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Business drivers [ITP.net (United Arab Emirates)](ITP.net (United Arab Emirates) Via Acquire Media NewsEdge) Although the business climate in the regional channel has improved significantly following the financial meltdown a few years ago, with channel marketing budgets steadily increasing, it has led a vast majority of vendors and distributors to demand greater return on their investments (ROI). As the channel continues to contract, competition for mindshare has continued to increase and with the increasing number of communication channels, marketers have a challenging job to cut through and connect with the broader channel ecosystem. While the major vendors and distributors have maintained their IT budgets, their focus and emphasis on ROI is far greater now than a few years ago. Ian Hutchinson, global director, Channel Strategy, ICLP, said as the channel continues to contract, competition for mindshare will continue to increase and with the increasing number of communication channels marketers have a challenging job to cut through and connect with resellers. Hutchinson said as a loyalty marketing agency, ICLP's focus is a little different than vendors or distributors as it works with them to design and implement strategies and channel marketing initiatives. "This helps to build stronger and more engaged relationships with channel partners to drive sales and revenue and in turn enables the vendors, distributors and resellers to successfully grow their businesses," he said. Hutchinson pointed out that most vendors manage their partner relationships through structured, tiered partner programmes, which is a key vehicle for channel marketing initiatives. He said being able to generate insight from the available data sources connected to the programme, mainly partner profile and sales activity, can create meaningful segments and allow communications to be highly targeted and tailored for individual channel partners. Manish Punjabi, channel marketing manager MEA, Alcatel-Lucent Enterprise, said channel marketing is vital to the company as it is committed to a complete indirect model. Punjabi said Alcatel is one of the few vendors in the region that has an allocated role of a channel marketing manager to drive its channel programme and enable partners to have direct access to resources based in MEA instead of going to its EMEA headquarters. "I work closely with Alcatel-Lucent Enterprise partners to enable them transition from using one-off marketing tactics to multi-touch programmes that make use of PR, social media and digital marketing in order to generate better awareness, demand and consequently, revenue," he said. "We are running programmes that target existing customers to upsell and explore cross-selling opportunities in the region." According to Punjabi, the upsell aspect is a global annual initiative that offers pre-defined tools, discounts, incentives and marketing to encourage Alcatel's end customers to maintain the latest software release and service contract. He added that the cross-sell aspect is tweaked to suit the local flavour for each partner and often becomes a new sub-initiative limited to three or four months. Despite the market squeeze and decline in marketing budgets in some instances, major vendors and distributors have continued to drive channel marketing programmes to reseller partners to help ensure ongoing revenue and boost brand awareness. Elham Alizadeh, channel marketing manager at ESET Middle East, said in today's highly competitive market, channel marketing initiatives play a very important role in ensuring that resellers are inspired. "ESET's go-to-market follows a 100% channel model so keeping our partners motivated and satisfied is absolutely essential to our success. We not only cater to the enterprise segment but also to home users as this is an area that is targed by a number of well-established competitors," she said. Alizadeh said relying solely on technology is not feasible since it is our partners who ultimately drive sales and the company regularly comes up with innovative ways to help them succeed in the market. Hutchinson pointed out that before determining the marketing strategy, clear business and marketing goals, and objectives need to be set and approved. "The desired outcome needs to be fully considered and the view of what success looks like needs to be determined," he said. Hutchinson explained that the nature of channel marketing means that there can be several stakeholders and decision makers from different parts of the business and the added complexity of local and regional strategies. As such, the operating structure and geographic responsibilities are important considerations for developing successful marketing strategies, he remarked. Nat Pisupati, regional sales director, Identity & Access Management, Middle East and Africa at HID Global, agreed and said HID Global works closely with key regional partners and invests resources for channel marketing schemes in order to understand and meet end user demands successfully. "Our on-going activities include joint marketing programmes centred on educational seminars that showcase our latest offerings and the benefits to customers," he said. Pisupati said another key activity is facilitating lead generation via regional marketing campaigns. "These activities also significantly support our initiatives to further raise HID Global's brand awareness and reinforce our market presence across the Middle East," said Pisupati. Rohan Daniel Nair, director, Stratergic Marketing, MENA at Oxygen, a Dubai-based VAD, said motivation for sales success of partners translates into growth for vendors and distributors. Nair said creating a marketing calendar for channel partners helps them pick and choose promotions based on their business objectives and customer needs. "As channel partners long for qualified leads, Oxygen ensures that lead provision is an active ongoing process, through demand generation activities like workshops, events, exhibitions and email campaigns," he explained. While there is no denying that channel marketing campaigns help boost sales, brand awareness and mindshare, measuring the ROI to determine success can be tricky in some instances because not every marketing initiative translates into a sale. "A return on investment should always be agreed when investing in a new campaign. In the traditional sense ROI is usually measured by sales attributed to a marketing campaign but there are other metrics that marketers should consider – metrics that can be proven to generate a positive impact on that vendor's business," said Hutchinson. For example, remarked Hutchinson, ICLP has been able to prove for one client a direct correlation between partner engagement and sales. "When it comes to measuring sales vendors should consider adding marketing campaigns to their deal registration schemes. When registering a deal, a partner can be prompted to enter in the marketing campaign (from a drop down or pick list). This automatically tracks leads generated from the marketing campaign and when deals are closed a revenue figure can also be identified," he advised. Alcatel's Punjabi concurred and emphasized that measuring marketing ROI is not always as simple as it's made to look because every campaign comes with a set of rules and success or failure depends on ROI. "One of the basic challenges of measuring marketing ROI is that success isn't necessarily defined purely as sales. In many cases, a marketing campaign is meant to achieve brand recognition or to generate leads. These contacts may not immediately lead to sales, but will increase the probability of sales down the line," he said. Another challenge, according to Punjabi, is in calculating the accuracy of marketing ROI. "Recording data on campaign costs and the resulting sales is dependent on the personnel involved on all sides of the marketing and sales effort. The larger the organisation, the more complex this problem can be," he added. At MMD and AOC, Vineeth Sebastian, regional sales director-MEA, said although measurement of ROI depends on the overall target to be achieved by a specific campaign, there are other determining factors, too. "We look at factors that provide actionable insight into increasing the effectiveness of specific tactics, integrated campaigns and overall marketing strategy. The end goal is to have a suite of measurements that can be used to identify current performance, diagnose performance gaps, guide marketing decision to improve the performance and profitability, and test and assess new marketing initiatives," said Sebastian. He explained that channel partners need to understand all facets of various marketing campaigns so that they can make an informed decision and earn attractive incentives when they achieve the campaign objectives. "Most channel marketing campaigns are designed to provide support to the channel ecosystem with an array of services that engender a stronger, more profitable relationship with the vendor or distributor. "These channel marketing campaigns drive performance and offer a way for increased revenue and profitability," he said. While increased collaboration between vendors and channel partners (especially power retailers) in developing customer-facing marketing strategies to address frustrations from the broader channel ecosystem in the region have gone some way, challenges still persist. ICLP's Hutchinson believes the biggest challenge for resellers, mainly those that are small to midsize, is often their lack of time, resources and skills to design best practice marketing campaigns with clear objectives and metrics. "This is where vendors can really add value to their relationships with their partners and resellers," he noted. Hutchinson pointed out that vendors and distributors can provide marketing skills education, via their partner portal leveraging the wealth of information that is used by their internal marketing teams. "Packaging this up for partners can be of low cost for the vendor and create a key area of differentiation," he said. He added that a more recent development in partner marketing is the provision of marketing concierge services that put partners in touch with marketing practitioners who can help them create and execute marketing campaigns on their behalf. "This keeps the message and design on brand and will have tracking mechanisms built in so vendors and partners can track the performance of the campaign," he said. ESET's Alizadeh said many times channelmarketing programmes are specifically timed to address pressing market needs or to coincide with new product launches. "Unless reseller partners share the vision of the vendor or distributor running the marketing campaign, it would be hard for them to see the initiative as part of a long term strategic scheme instead of a one-off rewards campaign," she said. Sebastian said many at times, channel partners don't need to be enticed in order for them to join a channel marketing initiative. "We do incentivise each and every channel marketing campaign we work on. Vendors need to make sure that each of the channel marketing campaigns they plan have an element of earning for every campaign," he said. He pointed out that resellers, system integrators and retailers in the Middle East region undertake lots of activities to market themselves beyond the vendor brands they represent. "As MMD and AOC, we make sure that end users and corporate clients know our resellers and the entire channel base," he said. One of the realities of the Middle East channel today, is vigorous rivalry among vendors and distributors to attract the best channel partners. Incentives are one of the key means by which both vendors and distributors attract and retain quality partners. While incentives can encourage a change in partner behaviour, it's not necessarily what drives most partners to engage or respond positively to a marketing campaign. Hutchinson agreed and pointed out that in a recent channel survey carried out by ICLP, financial incentives did not feature in the top five factors that were important in driving their loyalty to vendors. According to Hutchinson, access to technical experts, timely information, ease of doing business were all deemed more important that financial enticement. "The marketplace is crowded with several channel marketing models as every vendor is vying for the distributor's or reseller's attention. Programmes have continued to come in various shapes and sizes with links to back-end rebates, prizes, discounts and incentives. In the end, while the channel marketing schemes seek to drive revenue for the vendors, resellers can leverage these initiatives to boost their gross margins simultaneously. This is why it's critical for channel partners to understand and engage vendors in their channel marketing drives," said Punjabi. (c) 2014 ITP Business Publishing Ltd. All Rights Reserved. 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