By Jared Shusterman, CEO and Managing Partner, SproutLoud
In late April at the Channel Focus Conference in Phoenix, I was reminded of an article I wrote a year ago about inefficient channel marketing programs…at risk of sounding like a broken record, I have to talk about this again, and in more depth. It’s worth repeating because the forces that hinder partner marketing seem to continue unabated; specifically in the IT, Software, and Telecom spaces. Its a problem no one wants to talk about, but everyone understands very well – partner marketing is in fact broken.
Forget the age-old issues of partners not understanding how to advertise, not caring, or not having the time, know-how, etc. It turns out that the problems begin with the approach of the OEM / Brand, and it’s not for lack of investment.
To give you some context about the money being thrown at the problem, according to Borrell Associates and the Co-op Advertising Programs Sourcebook, some $22 billion to $50 billion is available each year in co-op ad dollars and most of that money flows through partner portals.
Borrell found that up to seven billion of that general sum goes unused, while 450 million of the 1.7 billion specifically earmarked for online advertising goes unused. A “lack of partner participation” is cited in the study as the reason for fund underutilization; partner ambivalence is evident by the numbers. The other story here that the numbers don’t tell is the loss in marketing efficiency from the channel — and how it’s hurting national efforts. So why is this happening?
The Disconnect Between Strategy and Tactics
Although I was new to the Channel Focus Conference, the problems I saw with partner portals remained the same. These programs have fallen into a peculiar trap — they focus on tactics rather than the broader strategy of how brands need their partners to go-to-market. Here’s an all too common scenario:
A national brand/OEM realizes they have to do something to support the marketing efforts of their partner community.
They turn to the companies organizing and tracking co-op dollars to give them a solution, or they internally piece-meal together various “point solution” providers to fulfill tactical needs.
In both cases, partners receive a “portal” or “marketplace” where they browse from pre-approved vendors (for tactics like direct mail, email marketing, deal registration or lead gen, paid search, etc.) through their partner marketing portal, and purchase vendor services while applying co-op funds.
The partner portal triggers an email to a vendor, or multiple vendors, and all follow-up separately to execute off-platform. In some cases, brands have instituted a “marketing automation system” to handle very specific pieces of the partners’ marketing, but still it ultimately remains disjointed.
In the above scenario, which seems to be de facto in this industry, marketing activities become fragmented and siloed – with one party losing sight of turn-key marketing plan management and execution on behalf of all partners. Partners become very tactic oriented, choosing from direct mail, event management, a lead gen software platform, or email marketing.
Even still, there seems to be reasonable alignment between the brand’s overall strategy and providing pre-approved vendors that partners can select to execute at the local level — perhaps deducted from a co-op platform in real-time. So what’s the problem?
You are running a marketplace, not a marketing plan: If brand strategy entails an overall plan, and of course it does, it’s hardly optimal for the individual tactics to be carried out by several different vendors that lack knowledge of each other’s efforts — no synergy there. Hundreds of partners utilizing dozens of vendors could be considered success, but who is identifying the best marketing practices of top-performing partners and diffusing their techniques to the rest of the network? If the only common denominator among pre-approved vendors responsible for execution is the way the channel management provider facilitates co-op or MDF payments to them, you are in trouble.
Reliance on self-service and lack of true automation: Partners that have to go through a “self-serve” experience, either by selecting things in a portal, or working with pre-approved vendors to make decisions to spend money on advertising today, which may yield results tomorrow, creates a big space for inaction. Since partners are entrenched in ongoing operations, getting them to login and plan marketing spend is tough. Even if pre-approved vendors offer automated solutions, the whole operation becomes less automated in selecting and responding to a fragmented web of vendors.
Too many tools and providers: Even if a brand can get partners to log into the portal in droves, partners are likely to make uninformed ad buying decisions or become overwhelmed by tools and vendor options they do not fully understand. The pressure of too many options and too little information or help causes partner paralysis.
Disjointed results picture: Since partners are working with several different vendors, they will receive results analytics from several different sources at different times. This may be okay for a corporate marketing team, but confusing for a local operator. If partners have trouble achieving a unified results picture, they won’t be able to continually invest in the most fruitful marketing.
The apathetic 80%: About 20% of a brand’s partners generate 80% of channel sales. The other 80% of partners are disengaged when compared to top performers. A “self-serve” partner portal will do little to activate apathetic partners.
I imagine you are starting to get my point; the pervasive flaws in marketing through the channel cannot be dismissed as minor inefficiencies, instead they are fundamental weaknesses that seriously constrain channel efforts. So how do you fix it?
One Platform, True Integration
Let’s sketch out how channel marketing should work:
True integration and automation: Best-in-class vendor capabilities should be incorporated into the core functionality of the integrated marketing software, meaning that if partners want direct mail and paid search for example, they just push a button to opt-into programs that begin running automatically.
Reporting for all component campaigns is unified and comes back to partners over the same platform, of course the brand receives aggregate reporting on campaigns and partner behavior. A unified provider holistically manages the partners efforts. Say “bye-bye” to silos!
Engagement: A robust network-wide engagement strategy, both in terms of communication and financial incentives, to steer partners (at a network level) to the desired assets and programs is key. Remember that engagement strategy actually has to be engaging! It takes a tone of solidarity with partners, reinforces their needs, and reassures partners that the brand is there with both the financial support and co-branded programs that position brand and partners for long-term success.
Coordination: At the individual partner level, dedicated service providers (DSPs) are on deck to answer all questions partners may have about deploying specific programs, fund application, and program results. DSPs know what works for top producing partners and why; they, along with the engagement strategy, are constantly working to breathe life into the 80% percent of lower performing partners. Best of all, they can provide the white-glove treatment to do it for the partners as required.
You have to lead partners to water, fill up the glass, and even tilt their collective head back if you want your brand fully represented at the local level. The next frontier of channel marketing will see brands moving away from marketing facilitation and more towards comprehensive, channel marketing automation.
Jared Shusterman is Managing Partner and CEO of SproutLoud, a software and services company focused on solving the complex challenges of distributed marketing organizations.