"Auction or Prescriptive Funds" for Channel Marketing Programs
Every Channel Marketing Manager wants to be seen to be rewarding the channel for selling it's product but how do you make sure you get the best return from your funds. In almost every vendor the amount of funds available for Partner engagement and marketing activities is getting smaller and the need to get more demonstrable return from these funds is greater. So looking at your channel community how do you make sure you invest wisely?
Traditionally most vendors gave contractually agreed,(prescriptive) funds based on sales revenue. This is great for larger resellers selling lots of product but the rewards for smaller resellers often mean they don't have enough to carry out a meaningful activity and their funds tend to be the ones that always expire. More and more vendors are moving to holding an auction for some or all of their funds their funds. This means all of their reseller community can submit a plan and the vendor can then decide that only the best plans receive investment. This means even small resellers who have a good plan can get access to more funds than they normally would. This enables vendors to grow their future star resellers much quicker and engenders real partnerships.
However with prescriptive funds the vendor may have already seen a good return on their investment. So why change something that is working. Moving to 100% auctioning of funds may mean the vendor loses some resellers who sell their products but are not really interested in getting involved in a bidding process.
Using Pareto's 80/20 rule do you give all your funding to the 20% of partners who make up 80% of your revenue or do you speculate on some of the 80% of your resellers in order to accumulate potential faster growth. The other 80% of partners are your growth potential and if they had the same level of investment as the 20%, may give you even better returns. You can even minimise any risk in doing this by only backing solid plans which appear to have real merit.
Maybe the best option is to auction an increasing percentage of your funds to your future stars whilst still rewarding todays performers. Taking only a small percentage of fund from todays top performers and giving it to a smaller partner can make a huge difference and lead to really fast growth and secure long term partnerships.
How do you pass funds to your channel partners ?