How to Enable Channel Partners to Continue Marketing During Downturns

By: James Morse, Senior Director, Solutions Consultant

The cash register isn’t ringing the way it rang just a few months ago. Many of your channel partners may no longer be unable to work due to COVID-19 restrictions, but it is imperative they continue marketing, even with a reduced budget. Other brands are still targeting consumers during this time, and you don’t want to be overlooked when it comes time for them to make a purchase.

Businesses That Continue Marketing During Downturns Fare Better

AdAge wrote an insightful piece this past April titled, “History Shows Marketers Who Keep Spending During Downturns Fare Much Better.” It makes absolute sense, yet we are seeing marketing budgets slashed left and right. The good news for corporate marketing teams is that many of you have channel fund programs with accrued funds already allocated to your channel partners. Many of our clients initially approach us with fears of fraudulent behavior when it comes to their channel fund programs. They see partners applying operational costs for reimbursement or even a doctor’s bill. Traditionally, we’ve recommended channel funds be strategically focused on marketing campaigns and tactics that drive a high return on marketing investment, known as ROMI. We are temporarily going back on previous advice. Now, during COVID, we suggest focusing on your channel partners’ operational needs where possible to incentivize them to continue marketing during these difficult times.

If you’re confident in your current marketing, don’t be afraid to ask for help in the form of marketing dollars or resources in order to execute an effective co-op program. On the other hand, if you’re not so confident, consider scaling back your efforts to focus on specific regions, product lines, or even marketing tactics where you see the most opportunity.

How Do I Incentivize Channel Partners to Continue Marketing?

Your partners are trying to navigate rent payments, employee salaries, and putting food on the table for their families, often prioritizing these over marketing at the moment. Here are a few ways to use strategic fund management to encourage your channel partners to keep marketing:

1. Reevaluate your reimbursement percentages

First, reevaluate your reimbursement percentages. Know the tactics with the highest ROI and potentially reimburse at a higher percentage than normal. This will help lower the amount of out-of-pocket costs to your partners while still ensuring the shared investments lead to shared rewards. Our 2019 SOLM study shows “shared-spend co-op programs between the marketer and partner attain 20% better growth.”

2. Help channel partners stay in business

Next, consider assisting your partners who have temporarily accrued channel funds this quarter in areas such as their office rent and payroll. When business revs up again, the last thing any of us want to see is a decrease in channel partners because they were unable to survive the downturn. While these areas might not have a direct impact on your brand now, they will undoubtedly have a positive impact in the coming months.

Your channel partners will remember your helping hand will be remembered, and they’ll have a stronger loyalty to you than before. By no means do we recommend allowing your partners to request reimbursement for operational activities without marketing first. These two should go hand-in-hand. Identify marketing thresholds that will help move the needle before operational activities are even available.

3. Allow co-op funds to be used for PPE

Finally, everyone is thinking about personal protective equipment (PPE), especially if they have a store, office, or dealership that consumers visit. Consumers who aren’t offered proper protective gear, such as face masks and hand sanitizer, may not visit these local businesses. Allowing your channel partners to apply co-op funds to these protective items through preferred vendors is key, but like the aforementioned operational activities, you want to ensure they are also marrying this with marketing activities. You can ensure the preferred vendors are utilizing your correct logo on face masks and hand sanitizer, or you can kit the items with branded flooring for safe distancing. When reevaluating your channel fund programs, consider how the changes in customer experience (CX) impact your partners.

Ready to empower your channel partners with effective marketing tools?

Contact the BrandMuscle to tearn about our fund management software and personalized marketing services.