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The truth about channel marketing: everything you have been told is wrong
There is no more powerful concept in go-to-market strategy than the channel. The idea of hundreds or thousands of independent partners passionately selling your products is a wildly attractive concept. But longstanding challenges with messaging, funds utilization and performance management have complicated this lucrative way to get your products in the hands of potential […]
There is no more powerful concept in go-to-market strategy than the channel.
The idea of hundreds or thousands of independent partners passionately selling your products is a wildly attractive concept. But longstanding challenges with messaging, funds utilization and performance management have complicated this lucrative way to get your products in the hands of potential customers:
- It takes a lot of time and money to execute channel marketing programs.
- About 50 percent of the money brands give to partners for marketing will go unused.
- Partners don’t know how to execute high-ROI digital campaigns.
But these are all challenges based on a 20th-century view of technology. The cloud, dynamic ad templates, intelligent funds management and centralized analytics are literally hacking the channel marketing model and making it better: more affordable, more efficient, more transparent and more effective.
In this article, we explore the common misconceptions many brand marketers have about getting their message into market through the channel.
MISCONCEPTION No. 1:
Channel marketing is an OpEx (operating expense) nightmare
Almost every brand uses indirect distribution in some way. Done right, a strong channel program can deliver more products into the hands of potential customers than any direct sales force. But the bigger challenge has always been how to get partners to effectively promote your products. Getting your marketing programs in the hands of thousands of independent partners creates a lot of challenges that drive up OpEx.
Localization: Partners need to add their logo, contact information, and even pictures to marketing assets in order to drive traffic and leads to their businesses. Paying agencies to build templates, managing the approval process and paying a local vendor to add the partner’s artwork all drive up costs for every campaign.
Vendor sprawl: Digital advertising is crucial to success in today’s oversaturated marketing atmosphere. But highly targeted digital tactics must be used in conjunction with tried-and-true traditional media. This is causing brands to contract more and more marketing vendors to provide multi-tactic choices to their partners. More vendors means more legal fees, more invoicing, more manual work preparing assets for all those vendors and more personnel to manage them.
Wasted funding: Your partners are great at selling, but they may not be great at marketing. Selecting the right type of campaigns, finding a reputable local vendor and spending brand co-op or MDF (market development funds) wisely are all challenges for local business owners. So after all the OpEx you have spent creating and distributing campaigns, the additional budget you commit to cooperatively fund partner campaigns may be going to waste.
You can expand your reach while lowering your OpEx
Through-channel marketing automation (TCMA) is an exciting new technology that is helping brands improve the performance of their channel marketing programs while reducing the cost of managing them.
Dynamic templates: Using TCMA, a brand can load all campaign assets as dynamic templates into a cloud-based portal. This allows partners to localize marketing assets according to brand-developed guidelines. This means no agencies, no approvals and no rogue advertising. Brands can reallocate the personnel dedicated to administrative work to creating more messaging and more campaigns.
Integrated vendors: With the right TCMA platform, brands can leverage an integrated ecosystem of marketing service providers that are best in their field at everything from PPC (pay-per-click) to direct mail. Using these integrated vendors takes the weight of vendor management off the brand and eliminates the contracting, invoicing and day-to-day management work that drags down so many brand marketing departments.
Point-and-click local execution: Vendor integration means partners no longer have to search for vendors and deal with all the delays, deceptions and disappointments that come with trying to manage marketing themselves. Using a TCMA platform allows partners to select, subscribe and execute almost any type of campaign. This gets them out of the back office and onto the sales floor.
MISCONCEPTION No. 2:
The necessary evil of co-op and MDF
In 2015, Gleanster Research estimated that only about 52 percent of the $70 billion annually earmarked for co-op and MDF programs actually gets used by partners. That means partners are leaving $33 billion of unused funds on the table each year. This is caused by the crushingly slow claims and reimbursement process associated with co-op advertising.
Guidelines and approvals: First, the ad must be pre-approved by the brand marketing team. This means the partner has to spend time and money downloading the ad from a digital asset management site, then follow brand guidelines on how to customize it with their location and contact info. Then, they submit the customized ad to the brand for approval. The brand reviews. Guidelines are often overlooked or misunderstood.
The waiting game: From the time the partner decided to take the brand’s co-op offer for a newspaper ad, eight to 10 weeks could pass before they actually see the money. No wonder only half of these co-op offers ever see the light of day. Meanwhile, the brand has dedicated personnel focused on providing administrative approvals and paying third-party claims processors — between $8 and $20 for every claim. And the funds to cover all this come directly from one place: campaign budgets.
Amplify the power of your marketing spend
Listen, co-op advertising is irrevocably broken, and it needs to be replaced. Through-channel marketing is doing just that. Next-gen brands are using technology to fund campaigns instantly while still eliminating the possibility of fraud.
With a TCMA platform, brands can intelligently attach funds directly to a campaign asset and let partners have that money immediately — as soon as they launch the campaign. No matter what the offer or tactic, the brand’s funds can only be spent on the inventory of tactics in the platform. These tactics are integrated with approved marketing service providers, which means no fraud and no subpar execution.
Using this model, brands have the compliance and control they want, so they often opt to bypass the old approval process altogether. Partners select the tactics they want to run — anything from direct mail to dynamic local display ads — and they can immediately contribute their partner portion of the cost with just one click. The order is fast-tracked to the integrated marketing service provider for execution. This entire process takes minutes instead of weeks.
MISCONCEPTION No. 3:
The digital fear factor
Put yourself in a local business owner’s shoes while she’s managing the store, the employees, the customers and less-than-stellar sales figures. And at the same time, she’s got to quickly decide whether to invest in pay-per-click, search, dynamic local display, data-triggered marketing programs, reputation management, directory listings — OK, you get it: there are too many choices.
Lack of expertise: Seasoned marketing professionals take years to acquire the expertise to develop and deploy the right digital marketing strategy at the right time. The truth is, your local partners are entrepreneurs and experts at what they do best: running their businesses and selling your products. That doesn’t always mean they’re experts at marketing. So finding the time to identify which tactics to use takes time that they just don’t have.
Troublesome vendors: At one time or another, every one of your partners has invested funds with at least one fast-talking “digital expert,” only to find out that it was a waste of money. Understandably, your partners are wary of disreputable vendors. So they tend to hold back.
Digital is possible at the local level if you make it easy
Brands know that targeting the right message to the right customer makes a difference. Digital marketing done well does just that, and it can have a significant impact on driving traffic, leads and sales. Today, innovations in through-channel marketing automation are making it easier than ever for brands to lead the way and set their channel partners up for digital success.
The first step is to implement a funding strategy that allows brands to incentivize digital tactics. Offering co-op and MDF funds has been the typical option for brands who want to influence their partners’ marketing choices. More tech-savvy brands are using through-channel marketing automation to instantly fund digital advertising as soon as the partner launches the campaign. With instant funding, partners are more likely to adopt digital campaigns.
Partners also lack visibility into the impact — or lack thereof — digital has on the success of their business. TCMA platforms give partners the ability to analyze how their current digital strategy compares with their competitors in a local market. This insight will show partners why digital is a must-have and encourage them to adopt and execute digital campaigns.
It is time to evolve your channel strategy
Technology is making everything better. Smartphones make us all smarter. Fitbits are making us fitter. But if your channel strategy is still using technology from the 1990s, you probably are going to see less-than-stellar results. Some say through-channel marketing automation is the future, but trust me, the future is now. With the ability to use your extended partner network to get brand-compliant, highly evolved digital campaigns into market, you can now rethink your entire go-to-market strategy.