Hitting the bullseye with co-marketing

Co-marketing campaigns have long been a staple ingredient in channel relationships, to varying degrees of success. But with businesses as vastly different as IT and marketing what makes for the best recipe for success, asks Gareth Kershaw

It is fair to say that marketing and the channel have never been the most comfortable of bedfellows. In fact, as partnerships go, it is one that should probably be filed under the heading ‘difficult, but necessary’ alongside the likes of Tony Blair and Gordon Brown.

The reasons are manifold, of course. Resellers tend to have limited marketing time, budget and resources; there are major cultural and logistical issues to consider; and perhaps most pertinently of all, most VARs are in business for their technological expertise, not their marketing skills.

Either way, this much is clear: vendor and distributor co-marketing and market development funding (MDF) programmes have become increasingly familiar features of the channel landscape.

Tony Bailey, UK and Ireland channel leader at Nortel, said that while joint marketing activity with distributors and resellers is essential in helping to drive market demand and awareness, there are currently two major challenges.

“First, multiple activities from multiple VARs may not all combine into an overall integrated marketing message,” he said. “Second, different types of VARs require different things. In particular, smaller resellers don’t have dedicated marketing staff to use the funds effectively.

“In 2007, Nortel will place a lot more focus on marketing directly to the end-user and providing supporting marketing funding to our partners to align to overall market campaigns. This will help drive opportunities and leads from the end-user market towards our partners, as well as more market awareness of the Nortel brand. This pooling of resources, I believe, will have more of an impact on the market and drive more opportunity for both Nortel and our partners.”

So how can resellers make sure their MDF ends up performing to a suitable and beneficial level?

They must first educate themselves in marketing and to do so it is vital that they understand exactly what it is they are committing to and why, according to Des Lekerman, managing director of systems integrator Eurodata Systems.

“Organisations with little or no marketing budget can really use co-funding to extend their reach,” he said. “It can be very effective in maximising budget and building positive brand awareness too, and leveraging against a larger brand is always a great tactic. However, to make sure you don’t do more damage than good, you need to make sure you think through all the implications before you begin.”

Fiona Shepherd, managing partner at specialist full-service technology marketing firm April Six, agreed with Lekerman and urged resellers to weigh up their options carefully before making any kind of formal commitment.

“The reseller has to think about what their end game is,” she said. “Why are they considering committing to a particular programme or campaign? On the face of it, that might sound like an easy question to answer – to sell more products and services with the ultimate aim of increasing revenues and profits. But it’s amazing how many businesses ignore these vital considerations.”

Mike Bernard, SME and channels marketing manager at IBM, said: “The campaigns that work best for resellers are still mainly telemarketing, followed up with small-scale events for a very targeted client audience. It is important that the target segment must feel they can justify their time.

“There are no real changes in the type of campaigns, but one visible change is improved segmentation and the delivery of a very specific message to a much smaller target audience.”

Bailey said that Nortel is working hard to bring the marketing communities within distribution, resellers and Nortel together. On 6 December, the vendor is holding a marketing forum to share its plans for 2007 with its partners to gain feedback and comment on how it can most effectively succeed.

“This type of forum is part of an ongoing process of continuous monitoring and improvement, which is the only way to ensure that what we offer remains in step with what our partners need,” Bailey said.

Resellers should strive to forge direct, demonstrable links between their marketing spend and their revenues, Shepherd said. And their vendors ought to help them.

Vendors meanwhile, must also take the time to understand what exactly it is the reseller needs, not only to turn a contact into a lead, but to then turn that lead into a sale.

Bernard said that IBM is seeing a more structured approach to planning from vendors, a framework which reflects company capabilities with less point-product emphasis.

“More parties are involved because of the increased focus on solutions versus promoting product messages and offerings,” he said.

Shepherd said: “It is pointless marketing for marketing’s sake. The marketing materials and the co-marketing programme are not a fait accompli. MDF should provide tangible financial reward for the reseller; it should literally ‘buy’ the business some revenues. As such it should be viewed by both parties as a chance to shift the reseller up a gear or two from a box-based to a solutions-based offering.”

Kenneth Klapproth, director of marketing at network management software provider Entuity, said that like any marketing activity, co-marketing strategies between vendors, distributors and resellers must be part art and part science, and that it is important to get the balance right.

“Online and electronic media technologies have increased the ‘science’ portion of the equation,” Klapproth said. “So implementing electronic campaigns is easier than ever, and can give nearly immediate feedback on the success of the message or the appropriateness of the target market. More importantly, electronic campaigns can be quickly refined to improve results. Adwords can be polished, offer copy tuned, and new audiences reached with just a few mouse clicks.”

However, perhaps because of this, there can be a temptation to undervalue the creative side of the campaign, when it is just as important as it has ever been. Overall though, Klapproth believes that the co-marketing ‘art’ still lies in balancing message, investment and equity.

Equally, point and piecemeal materials deployed in isolation are not nearly as effective as properly conceived, developed and executed integrated campaigns, argued Shepherd. The killer ingredient is integration.

“It’s easy to think purely in terms of individual campaign elements such as direct mail and HTML emails,” she said. “But there is, or there ought to be, a great deal more to it than that. It’s all about having a range of activities and complementary materials with a common thread that draw together to create a tightly-integrated campaign.

“It’s no good simply throwing a piece of direct marketing [DM] at a VAR, sticking their logo on it and hoping for the best. You need cheat sheets, case studies, pre-sales and qualification tools.”

Bailey said that Nortel discovered through consultations with its partners the degree of difference between the different types of reseller.

“For example, many of our customers in the SME market are being served by resellers that are themselves SMEs,” he said. “These small resellers do not always have the resource to use marketing funds, so we have had to develop simpler tools and improve access to these.

“For all sizes of reseller, time to market is a burning issue. Over-engineering the process will mean that marketing can’t keep up with the sales effort to get products to customers.”

Marketing is not just quantity and depth; it is quality too. This is often where the reseller’s limited marketing time and resources can begin to show and, therefore, where they should be leaning even more especially on their alliances for support.

However, according to Klapproth, while resellers seldom have dedicated marketing departments, they do have something of a secret weapon – familiarity. Because they already own or part-own the relationship with the customer and, to a certain degree, the prospects, the reseller is in a strong position to market to them. And this is where co-marketing can come into its own.

“While the reseller may not have the experience, they typically do have one of the fundamental elements of any marketing campaign – the audience; an intimate relationship with their clientele,” Klapproth explained. “So while a DM piece from a vendor may end up in the round file, a similar piece from a reseller will have a higher open rate because it has come from a known ‘colleague’. The reseller is also the expert on his customer community and may be able to add valuable insights into which marketing programmes will be most effective.”

The latter is an especially important point, according to Mark Power, managing director UK and Ireland of Netgear, whose company won both the 2005 and 2006 Networking Vendor of the Year CRN Channel Award thanks in part to the introduction of a range of new channel marketing initiatives.

“Resellers should be able to expect more from their vendors than bog-standard marketing support; more than just basics such as standard collateral and logos,” Power said. “It’s important that they have access to a dedicated team that they can turn to for personalised marketing advice.”

“It also goes beyond this. These days it’s just as important that the relationship is a two-way street. It shouldn’t only be about the vendor being prescriptive and ‘telling’ the reseller how to sell – they’re already pretty good at that. Instead, resellers need vendors who will listen to them; vendors that will work with them in going-to-market to maximise the impact on sales.”

Shepherd, again, is in full agreement and said that vendors should see co-marketing as a way to empower resellers to maximise revenues for all parties.

“The best, most forward thinking vendors and distributors recognise this,” she said. “They look at their reseller partners as an extension of their own sales forces and furnish them with similar levels of sales and marketing tools and support.”

According to Bernard, the thing that constitutes a good deal for VARs is a co-funded campaign that provides the resellers with the right resources, information and speakers.

“VARs should commit their budgets where they are sure they have the right competencies and messages,” he said. “There will always be a need to promote the company versus marketing the solutions they offer together with their partners.”

Therefore, according to James Clark, head of marketing at the Westcon Group, it is also a good idea for resellers to get closer to their distribution partners.

“Advertising is expensive and not targeted enough for most resellers,” he said. “Tactics such as email campaigns can crash and burn if they don’t make it through spam filters. So our advice for resellers looking for marketing support would be to get involved with their distributors; talk about their growth plans and which product areas they are looking to move into, and ask for help with appropriate targeted marketing activity.”

Lekerman agreed, but warned resellers to double-check the messaging as well as brand weighting and placement.

“Activities that allow a level of personalisation, so your value-added messages are included and highlighted, will be effective in helping you differentiate,” he explained.

“But it’s vital that you understand exactly how your brand will sit alongside the larger brand. Are you the primary or the secondary brand, for example? And remember, you may not be the only organisation using the same campaign on the same general audience.”

Just as important, according to Shepherd, is measuring the success or otherwise of the campaign after and, if possible, during the event.

“Reporting and analysis are vital,” she said. “Vendors should have specific metrics and processes in place from which they can derive and analyse key learnings. They should also share these learnings with their channel partners.”

Resellers clearly need to be asking some tough questions of their alliances before signing up to particular campaigns: ‘How is it going to empower my business?’; ‘What is the opportunity exactly?’; ‘Where’s the value?’; and ‘What’s in it for me?’

However, they must be as ready to share in a campaign’s risks as its rewards, warned Klapproth.

“It is likely that the vendor has more money to devote than time, while the reseller can offer manpower in lieu of an equal financial investment. But if either party isn’t willing to ‘invest’, then the campaign isn’t worth doing. A successful campaign balances the ‘what’s in it for me?’ school of thought with the ‘what’s in it for them?’”

The answers to these final questions reside in the collective willingness of vendor, distributor and reseller to work not just with, but for one another. In the end, it will be this as much as any other factor that decides whether the ‘co-’ in your co-marketing ends up being short for co-operation or consternation.