Top 5 Channel Marketing Trends: Intelligent Marketing Fund Allocation

BrandMuscle | November 15, 2019

Earlier this year, we hosted Jay McBain from Forrester and Jason Tabeling, Executive Vice President of Product Management at BrandMuscle. They discussed five emerging trends impacting channel marketing and how channel marketers can prepare for these changes. This is the last in a five-part series.

1. How closed-loop analytics will unlock business knowledge, and the ways technology and learning will accelerate measurement across the channel.

2. The ways conversational user interfaces (i.e. chatbots) will be applied across the channel and the benefit to partners and brands.

3. The impact increased marketing knowledge can have on channel partner revenue growth.

4. The ways digital is evolving traditional marketing channels and creating new opportunities for targeting, personalization, and optimization.

5. How historical data and trends will empower intelligent marketing fund allocation and improve channel partner participation.

A Discussion on Intelligent Marketing Fund Allocation

Jason: So the fifth and final channel trend that we wanted to talk about is intelligent marketing fund allocation. This is probably the most specific and nuanced of all these, but for our channel partners this is really important. What we saw on our state of local marketing survey is those that have strong co-op programs from their corporate marketers grew their business 43% higher year-over-year than those that did not have that level of support. Funding these opportunities well can positively impact business results.

Jay: I would add one other nuance to this. One of the master changes that we’re seeing in partnerships across many industries is the influx of different and new types of partners. I used to call them “shadow channels” because they’re kind of coming in from different angles and outside of the traditional structure of a program. This means that the co-op application might have less traditional parameters. It could be calculated based on a partner’s specific strength with a buyer. It could be based on their strengths in a sub industry. It could be on their strengths geographically, or could be based on their strengths on a particular customer size, segment, or sector. But there’s like five new vectors that you could actually invest MDF funds in to get those results without anchoring it to the traditional resale side of it. There are several industries where that’s happening and brands are making some pretty significant gains in terms of investing MDF more widely and obviously deeper to get more penetration in the market.

Jason: Yeah, absolutely.

Jay, we’ve talked about this before, but let’s review for the audience. We asked people in our survey “are you using all your co-op funds?” and what we saw was 72% of people said yes, I’m using all of my co-op funds. A vast majority of people said they are using the full amount. What we see in our actual data, though, is quite the opposite. We saw that participation rates sub 60%, meaning, they’re involved at less than a 60%utilization rate of all the co-op funds that we manage is sub 40%.

We talked earlier about the value of putting these funds into market and how important it is. People think they’re doing it; yet, at the same time, our actual data would indicate that they’re participating in a much lower rate and utilizing the funds at an even lower rate. Our job in this, when we talk about intelligent fund allocation, is to think about increasing these by 2-3-5, 10%.

Jay: Yeah, what exasperates this is some of those lower utilization rates, they still have some overpayments and some fraud and other things in there. We’ve taken strides in terms of cutting that. But now there’s technology, and BrandMuscle does a lot of this in terms of making sure that the dollars that are spent are legitimate and obviously driving value.

Jason: Absolutely. So this one’s showing our cards a little bit, but this is where we think it ties together a lot of the things that we mentioned earlier. We think there’s a huge opportunity to leverage big data, machine learning, conversational interfaces, Natural Language Processing — all the marketing buzzwords do have value in this specific case.

Jay mentioned that 66% of the people want us “to do it for me” or “do it on my behalf.” We know 72% of the time, people are spent doing administrative tasks, so that’=’s a barrier to entry of using these funds. We think about proactively reaching out, leveraging big data, leveraging machine learning, saying, “Hey Pete, you’ve got $500 of coop funds going to expand it expiring at the end of the month, would you like to use them on these tactics? We’ve seen X percent response rates from people just like you.”

We know this information, and sometimes we have to pull it together, create the wisdom of crowds to make it easy for them, and let them click a chat back or a text back saying one for yes or Y for yes. Then that fund goes into market, and we execute the campaigns tearing down some of these barriers. I think this is a real opportunity and a real trend in this space.

Jay: Yeah, and there’s no one at a local business at Wichita, Kansas that would have access to the varied amount of data that you have and the ability to be predictive and prescriptive. It gets to the point where with a lot of stuff in marketing, we don’t exactly know why a certain headline worked, or why a certain tactic drove more than another. We could spend six months trying to study it, or in real-time, we can offer it up to other local businesses that look like that one in Wichita, Kansas and get some instantaneous results. This is the biggest change in marketing, and I’m really excited about this.

Jason: We couldn’t agree more with that. I think this is a huge opportunity for us of the business, for channel partners overall and how they think about it. There are opportunities for actionable things like seasonality-varied goals, geographic and historical performance. Whatever these things are for your business can really help unlock some differentiators.

Jay: Yeah, I’ll say one final kind of funny story on that. There is a vendor that does call-outs, a kind of power dialing and after nine billion phone calls a week. They figured out if it was raining in Chicago and the Bears were playing that night, there was a 12% less chance that someone was going pick up the phone. You could spend six months trying to study why, or you could look at every phone call and check the weather and check the NFL schedule, and if those things are happening, reroute the next call. That’s kind of what’s happening in marketing today. In this idea there’s just so many variables. There’s no way of human could go through all those variables, and sometimes there’s no way we could explain why the weather and football would have any difference in the world. But we don’t need to. We know that that 12% is there so we’re going to get it to the best possible place and execute really in real time.

Jason: So takeaways for this one: We know that folks are not using their co-op funds to the level that they think they are, or that brands want them to. We also know that leveraging those funds directly leads to increased revenue growth and increased performance and the opportunity here. By surfacing some of those data and insights, leveraging what we know about the market and what these different vantage points and data points can tell, you can unlock some of these insights and really take advantage of the market.

Those are the five big trends for us, just to summarize: closed-loop analytics, time together marketing with end sales, conversational user interfaces, having that software fade into the background a little bit and making it easier to engage, not requiring them to learn a new software tools. Exploring increasing marketing IQ, we saw people that were more sophisticated in the maturity matrix grew their businesses twice as fast as those that did not. Digital evolution of traditional tactics: getting some data and measurement into that old-school, out-of-home, Direct Mail that maybe you couldn’t before. The most recent one we talked about is intelligent marketing fund allocation. So those are the key things we’re watching.

Want to Hear the Whole Conversation?

Check out our June 2019 on-demand webinar with Jay McBain from Forrester to learn more about effective marketing fund allocation.

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About the Presenters

Jay McBain, Principal Analyst, Forrester

Jay leads Forrester’s research and advisory for global channels, alliances, and partnerships. He focuses on B2B marketing in the age of the customer; understanding and navigating the complexity of multiple routes to market; ensuring contextual and relevant content to accelerate the indirect sales process; and describing the technology infrastructure to build and support channel relationships.

Jay provides research, advisory, and consulting to companies ranging from Fortune 100 vendors to startups on the entire scope of their channel and alliance strategies. He is a contributing author and has been cited in numerous channel media publications, including Channel Reseller News (CRN), ChannelPro, ChannelE2E, The VAR Guy, MSPMentor, Channelnomics, Computer Dealer News (CDN), Australia Reseller News (ARN), eChannelNews, Business Solutions Magazine, ChannelLine, ChannelInsider, SearchITChannel, Redmond Channel Magazine, Vertical Systems Reseller, Channel Buzz, and SMB Nation. He also maintains a popular blog on channel trends.

Jason Tabeling, EVP Product Marketing, BrandMuscle

As EVP of Product Management, Jason Tabeling creates a unified strategic roadmap for the organization across its full suite of products. Jason joined BrandMuscle as Senior Vice President of Digital in 2016. Shortly after, he led strategic efforts to combine the digital, traditional, social media and event marketing teams at BrandMuscle into a single department and center of excellence for BrandMuscle’s clients. Today that team totals 95 and counting. Under his leadership, client demand and satisfaction have grown and employees have thrived.

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