In the first blog of this series, I focused on the transformation of Partner investment funds (i.e., MDF, BDF) in response to the evolution of the indirect channel, including the adoption of partner ecosystems, alignment with customer buying journey, focus on long-term partner success, and increased competition for partner mindshare.

For the second blog, I highlighted the importance of including meaningful partner investment funds in your business proposition strategy which is key to gaining partner mindshare.

In this blog, we will focus on optimizing the results and ROI of partner investment funds through effective joint business planning and agile allocation of funds. To be efficient and effective, the objectives and activities should be prescriptive and measurable, ownership and accountability must be clear, and collaboration must be continuous.

Joint planning significantly improves the effectiveness of development fund activities. The joint plan should be an intersection of vendor and partner strategy. If the plan is not aligned the results may not provide optimal ROI because the partner does not have appropriate capabilities or motivation. Joint business planning has become much more formal and strategic. Gone are the days of ‘what activities should we run this quarter’. Funds should be allocated to partners, and development funds proposals approved based on the vendor’s channel strategy for the year and quarter. Joint business plans should have clear objectives, success metrics, and milestones.  As each milestone is reached, development funds can be approved to assist in getting to the next milestone.

As part of joint planning, provide guidance to partners on activities based on their maturity and capabilities. Established partners should focus on market development and demand generation while newer partners should focus on partner readiness activities. Microsoft guides partners to utilize available MDF based on their sales. Companies with relatively low sales, usually a sign the partner is relatively new to the vendor, should focus on partner readiness, while partners with higher sales should focus on market development.

Automation and integration can improve joint planning success, improve ‘ease of doing business’, transparency, and performance tracking. Business Relationship Management Systems with strong joint partner planning functionality ensure vendors and partners are aligned from beginning to end.

Joint execution and follow-through are critical to activity success. Vendor and partner sales teams should be informed and aligned. Activity results should be reviewed regularly and adjusted, as necessary. Many partners may not have the capabilities to execute the activity effectively, or their marketing departments may not have enough resources to manage MDF effectively. Co-execution can help mitigate these challenges and maximize the activity ROI.

Pre- and post-activity planning ensures the smooth execution of activities, particularly events. This planning is necessary at an activity/event level, which is above and beyond the joint business plan. Frequently activities are defined and scheduled during joint business planning, but the actual planning of the activity is left for granted. Activities should have a formal schedule with roles and responsibilities clearly defined for the partner and the vendor.

Make it easy for partners to identify funded activities that are best for them by consolidating, standardizing, and simplifying their choices. Many programs have grown over the years to include activities that are unclear or duplicative.  When activities are not clearly defined, partners will be hesitant to engage in the activity or they may execute the activity ineffectively. Each activity should have a clear description, requirements, and anticipated results.

The activities that run the smoothest and are the most effective are those that are pre-defined or pre-packaged. These activities require little effort by the partner to set up. This also provides the opportunity to be prescriptive in the desired results and the ability to compare performance across partners. Ineffective programs have many one-off activities that are costly to set up, difficult to manage, and impossible to measure.

Investment fund activities obtain optimal ROI when they are strategically aligned between vendor and partner, clearly understood, efficient to implement, and jointly executed.

Stay tuned for the next blog highlighting best practices for improving investment fund utilization. It is not unreasonable to expect 80 to 90% utilization rates even though the industry average for fund utilization is less than 50%. Did you miss Part 2 of the series? Click to read now.

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