Why Funds Go Unused There are many different reasons why partners fail to tap into incentive funds. For example, it may stem from lack of engagement or awareness among partners, shifting marketing priorities or a perceived lack of value. As Computer Market Research explained in a recent white paper, partners often fail to meet critical deadlines. “While there are a variety of reasons why partners miss deadlines, it often has to do with a lack of marketing resources at the partner level,” explained Computer Market Research president and CEO Del Heles. “Distributors and reseller/retailers don’t have enough trained staff to manage all their tasks. The second issue is that most have a manual system and are using Excel spreadsheets that don’t have any reminder functionality. And lastly, each marketing project will typically have many deadlines.” Heles pointed out a scenario where a client had 532 vendors providing marketing funds, each managed through a separate Excel spreadsheet. Handling these accounts proved challenging and time-consuming, and required three full-time employees. As this example demonstrates, automating co-op management could help to save time and maximize funds. Key Co-op Deadlines to Keep in Mind Computer Market Research pointed out five important deadlines that resellers and distributors need to keep in mind to keep co-op funds from expiring. 1. POS report deadline: This applies to distributors using point-of-sale (POS) reporting. Partners must understand when vendor POS reports are due. “It’s important for all channel partners to know how often their funds accrue,” explain Computer Market Research analysts. “Typically, funds accrue quarterly, annually or on a schedule pre-determined by the vendor.” 2. Prior approval deadline: After accruing funds, the partner must submit a formal prior approval request detailing the terms and objectives of the agreement. According to Computer Market Research, a significant amount of money gets wasted during this stage of the process. Partners must know how much time they have to submit a prior approval request. “It’s common for a vendor’s co-op program to stipulate and place an expiration period on unused co-op accruals,” said Computer Market Research. “Whether it be a quarter, two quarters or a year, partners need to always keep track of this period of time.” 3. Activity completion deadline: All co-op agreements come with expiration dates. Partners must understand how long they have to complete approved marketing activities. “The time period for this activity differs from vendor to vendor,” said Computer Market Research. “To complete a marketing activity, some vendors give their partners two quarters and some allow only one quarter. Exceptions for certain circumstances are also not unusual.” 4. Claim submission deadline: After the vendor approves the marketing activity, there is a limited time for submitting a claim form. For example, the vendor may offer a 90-day window. “If partners do not meet the claim deadlines, they will forfeit the corresponding co-op accruals,” the white paper continued. “The costs associated with all the marketing activity becomes partner’s responsibility.” 5. Payment deadline: Co-op funds typically become available to the partner after the vendor approves the claim. “Vendors need to disclose the maximum number of days it will take for their partners to receive payment,” explained Computer Market Research. “This is a practical way to avoid discrepancies and payments to slip through the cracks.” o Types of Incentives Offered by Technology Provider, % Offering Market or business development funds (MDF/BDF) 51% Co-op advertising or promotional allowance 51% Individual performance incentives (SPIFFs) 48% Rebates on volume of goods purchased 45% Rebates on individual transactions 38% Source: 360insights 43 JANUARY - FEBRUARY 2024 | CHANNELVISION Source: YouGov, November 2023 Percentage of Funds Used Source: Brandmuscle HIGHEST SPENDERS HIGH SPENDERS MID SPENDERS LOW SPENDERS FUND UTILIZATION 90%+ = HIGHEST SPENDERS 75-89% = HIGH SPENDERS 50-74% = MID SPENDERS 25-49% = LOW SPENDERS <25% = LOWEST SPENDERS LOWEST SPENDERS NONE NOT SURE Plans to Invest in AI Analytics-Driven Quality Management Source: NICE benchmark survey, 2023 We already have it We’ll have it within 6 months We’ll have it within 7 to 12 month We’ll have in 12+ months 36% 10% 7% 16% 9% 9% 13% 14% 12% 29% 45%
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