / Co-op program for your channel. These five characteristics make your program and your brand more attractive to your partners, while allowing you to carefully measure and report on the success and ROI of your MDF / Co-op investments.

  1. Partner Profitability Modelling: The best place to start is to help get your partners to understand how they can make more money with their brand. If they can see a clear path to profitability by investing in your brand they'll give you more time, more staff, and more of their own money to help grow their business.
  2. Partner Marketing Investment and Impact Forecasting Modelling: Once partners understand their path to profitability in step one, they will look to figure out what the impact of incremental investments in dollars, staff, and time will yield in return. Providing partners with the ability to model marketing expenses will give them much more confidence in investing in your business.
  3. Forecasted Direct and Derived MDF / Co-op Impact by Partner: An ROI forecast for the vendor is a natural byproduct of steps one and two. This serves the vendor and partner, and provides the return forecast that each need to confidently invest.
  4. Forecasted Direct and Derived MDF / Co-op Impact Across all Partners: These same partner-level forecasts can be consolidated in partner network forecasts for monitoring overall program performance reporting.
  5. Ongoing Performance-to-Plan Measurement and Reporting: Bi-directional integration with CRM systems (e.g., Salesforce.com) gives vendors and partners the ability to instantly monitor their performance-to-plan, as well as measure marketing's contribution to revenue.

The best way to architect your MDF program for growth is to provide your partners with tools to model their profitability and investments. These tools promote confidence in your brand. By giving partners the ability to model their profits and marketing ROI, the vendor also gets insight into their return on investment.

KL&P Marketing is a great partner to help get your Channel MDF and Co-op programs spinning gold.

CO-OP MARKETING'S COMMON PITFALLS

When low affiliate adoption plagues your co-op program, KL&P can help analyze the core factors, whether they reside in your product or service offerings, or in an overwhelming system of reimbursements. ROI needs to be trackable, program administration must be streamlined. But the biggest issue is that your resellers and distributors aren’t marketers. We can help them with proven strategies.

 

Contact us to learn more
(800) 359-7995