Every day, thousands of companies sell their products and services through channel partners such as franchisees, independent agents, and value-added resellers. Not only are indirect channel sales a significant part of the overall economy, many companies rely on them for more than half of their total revenues.
Channel vendors face the same marketing challenges that confront all types of business enterprises, but they also face challenges that companies with centralized marketing operations don't typically encounter. For many channel vendors, the single biggest marketing challenge is that many of their partners simply don't have the time, resources, or expertise to run effective marketing programs.
To address this challenge, channel vendors have implemented a variety of marketing enablement programs. There are three types of marketing enablement programs in use today - financial incentive programs, self-service partner portals, and managed marketing services.
These three types of programs are not mutually exclusive. In fact, they are complementary components of an effective marketing enablement system. As the following diagram illustrates, companies with the best-performing channel marketing operations combine all three types of programs to equip their channel partners with the tools and resources they need to run successful marketing programs.
Each type of marketing enablement program provides specific capabilities that are critical for successful channel partner marketing, but none of these programs alone provides everything that is required for a high-performing marketing enablement system.
Financial Incentive Programs
For decades, channel vendors have used financial incentive programs to boost the marketing efforts of their channel partners. These programs have historically taken one of two forms - market development funds programs and co-op marketing (advertising) funds programs.
MDF and co-op programs are an essential component of any high-performing marketing enablement system because many channel partners don't have the financial resources to market effectively. However, MDF and co-op programs are not usually sufficient to significantly boost the marketing efforts of channel partners. The primary problem is that MDF and co-op programs are missing what many channel partners need most - help with planning, designing, and executing effective marketing programs.
Self-Service Partner Portals
For the past several years, channel vendors have been implementing a relatively new genre of web-based marketing automation technologies to simplify and streamline some marketing activities for channel partners. In the marketplace, several terms are used to describe these technologies, including distributed marketing automation, local marketing automation, partner relationship management, and marketing asset management.
The primary attribute of these technologies is a secure online portal site that enables vendors to manage marketing content resources and allows channel partners to perform a variety of marketing activities. These technologies provide powerful capabilities, but it's now also clear that they are not a complete solution for channel vendors or their partners. In fact, research has shown that fewer than 25% of channel partners use the partner portals provided by their channel vendors.
The main cause of the under-utilization is lack of time and expertise. Most partner portals are self-service solutions. They make it easier for channel partners to obtain marketing materials and customize those materials, but partners must still have the time and expertise to effectively use the materials that are available through the portal.
Managed Marketing Services
To increase the frequency and boost the effectiveness of their partners' marketing activities, a growing number of channel vendors are now adding managed marketing services to their marketing enablement systems. Managed marketing services typically include pre-packaged marketing campaigns, as well as campaign execution services. With managed marketing services, channel vendors give their partners access to a "marketplace" of complete, ready-to-execute marketing programs.
Managed marketing services make it easy for channel partners to run marketing campaigns. When partners want to run a particular campaign, they simply "order" it via an intuitive interface that mimics the shopping experience provided by consumer websites like Amazon.com. Once ordered, the channel vendor (or the vendor's marketing enablement solution partner) executes the campaign, making it completely turnkey for the channel partner.
Effective marketing enablement is critical for driving increased revenues from indirect sales channels. Marketing enablement programs that combine financial incentives, web-based marketing technologies, and managed marketing services are the current state-of-the-art for improving the marketing efforts of sales channel partners.
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