Recently I had several conversations with B2B manufacturers running MDF and Coop programmes for their channel partners about the return on investment of these marketing budgets. These programmes are almost mandatory for each manufacturer to have but at the same time these programmes are often a topic of complaints as well.
Many marketeers however still do not know the ROI of their MDF or Coop investment in the channel. Manufacturers say they do not have sufficient information to calculate the ROI and channel partners seem to be afraid that the ROI has an impact on the actual payment of the activity.
Aren’t we all (manufacturers and channel partners) investing in campaigns and activities to be successful and to repeat this success? But maybe the key word here is “success”. If success is not defined at the start of an activity you will not know if the investment makes sense and you will most likely not be able to measure it either.
I’m interested in your feedback on how to improve insight in the ROI of channel marketing funds. What do manufacturers and channel partners need to do different/better?
Measuring and monitoring your ROI is complex enough as it is for one company’s marketing campaigns and it gets even more tangled up if there are vendors and channel partners involved together.
If companies want to pursue only short-term goals, it simplifies the problem of ROI measurement by corelating sales increase or the number of leads generated within a certain period to the marketing activity. But it increases the probability of drawing incorrect conclusions. So if one wants to get a more in-depth analysis, they should definitely conduct a survey on their buyers or leads within that period to get a better overview on activity’s success.
However, I would also not exclude the impact of marketing on raising company/brand awareness and image which can lead to tangible results long after marketing activity has ended. This is even harder to measure and connecting it to actual sales can take years.
In my opinion vendors can benefit by creating a long-term strategy for their channel sales. They should define specific market groups they want to target and clear goals which need to be achieved. Accordingly, they should support with MDF funds those channel partners who have best coverage on that market segments or best mkt suggestions how to address it. Channel partners should be motivated to regularly submit ROI reports on their campaigns. Since there is a delay in campaign results, they can be penalized by budget reduction in future periods if they fail to provide ROI reports.
To sum up, I believe it is definitely crucial for vendors and channel partners to be aligned in terms of goals they wish to achieve with each co-marketing campaign. On top of that, they should jointly define standard Return On Investment measurement system for each campaign they do together. They should have a consensus on what they want to measure and how. This would provide meaningful data to both partners and, once it is correctly setup, it can just be copy-pasted to all future campaigns having the same goals. Anyway, this is how I think, things SHOULD work, but in real life…many obstacles tend to arise.
Thanks for your comment Boris, great contribution! I agree with your summary. When channel partners and manufacturers are agreeing goals and define how to measure ROI then they are thinking about running a campaign or activity to generate revenue (direct or indirect). Only too often it seems like campaigns or activities are planned to spend a budget…
Hi Bart,
I have had many, many conversations with manufacturers about measuring ROI and agree with the points raised. I recently posted a blog on the 3 operational ways to measure MDF ROI.
http://vaughnaust.blogspot.com/
We published a white paper on best practices to increase uptake in MDF programs (basically what manufacturers can do better).
http://www.hawkeyechannel.com
Best regards,
Vaughn Aust