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Channel Partners Make Bigger Investments In Marketing Their Own Brands & Vendors

  • Written by Terry Moffatt, Contributing Writer
  • Published in Industry Insights
Featured Channel Partners Make Bigger Investments In Marketing Their Own Brands & Vendors

When two partners introduced Kerstin Demko, Sage’s North America Partner Marketing Director, to their first-ever dedicated marketing employees, she realized that a program to encourage partners to be more active marketers was getting traction.

“I see more of our partners actually hiring marketing people in their organizations,” Demko told Demand Gen Report’s sister publication, Channel Marketer Report. She is also encouraged by the growth of partners hiring agencies to provide marketing support. Sage offers a list of a recommended agencies to partners through its concierge program. 

Helping partners to drive more of their own pipeline is a top priority for the business management solution vendor. Providing partners with leads to close, implement and manage “doesn’t necessarily work anymore,” said Demko, as Sage goes through its own digital transformation to adapt to the reality of the market.

Rather, the company is now striving to help its partners “drive customers through the journey of selecting, considering and deciding what new technology they should bring into their organization,” said Demko.

Partner Participation Is On The Rise

There are indications that compelling partners to play a bigger role in lead generation is becoming a lighter lift for Sage and companies with similar ambitions. For example, according to the 2019 State of Local Marketing Report by BrandMuscle, an integrated local and channel marketing solution and services provider, 80% of partner respondents said they are investing significant time to learn more about marketing. Those who made the commitment to up their marketing skills showed increased business growth.

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To keep channel marketers from getting too excited about that data point, BrandMuscle advised that the percentage of partners who don’t actively market themselves or the brands they represent is probably higher.

“While we know from participant responses to our study that 11% aren’t interested in marketing and don’t make it a priority,” the report noted. “We believe the number to be much higher. Considering participation bias or non-response bias, we can safely assume that those who chose not to participate in the marketing study are likely to fall into the same category.”

Other surveys, however, also indicate that partner participation in marketing programs is rising. A Forrester study for OneAffiniti, a through-channel marketing (TCM) solution provider, revealed that more partners recognize the important role that marketing can play in the success of their companies. While the use of vendor-supplied TCM systems remains low, with only 12% of the respondents currently engaging with them, more partners are taking a closer look. According to the report, 20% of partners are evaluating the tools and another 35% are piloting them.

Marketing is becoming increasingly important for partners who want to differentiate themselves and grow their businesses, noted the digital agency A Fluent Vision (AFV), in a report based on its recent survey. It revealed that 96% of responding partners have purchased either a CRM or marketing automation tool, reinforcing observations made in its 2018 study that partners are willing to make the investment to lead with their own brand and be more strategic in the way they approach marketing.

Limited Resources Stymie Action

For most partners, the lack of in-house resources and marketing experience remains the primary barrier to boosting their own marketing activity. For example, nearly a quarter of the channel partners (22%) responding to the Forrester survey for OneAffiniti cited a lack of their own marketing resources as a key hurdle to engaging with vendor-provided marketing tools.

Respondents to the annual State of the MSP (Managed Service Providers) Report conducted by Datto, a provider of total data protection solutions, agreed. Limited resources were the primary reason that 44% of respondents cited marketing and sales as a pain point. “Few partners have the infrastructure or expertise to support truly effective marketing efforts,” agreed Randy Sasaki, a Partner at AFV.

Fewer than half (42%) of the respondents to the BrandMuscle survey said they can manage integrated marketing programs, but many complained that the help they’re getting from the brands they represent is missing the mark. Slightly more than half said vendor marketing support is no better than a check-the-box exercise.

To-partner communication was part of the problem. For example, many partners weren’t sure which digital tactics were included in their vendors’ programs. And a significant percentage of the partners who did understand which tactics were funded said they needed more training on how to use them, BrandMuscle noted.

According to Forrester’s analysis of data collected for the OneAffiniti report, offering marketing services that help partners make better use of through-channel marketing automation (TCMA) solutions does drive engagement. Partners that engage services for support with the execution of marketing activities are more inclined to use TCMA tools. Almost a third of the partners that use third-party marketing services on at least a weekly basis already use or plan to expand their usage of brand-provided solutions. The remaining 69% are piloting them.

Vendors Boost TMCA Spending

Research indicates that vendors are striving to support their partner ecosystems by making greater investments in channel marketing support solutions. Last year, Forrester reported that sales of TCMA technology, a key component of partner relationship management (PRM) platforms, are expected to rise significantly over the next half decade.

According to Forrester, the market for TCMA solutions will grow to $1.18 billion by 2023, a CAGR of 25.2%. Channel technology companies will generate another $1.3 billion in related services. In addition, thousands of digital marketing agencies will grow to generate $2 billion in related TMCA services over the same period.

Another Forrester study, this one commissioned by by Ansira, a marketing technology and services agency, suggested that forecast might be on target. Nearly three-quarters of respondents noted that improving the experience of their channel partners was a priority for the next year. Marketing performance management, TCMA and channel marketing management solutions are the top investment priorities. More than half of businesses (56%) are investing in marketing performance management solutions, through-channel marketing automation software and channel marketing management solutions.

According to the report, TCMA investment is considerably higher at high-growth organizations than at the slower-growth businesses surveyed. Nearly 40% of high-growth organizations are investing in TCMA, compared to a mere 26% of slower-growth organizations. Still, slower-growth organizations recognize the value of TCMA, Ansira noted, with 31% planning to implement TCMA solutions within the next 12 months.

All of these investments in channel marketing solutions may have a downside. According to a survey commissioned by Act-On, a marketing automation technology vendor, all marketers blame suppliers for the difficulty of integrating their platforms with existing technologies to form a coherent stack. Investments in inexpensive SaaS point solutions by individual channel marketers for their particular problems without regard for interoperability issues have made this a bigger problem for many businesses, Act-On noted.

Seek Skin In The Game

It’s unclear how many partners — especially small to mid-size firms — will ultimately have the ability to make use of the channel marketing tools and services their vendors offer. For vendors, setting reasonable expectations on how much partners will really commit to developing their marketing expertise is well-advised.

Based on its research, BrandMuscle stresses that channel marketers should focus on those partners who will “put skin in the game.” Its data shows that partners with the highest growth invest their own dollars on advertising at a level that is on par with the small business industry standard spend, and have access to a corporate program that provides co-op.

Marketers should think about creating programs that not only give partners funding, but also qualify the investment with requirements for continuing marketing education. Partners should accept corporate support only if they bring a willingness to learn and share in the cost.