Whitepaper describes "Best Practices" for Co-Op/MDF management

1. Executive Summary
Visibility and Flexibility
Forecasting and Reporting
RESEARCH
COMPUTER
MARKET ™
Checks and Balances
Solutions
Real-Time Data
Co-Op/MDF Vendors and Solutions
Automated
Regulatory Compliance
Top Ten Best-in-Class Solutions Checklist
About Computer Market Research (CMR)
Co-Op and Market
Best-of-Breed Capabilities to Consider when Evaluating
Development Fund

2. Industry White Paper CMR Co-Op/MDF
Contents
Executive Summary 3
Visibility and Flexibility 3
Forecasting and Reporting 4
Checks and Balances 4
Real-Time Data 5
Regulatory Compliance 6
Top Ten Best-in-Class Solutions Checklist 6
About Computer Market Research (CMR) 7
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3. Industry White Paper CMR Co-Op/MDF
Executive Summary
Almost all vendors – manufacturers and wholesalers – have programs in
place to manage Co-Op advertising and special marketing funds. But a sur-
prising number of them aren’t satisfied with the technology they’re using.
And some may still be using “semi-” automated systems, such as spread-
sheets and digital document files.
Manual systems and “semi-” automatic systems are time-consuming and
often inaccurate or incomplete. There are far more efficient, fully-auto-
mated, online alternatives that can more accurately process, track and
accrue funds. They often include robust communications with full tracking
of all marketing efforts and comprehensive visibility into activities across all
channels.
This paper is designed to demonstrate to channel management personnel
the potential for making significant and profound changes in the methods
and technologies they use to automate traditional administrative processes
and manual reporting functions to improve efficiency, accuracy and return
on investment from trade promotion funds. It also provides guidance on the
capabilities to request from providers when evaluating automated Co-Op/
MDF solutions.
Visibility and Flexibility
A best-of-breed Co-Op/MDF solution will provide the highest level of
automation to give channel managers greater flexibility and visibility into
their own channel programs as well as the activities of everyone in their
channels.
It’s common for marketing programs to change frequently, as adjustments
are made, to adapt to evolving market conditions. The best online technolo-
gies will provide capabilities for establishing a proper set of business rules.
These rules will include agility and flexibility and will allow new and modi-
fied rules to be entered down the road. Simplicity and clarity have great
value here – when rules are too complex, it can be difficult for vendors and
channel partners to embrace the technology as market needs change.
The best automated solutions will allow new marketing programs to be
designed based on actual distributor and reseller performance. It will also
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4. Industry White Paper CMR Co-Op/MDF
support an accelerated Co-Op/MDF fund approval process. This enables
prior approval requests, Co-Op claims and market development funds to
be easily entered by partners and reviewed by manufacturers in real time.
Simplified processing means that reseller and distributor data collection
and reporting processes are streamlined and real-time information is always
available.
Forecasting and Reporting
Newer, automated channel management tools provide reporting and fore-
casting functions that assist in decision making about investing funds to
produce the best ROI. They enable a forward-looking evaluation of the next
quarter or the next year through a dashboard view and useful reports.
Managers can view where partner marketing efforts are being focused
and the types of funds being requested to support decisions about future
expenditures.
These functions can substantially reduce the time required and cost of labor
and administration needed for regular, proactive management of channel
funds.
Co-Op/MDF solutions with the best functionality will include channel
analytics that can be performed by territory, reseller, product or distribu-
tor. They will also support constant tracking and measurement of channel
program and trade promotion ROI.
Checks and Balances
The most capable channel management platforms include best practice
routines that perform checks and balances of market funds to ensure that
all requests and reimbursements are processed through the appropriate
approval process.
At the first validation level, the system collects all information necessary for
approval. In the second validation step, administrators can post requests
to a “revisions required” status if there are still questions about the request.
Incomplete requests are routed back to the partner, with information on
what needs to be added or changed to receive approval.
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5. Industry White Paper CMR Co-Op/MDF
The system automatically identifies and informs users when claim forms
are incomplete. Only completed forms reach the claims processing desk.
As information is passed from party to party, privacy and data security are
always assured.
Pre-established approval hierarchies are also valuable. For example,
requests under $10,000 might be routed by default to a channel man-
ager, while fund requests over that amount are sent to a vice president for
approval. This reduces confusion on approval rights and reduces time spent
on back and forth reviews. Automated email notifications route requests to
the appropriate approver to ensure the correct chain of command is fol-
lowed for all marketing fund approvals.
Real-Time Data
The best partner and administrator tools will support communications back
and forth via efficient online means and will display all available data in
real-time. These tools have many advantages over older time-consuming
technologies based on making phone calls, and sending emails and faxes.
There will be instant and secure access to all Co-Op and MDF balances
YTD, totals earned YTD, total claims YTD, claims pending and claims paid
out. They can be instantly accessed and downloaded at any time, from any
secure connection.
When funding requests are approved, partners are free to conduct their
marketing activities and events, such as print ads, online ads, trade shows,
etc. When those events are completed, the partner can access the online
interface to add a claim and upload the supporting documentation to pro-
vide proof of performance.
Partners only have access to claim against what’s already been pre-approved,
and can review activity details projected on the original request. The most
efficient Co-Op/MDF systems not only allow the submission of multiple
claims and multiple invoices, but the upload of one claim at a time to receive
payments faster. The system requests certain supporting documents based
on activity type, which the partner is required to upload with related expense
dates and amounts.
A claim ID is issued for every record, keeping the documentation with the
claim for easier tracking and reporting. If there’s a discrepancy between
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6. Industry White Paper CMR Co-Op/MDF
the submitted documentation and the approved amounts, the partner can
easily be pinged via email to address and correct inconsistencies.
Regulatory Compliance
Market development funding (MDF) and other discretionary marketing
expenses have a direct impact on financial reporting. An integrated Co-Op/
MDF system can help companies establish auditable financial reporting
controls that assist with Sarbanes-Oxley, Robinson-Patman, and other regu-
latory compliance requirements.
Top Ten Best-in-Class Solutions Checklist
Successful market development programs require time, focus and invest-
ment to develop, implement, adjust and perfect. They require a conscious
application of sound strategies and proven best practices. The following
checklist provides suggestions on the capabilities and functions that com-
panies should look for when evaluating automated Co-Op/MDF platforms.
• Prior approval requests, Co-Op claims and market development
funds should be easy to enter for partners, and reviewed by channel
management personnel in real time.
• Ask whether Co-Op and MDF balances for YTD, totals earned, total
claims, claims pending and claims paid out are accessible through
an easy-to-use, online dashboard.
• Reseller and distributor data collection and reporting processes
should be simple and streamlined. Real-time information should
always be available.
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7. Industry White Paper CMR Co-Op/MDF
• The system should automatically identify and inform channel
managers when claim forms are incomplete. Only completed forms
should reach the claims processing desk.
• Quiz vendors on how their solutions will assist you in substantially
reducing your overhead and labor costs.
• Make sure that channel program and trade promotion ROI can be
constantly tracked and measured.
• New marketing programs should be easily designed with actual
distributor and reseller performance data.
• Look for robust channel analytics that can be segmented by terri-
tory, reseller, product and distributor.
• Make certain that data security and privacy policies are secure and
maintained at all times.
• Insist on a fully-hosted, online solution with service level agree-
ments that guarantee instant and secure access, 24/7.
About Computer Market Research (CMR)
For more than 28 years, CMR has delivered cost effective, technology-based
applications and services to manufacturers to assist them in managing
channel data, optimize their trade promotion investments and maximize
the effectiveness of their distribution channels. CMR’s Web-based solutions
accelerate and automate distributor and reseller data collection, process-
ing, analysis and reporting. CMR’s Co-Op/MDF clients include Plantronics,
Qlogic, Targus, and Jabra (GN Netcom), among others.
For more information, please call CMR at (858) 795-1021, or visit
www.computermarketresearch.com.
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