Vendors, Market Development Funds and the Faith Market

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Manufacturers want to help systems integrators sell their products so they provide funds to help co-promote the equipment with the vendor. It’s been this way for as long as I can remember, whether it is called “co-op funds” or “market development funds” (MDF) or “channel funding,” the idea is to influence the sale towards the manufacturer’s product line. It is long overdue for a change, and today’s marketing technology stack has the tracking tools to (finally) track spend to return on investment (ROI).

Old and Broken

The administrative overhead of managing and reporting on MDF fund spending has been both a headache and something of a joke that neither party laughed about. If the manufacturer gave ‘X’ dollars to help promote their product line to either a vertical market or to support trade show spend for integrators, the idea was to guess how many prospects would be touched by the program, how much the integration firm guessed each prospect might spend, what percentage of the prospects would reasonably turn into clients, and the ultimate guess of what each new client might actually spend.

Houston, we have a problem: there’s little to no direct tracking of these prospects back to the MDF spend, and the timetables for capturing MDF spend to prospect conversion to a contract signing would often span years, which exceeds the MDF reporting mechanism (usually quarterly, or at least annually).

And, yet, decade after decade, the manufacturers’ have willingly forked over millions of dollars with no hope of accurately tracking the spend to ROI. The assumption has been that the net invoices from a systems integration firm to a manufacturer should be a gauge for determining how much funding should be allocated for the next year.

To say that this methodology and practice is entirely broken and outdated is a massive understatement for the audio, video,and lighting (AVL) industry. It’s got to change.

Targeted Tracking

Every digital marketer has at least a simple model for how this works today if they’re using the most ubiquitous advertising venue online: Google AdWords. In a nutshell, marketers test different versions of ads that appear either at the top of a page of search results or off to the right side of the browser page and look at the results to see which ones get the most click-thrus and, of those, which ones follow through to filling out a form or an online chat. In this way, it’s fairly straight-forward to understand how much is spent compared which leads ‘convert.’

Today, the technology goes much deeper, with attribution tracking now cookied per device and if identified as a logged in user of Google, for example via their Gmail account, saved against their user profile. It’s the result of consumers choosing convenience over ultimate browsing privacy, and it explains why people can search online once for a product and suddenly see that product promoted to them on their social media, in their online searches and in ads while browsing other sites. And that’s just the data that’s the low-hanging fruit for digital marketers!

Enter content marketing automation (CMA) software, such as Pardot, Hubspot, Marketo and InfusionSoft, and now digital marketers have deep tracking analytics on a user-by-user basis, all tied back to specific marketing campaigns and advertising campaigns with the synchronized data saved to their customer relationship management (CRM) software on the cloud. And, because of the automation and customizable rules that can be built based on the campaign source, attribution of monies spent in advertising and marketing efforts are now track-able all the way back to each touchpoint and the associated campaign. The result is a history of highly attributable actions that provide a very, very clear picture of ROI over time — even years.

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For example, it’s now possible to know when a visitor first comes to your website or landing page or clicks on an advertisement. A cookie is embedded onto each device to begin the digital tracking. Once that visitor fills out something and associates themselves via a social network (using something like OAuth), they turn into a bonafide prospect in a CMA database, which is synced with the CRM database. Over time, each subsequent action is now tracked — including their browsing history on your properties — each time they click through from an ad or third-party site to an owned property or fill out a form to get a resource or request more information or even just chat with a live person. At each step, a little bit more is revealed about the prospect and their profile is updated. Taken from beginning to end, it provides a detailed — and reportable — buying journey with tremendously valuable data points about how long their journey took, what key steps were useful in converting them into a qualified lead, how they entered the sales pipeline and which marketing assets helped sales close them as a client.

ROI at Last

Right now, most systems integrators within the AVL market are not yet using content marketing automation software to provide this level of visitor-to-prospect-to-client tracking. However, it is entirely possible — and I would even say recommended — that the manufacturers need to rethink and retool their marketing to take advantage of these powerful software options. In this way, manufacturers can provide systems integrators with unique forms and tracking codes to use on the integrators’ websites and ads so that the attribution of those co-op dollars is tracked and shared in real-time with both the manufacturer and the integration firm.

This kind of visibility and accountability would then give manufacturers the ability to fund those firms doing the best job of converting leads and reduce (or remove) funding from integrators that are only spending the MDF funds instead of creating new customers from the money. Gone, too, will be the administrative overhead on both the manufacturer and system integrator as reporting can be 100 percent automated, and even real-time.

This is a powerful shift in the AVL MDF economy and one that is long overdue. Automation and digital marketing are at the forefront of this change, and the integrators that balk at this level of ‘intrusion’ will soon lose out on the funding altogether — and not a moment too soon for manufacturers looking to increase profits in an increasingly crowded marketplace.

Client MDF Funds

One last idea here is to create client partner marketing funds for the faith market. As a former church technical director, I recall the numerous times another church would visit my venues and ask about the technology we had chosen for AVL and our opinion of the integration firm we had worked with. There’s a real opportunity here to provide real funds from the manufacturer to spend on new upgrades and technologies for churches willing to be a responsible demo facility and customer success story on an ongoing basis. This both reinforces the loyalty program concept and provides the online tracking (such as a site visit or demo request form) to begin the attribution tracking at the manufacturer level even before a systems integrator is brought into the loop by the prospect!

Welcome to the 21st century of digital marketing, manufacturers.

Does your firm track co-op funds all the way through to ROI? Share your views and opinions in the comments below.