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Partner marketing? It’s time to talk about cash

Partner marketing? It’s time to talk about cash

 

We all know cash is king. It’s business school 101. But the phrase carries more weight than usual, as companies of all shapes and sizes consider how they will see through the COVID-19 crisis.

We all know cash is king. It’s business school 101. But the phrase carries more weight than usual, as companies of all shapes and sizes consider how they will see through the COVID-19 crisis.

For channel partners, the pandemic has thrown into sharp relief some fundamental issues with the way vendor compensation programs traditionally work. Indeed, many leading vendors have recognized the scale of the challenge and implemented special measures to help their channel partners weather the storm. It’s vital for partner marketing activities to continue to feed the sales pipeline.

Dell was one of the first off the blocks in providing support, announcing a wide-ranging ‘Partner Relief Package’ back in April. One key element of this was a one-time cash payment of up to 50 percent of current Platinum and Titanium partners’ Market Development Fund (MDF) balances for use towards future marketing activities. On approval, partners received immediate payment up front – boosting cash-flow, providing flexibility, and offering some degree of certainty.

Similarly, Microsoft launched a package of measures to support partners, including more investment in digital demand generation content. We looked at this in detail in a recent post "Partner marketing: lessons from Microsoft's partnering model for post Covid-19".

However, as welcome as such initiatives are, they represent a one-off shot in the arm for struggling channel partners. The long-term challenges of vendor compensation do not go away. 

The MDF claim-to-payment cycle can take months, and often involves complex, time-consuming form filling and submissions processes – still highly manual in nature. Is it any wonder that large proportions of MDF allocations – up to $25 billion – were being left on the table by channel partners, even before the pandemic hit?

The decades-old compensation processes for through-channel partner marketing have been ripe for change for some time. As one leading channel publication put it, “On occasions, antiquated vendor practices render the [compensation] process pointless, while on the flip side, partners remain hindered by a lack of resource and expertise.” The short-term challenges of doing business during a pandemic have simply generated strong tailwinds for disruption that was already desperately needed.

How can vendors address this challenge effectively, not just during the current uncertain business environment, but also as we emerge from the pandemic and return to something like business as usual?

At bChannels, we have been applying our minds to this challenge for a while now. We are already working with a number of leading vendors to implement more streamlined, channel-friendly ways of running through-channel partner marketing programs. We’ve developed a new model – Digital Partners – that takes the friction, effort and delay out of the partner management and compensation process.

Find out more by downloading our new eBook, "Through-Channel Marketing: how to maximize performance in an uncertain world", or contact us

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