State of Co-Marketing

Unfortunately, it seems that a lot of creativity has disappeared from co-marketing programs over the past few years. Perhaps companies are reluctant to continue to invest in programs where the return on investment is difficult to measure during a tough economy. Whatever the reason, the lack of new collaborative ideas has caused two things:

1. Co-Marketing programs do not offer companies a competitive advantage. They are table stakes, but not game changers.
   
2. There is a great opportunity for a company to change the rules and reset the playing field.
   

The basic idea behind co-marketing is for the vendor and channel to jointly invest in programs that will create demand and increase sales for a particular solution. To accomplish this, vendors establish a funding mechanism, typically based on a percentage of revenue, that can be used by the channel partner to engage is demand generation programs. Since the vendor is funding the efforts, they typically reserve the right to approve or decline specific initiatives. Sometimes, there are pre-approved programs that can be used without pre-approval.

The Market Development Funds (MDF), as they are sometimes called, are managed and controlled by the vendor. With sometimes thousands of channel partners, the management of the funds can become quite complicated. As such, basic programs are typically developed and reused across multiple channels.

Typical co-marketing programs include (but are not limited to):

· Lead Generation (telemarketing or DMDR)
· Deal Registration
· Co-advertising
· Sales Training
· Collateral Development
· Customer Events (typically regional or local)
· Partner Events

It should be noted that, if executed effectively, there is nothing wrong with any of these activities. The main issue is that they do not provide any competitive differentiation for the vendor. It is reasonable to assume that your competition is engaged in the same activities with your channel partner.

The other consideration in regards to co-marketing is that they tend to be generic in their application. All partners, regardless of size, location, competency, relationship, loyalty, or purchase history, are granted access to the same types of programs at the same time. It would be inefficient to have a unique co-marketing program for each and every one of your channel partners. Or would it?

If you could improve your Return on Investment, provide higher quality leads, and engage customers with unique programs, it would be possible to rethink co-marketing programs. Not only can you provide a competitive advantage, but also create switching costs and loyalty from your channel partner(s).

Content Personalization

I just purchased a new computer and started the task of moving information from the old to the new. One of the last things to do was to move my iTunes library over to my new computer.

Sidebar: I was expecting this to be a somewhat torturous task, but I was pleasantly surprised with the simplicity.

As a loaded iTunes, I realized why I am such a fan. It is not that the library is actually pretty good, but rather the manner in which Apple treats me as an individual. The Genius application analyzes my purchase history and presents me with recommendations on songs and artists that I might not have previously discovered. I love it. Sometimes the application misses the mark (especially if my kids have been downloading Miley Cyrus or Demi Lovato), but in general the recommendations are pretty good. Yesterday, I purchased seven new songs.

The use of purchase data and applied analytics has built loyalty with me...their customer. Part of loyalty is because I really do like the service, but perhaps a bigger part is the switching costs they have built. No other service can offer the insight into my tastes and present appealing options than iTunes.

Why shouldn't we do the same with our channel partners and enable them to do it with their customers? We should.

Channel Connexions

Channel Connexions is an idea that I have been considering for quite some time. Having worked for companies that sell predominately through indirect channels, I have seen commonalities in effective channel management that truly span industry segments. Channel Connexions will be a blog that takes some of my thoughts on channel relationship management and builds a structure to enable companies to take advantage of some basic principles to improve not only the way in which we manage partner relationships, but also enable partners to be successful.

I have formed a consulting company to work with companies that want to build a best-in-class channel program based on these principles. Whether a small company just building their channel ecosystem, or a large, established corporation wanting to differentiate themselves within their partner community, the services that Channel Connexions offer will be of great benefit. In the near future I will launch a website to further elaborate on these services.

The blog will enable me to share some additional insights and hopefully engage a community in some dialog that will challenge the prevailing thoughts on effective channel management.

Connect the Dots

Going along with my thoughts about COI (Communities of Interest) is a good summary from Seth Godin.

http://sethgodin.typepad.com/seths_blog/2008/11/how-to-make-mon.html

It is always impressive to be able to say that "I have 'x' number of members in my community", but that is not really the goal. I like the idea of smaller communities with passionate people. For instance, saying that there are thousands of contributors to Wikipedia is not as impressive as saying that there are a few people passionate about a lot of small subjects on Wikipedia. Think about how small the actual Wikipedia communities are. Each subject has its own community of maybe 2 or 3 people (in some cases more), but they are knowledgeable and care about their subject.

The question is how can you get the right people, no matter how many, to actively participate in your community to build or fix or change something?

win-win-win-win

SaaS solutions are continuing to be more attractive as companies are faced with the challenge of continuing their operations with tightening budgets.

"Do more with less!"

Certain software solutions are critical to the ongoing management of the business, but can be cost prohibitive, especially in these tough times. This is even more the case with SMBs. SaaS solutions change the game, enabling businesses to deploy mission critical applications in a timely and cost effective manner. ERP and CRM solutions are great examples.

There is an inherent demand for these types of solutions, but a challenge for the SaaS vendors in building an effective channel to market. But with a focus on customer driven solutions, NetSuite is enabling the channel and providing them with the opportunity to build value-added integration and implementation services. NetSuite has partnered with HP to enable HPs channel partners to resell the NetSuite SaaS solution, creating a win-win-win-win scenario.

* NetSuite gains access to the vast HP reseller community
* HP drives demand for the NetSuite services, which enables HP to sell more servers into the data center
* VARs enhance their customer relationship by providing a cost effective solution specifically addressing an immediate need. They also are empowered to build new services around the SaaS solution.
* The customer can now implement a quality CRM solution at a lower cost and in a timely manner

A community of interest has been created. It will be interesting to see if NetSuite, HP, and their resellers engage their customers in a dialog to continue the innovation.

Do You Want Fries With That?

I used to be an advocate of developing a channel structure that created a kind of franchise feel. My reasoning was that if you were a partner of mine, I wanted the end user to have a certain expectation about you. My analogy was McDonald's. No matter where you go across the globe, you can be reasonably sure that the fries will taste the same at any McDonald's franchise. There is a certain level of comfort in knowing that I will get the same quality of product and be able to eat in a similar environment in virtually any McDonald's restaurant.

This level of standardization is no longer valid when what the customer wants is a solution to their specific issue or problem. A generic product (no matter how good) becomes average when you, as the vendor, try to push that product to all customers. This works great in a fast food franchise, but not when your customer challenges vary literally by customer. The McDonald's fries example is one of a vendor driven solution being pushed on the market.

Today, we can change the model. Using collaboration tools, we can leverage our channels market expertise and customer knowledge to develop individual solutions for each of our mutual customers. The channel can help us define the customer need. They can provide the implementation and integration services to match that need and we can offer the product or suite of products to the solution. The fries will not always tasted the same, but that is precisely the point. Customers do not want a generic solution that is "good enough". They want a great solution to their specific problem.

Instead of bundling a bunch of generic widgets together and calling it Solution A, it is better to let the customer define the problem and work backwards from there. The benefit is that you will be offering more value and can price at a premium, the channel will be able to develop advanced services to drive their business and the customer problem is resolved.

The Election

There are a lot of great things that happened with the presidential election yesterday, regardless of your political views. One of the great things that I am going to miss was being able to witness the "power of the story" in the campaigns. It was fascinating for me as a marketer to watch all of the candidates, from local and national campaigns, try to frame their stories. Obviously, some were more successful than others. What it came down to was "connections". The candidate that "connected" to their constituency won. Those that couldn't find the connection...lost.

Connections are about relationships and the successful campaigns build relationships through emotional connections with their audience. These didn't happen overnight, but rather through a sustained and deliberate process of storytelling. Many candidates who couldn't find the story to make the connections and build relationships were scrambling in the final weeks of the election cycle to find the right story. Too late. It takes time, perseverance, and authenticity to connect your story with your audience.

Think about your candidate(s) of choice, whether they were successful yesterday or not, and look at their story. Was it SIMPLE, COMPELLING, and RELEVANT? Most important, however, is "was it AUTHENTIC"? Maybe it is too soon to tell, but if their story lacks authenticity it will eventually fail to maintain the connections and relationships.

As a marketer, your job is very similar to that of a political campaign. you need to make connections and build relationships with your customers. You do this through the art of storytelling. Just like with successful political campaigns, your product/service/company story needs to be simple, compelling, relevant and authentic.