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Build a Better Channel Marketing Program

SilverGrass Marketing

1144 W. Newport

Chicago, IL 60657

T 773-270-3485

MCollins@SilverGrassOnline.com

www.SilverGrassOnline.com

Steps Toward Better Channel Marketing


The Channel Marketing Opportunity

About $40 billion is spent in the US each year on Trade Fund and Co-Op Advertising in support of Channel Marketing Efforts. Large amounts of that money go unspent, either because OEMs intended those funds to roll off or, in many cases, because the trade channel programs are too cumbersome, confusing, or ineffective for channel partners to use. But that money, when put toward programs with quantiable goals, exibility for continued improvement toward those goals, and ease of use by channel partners, can be a true business driver not just for the channel, but for the OEM bottom line as well. In addition, steps can and should be taken to clear up a glaring inconsistency in the way many OEMs authorize their advertising spending as a whole. Typically, an corporate ad with a large budget will have to go through many levels of review, authorization, and possible even focus group testing before the buy is made. If this is the proper way to handle $500K or $1M in advertising spending, why isnt the same accountability expected of the millions or tens of millions of dollars that same OEM is spending on Channel Advertising? In this white paper, Building a Better Channel Marketing Program, well discuss developing quantiable program goals, developing program outlines to reach those goals, and how to go about nding the right vendors or partners to help you reach those goals.

Develop Program Goals

A fundamental challenge in developing program goals, at least for the rst year or two of your new goalsoriented program, is going to be the fear that you dont have enough quantiable data to be able to develop goals that you can actually meet and potentially exceed come years end. Specic goals mean specic accountability, and if the program historically hasnt been run that way, there could be a perceived risk. But you can make sure the risk isnt greater than the reward by developing graduated goals and key performance indicators that can be measured more often and have built-in exibility, at least at the outset.

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Build A Better Channel Marketing Program

Initial Program Goals


What? Increase channel partner participation by x% How? Make program rules easier to understand Make reimbursement ling simpler Educate eld staff on how to encourage participation Provide easy-to-use tools for marketing and claims ling Publicize your program better to your channel partners Create initial benchmark measurement by surveying channel partners before program changes Include questions in that survey about how to make the program better Solicit ideas from potential vendors in the RFI stage of sourcing Why? Unless youre an OEM who counts on some of your allocated funds rolling off each year to balance your budget, increasing the amount of this money spent can improve your relationship with your channel partners and increase the pass through marketing they do for you. Ideally, this will help drive sales. In nearly all cases, channel partners have options as to which OEM they choose to provide the product(s) in a specic category. If your competitors are offering better programs, you take the chance of losing customers and exposure. Procurement is always going to be a valuable part of the process when building a program and determining how to administer it. Additionally, money saved on program inefciencies can be reallocated to other areas that will actually help develop programs to make them more successful for your and your channel partners bottom lines. Get rid of the bloat from legacy contracts. Each quarter or year, or each department or product line, may have specic goals that are difcult to meet by just relying on national advertising efforts or key-account-only activity. Small program differentiations can make a big difference in shifting behaviors toward or away from key areas.

Increase channel partner program satisfaction by x%

Increase processing efciencies by x% Create initial benchmark by determining the amount of time / cost it takes, on average, to process program claims. Identify areas within that process that could be improved. Allow online claim submission? Set up automatic deductions within the online Marketing Resource Management tool? Find a vendor with more transparent pricing? Your program specic goals For example: Increase Product A marketing by x% Increase Product B adoption by channel partners by y% Move z% of funds out of Media 1 and into Media 2 All of these types of goals are possible if you build your program and its rules around them. Reimbursement percentages can be increased or fund allocations can be earmarked for only certain activities. Your program rules can be built to shape channel partner activities.

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Build A Better Channel Marketing Program

Subsequent Program Goals


Once the program begins and youve gotten not only your benchmark numbers, but a sense, too, of how program changes can affect channel behavior, you can begin identifying new, more specic goals, and modifying or creating programs to meet those. Some examples:
What? Increase channel sales of Product K by x% How? Conduct A / B testing on program modications to determine which of those legitimately move the sales meter for a given product Implement those rules throughout the program Why? Each company has goals so product forecasts can be met. Once youve gotten through the initial stage of goals identication and measurement, youll be able to better set specic goals and know how to achieve them. A one-size-ts-all approach to marketing may work well at the national level, where brand identication is most important. But at the retail level, each channel partners needs may differ, and each customers lifecycle is likely to be different. Communicating to customers where they are and how they prefer is the key to higher ROI from your marketing.

Move x% of marketing to measurable, Provide tools that make these 1-to-1 1-to-1 customer marketing methods among the easiest marketing to accomplish Adjust program rules to offer more support for these methods vs others Provide campaign-by-campaign ROI data so channel partners can see the success of these campaigns Provide response-tracking types of programs like microsites, direct mail (pURLs), email campaigns, and other trackable formats Gather sales data from x% of the channel for marketing ROI and response analysis Offer program or nancial incentives for channel partners who provide this data. Offer to provide some direct marketing programs, for example, at no additional cost. Be explicit about what you will or will not do with this data. Be willing to have a third party involved. Retailers will always be wary of providing customer data to corporate for fear that corporate will just go directly to the customer.

Develop specic marketing and advertising recommendations to each channel partner based on program analysis and business intelligence

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Sales data is the holy grail in being able to determining the ROI of any giving direct marketing communication, and larger sets of that data across a large swath of your channel partner base can also provide strong insights into how well mass media advertising efforts are working, as well. This is a key component to getting better performance out of the channel marketing funds youre already providing. It may seem utopian, but with the right data and tools in place, you can programmatically make recommendations to your channel partners about marketing and advertising that will work well for them. Always keep in mind, they didnt start their business to become marketing experts. But YOU can provide that expertise to them.

Build out your online tool offerings to pull in the sales data, ROI analysis, and customer touch-point maps to provide specic marketing and advertising recommendations for channel partners. Continue to assess and reassess this data, improving algorithms and, ultimately, performance

Build A Better Channel Marketing Program

Develop Program Outlines


Once youve developed your initial goals (and likely have an idea of what your subsequent goals will be), you can begin to outline how you expect to go about achieving those. For each of the goals we listed in the previous section, we also listed a How component. In the rst draft of your outline, youll want to list your goals and then some of the How tactics you think you could employ to get there. Its at this part of the process we actually recommend doing some initial vendor fact nding to help you develop the rest of your outline (which will ultimately be used to form your program and be the base of your RFP). A reality in the Channel Marketing Services world is that OEMs will often send out the same or a similar RFP each time procurement requires them to update their contracts. Each vendor will roll out a modied version of their previous proposal with some changes here and there that do their best to answer the specic questions youve asked.

But doing that sets you (and them) up for failure, and youre missing out on this as an opportunity to nd the best vendors and to use some of that vendor experience to help you better develop the goals of your program. So your next step is a Request for Information, or an RFI. Youll ask for basic information about the vendors so you can qualify them as someone with which you could do business. But at this point, we recommend sending out your high-level goals list and asking your vendors for specic ideas on how they would achieve these goals and / or what theyve done with other customers to achieve similar goals.

Cast a wide net for this RFI, and really use the information provided to assess which vendors are just running processing programs as a commodity / without a lot of strategic thought, and which of them are truly solving problems for their clients. If any of the ideas they provided werent on your outline for ways to accomplish your goals, add them into that outline now. At this point, you should have a smaller list of vendors for the Proposal stage, and you should have a strong, relatively detailed outline of the components you want to institute in your new program to fully meet your goals.

Finding the Right Partners

It can be tough to move on from vendor or partner relationships you may have had for a long time. Youve gotten to know people on your team, and theres a comfort level with the processes in place. But your company, your program, and your channel partners really do deserve a goals-oriented program that takes advantage of current best practices and online tools to provide the support they need. That doesnt mean youll be saying goodbye to your current vendor, necessarily. But it will likely mean that your program will be undergoing some changes, regardless of who is handling it. And how do you know who will handle it? Thats where the Request for Proposal (RFP) comes in.

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Build A Better Channel Marketing Program

At this point, youve already asked your prospective vendors to provide basic information about themselves in the RFI. Youve also asked them for their ideas in reaching their goals and their experiences with other clients in doing that. Do yourself, your selection committee, and your prospective vendors a favor, and dont repeat those in the RFP. Instead, you want the RFP to be the opportunity for potential partners to specifically address the needs youve assessed in your detailed outline. You want them to provide you a solid sense not just that they can do what youre asking, but just how their process / system / tools do that. Too often, theres a deep chasm between we can do that and we can do that in the way that you envisioned doing that, and now is the time to determine that. Be upfront about asking where any additional costs for customization may lie. Weve seen OEMs get burned because vendors provide a bargain basement price for monthly service fees, only for them to be completely blindsided by the add-on costs that will triple or quadruple the cost of the entire engagement. If you notice that pricing between vendors is extremely varied, this could be a reason why. As the adage goes, if it seems too good to be true, it probably is. And nally, when youre going through the in-person or live demos and stand-ups of potential vendors, be sure to nd out who will be involved in supporting the program. Too often, companies will send in a polished salesperson who will promised the world, but that person is nowhere to be found during implementation time. Now in the process is when to begin expecting accountability. If a potential vendor cant provide that now, they certainly wont be able to provide it just because youve signed a contract with them.

How Can SilverGrass Marketing Help?

We at SilverGrass have more than a decade of experience working with OEMs and their retailers to develop effective and measurable channel marketing strategies. We can help with any stage of this process, whether its a brief examination of your current program and suggestions for its improvement, or if its providing help step-bystep through the entire process to build the channel marketing program you and your channel partners deserve. Our consultants have worked with global companies, Fortune 100 and 500 companies. We have experience in automotive, petroleum, home improvement / hardware, apparel, food / dining, luxury goods, pharmaceuticals, nancial services, insurance, and more. SilverGrass has relationships with a variety of vendors in the channel marketing space and works with our customers to develop their program goals and nd the right vendor partner(s) to fulll them. We consider ourselves vendor agnostic, vowing to choose the best vendor(s) our clients needs. We also offer program performance analysis, retailer marketing analytics, and ongoing program strategy. Before you re-send last years RFP, or spend another day frustrated at your channel marketing programs lack of ROI, drop us a line and let us know how we can help you lay the framework for a program that truly delivers channel marketing results. Michelle Collins Jay Clark Principal, Co-Owner Principal, Co-Owner MCollins@SilverGrassOnline.com 773-270-3485 JClark@SilverGrassOnline.com 708-370-1149

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Build A Better Channel Marketing Program