Starting with MDF programs, we'll identify the key challenges and highlight success criteria of traditional incentives. From there, we'll drill into why it's not just necessary, but imperative, that your incentive programs evolve beyond historical funding programs to the “new world” of channel incentives.

1. The New World of
Channel Incentives

2. © 2016 SiriusDecisions. All Rights Reserved 2
Presenters
Steven Kellam
President
CCI | Global Channel
Management
Kathy Contreras
Research Director
Channel Marketing Services
Sirius Decisions

3. © 2016 SiriusDecisions. All Rights Reserved 3
Agenda
A Review of the Basics – MDF Best Practices
• Key considerations for MDF/co-op programs ▶ necessary fundamentals
• Defining success measurements ▶ key metrics
• How to optimize ROI ▶ program considerations and best practices
New State of Channel Incentives
• Where incentives are headed ▶ thinking beyond MDF
• A good place to start ▶ partner types/personas, partner journeys, etc.
• Keys to future success ▶ considerations and strategies for success

4. MDF/Co-op Program Best Practices

5. © 2016 SiriusDecisions. All Rights Reserved 5
Sirius Perspective: Understanding common challenges associated with MDF and co-op
programs is important to strong program development.
ROI Optimization Challenges:
• Lack of Resources. The majority of partners are small to mid-size businesses with
busy people stretched across multiple vendors and products, with limited time and
money to build effective marketing campaigns.
• Lack of Knowledge and Skill. Most partners do not have a high-level of experience
and skill at demand generation. Yet, most partners are given a portal, an instruction
manual and practically no guidance about how to make use of the marketing tools
and funding suppliers provide them.
• Complexity of Process. Clear processes with simple rules, difficulty of processing,
speed of payments (30 days or less), access to information (online status/tracking
and updates), etc.
• Lack of Incentive. Many supplier programs do not provide a clear vision of “what’s
in it for me” or a clear understanding what is required/involved for program success.
Common MDF/Co-op ROI Challenge

6. © 2016 SiriusDecisions. All Rights Reserved 6
SiriusPerspective: Provide partners with pre-packaged plays that offer very well defined
definitions of cost, duration, what’s included, estimated results, etc. for optimal results.
Prescriptive Marketing Programs: Menu-Based Plays
Play Type
Pay-Per-Click
Ads (PPC)
Ad Retargeting
Multi-Touch –
Email/TM
Social Media
Syndication
Database
Builder
Appointment
Setting
VIP
Roundtable*
MDF Cost
(Example in US
Dollars)
$500 $TBD $1,200 $TBD $2,000
$2,500/4 Appts.
$4,000/8 Appts.
$10,000
Duration 30 Days 30-45 Days 60-90 Days 60 Days 15 Days 30 or 45 Days 6 Weeks
What’s
Included
• Keyword List
Building
• AdWord
Placement
• Inbound
Support
• Biweekly
Reporting
• Web Tracking
• Customized Ad
• Landing Page
• Bi-weekly
Reporting
• Three- Touch
Email
• Video Training
• Try & Buy Offer
• Content Creation
• Content
Syndication
• Lead Reporting
• Teleservices
• Account
Mapping
• Database
Cleansing
• Database
• Teleservices
• Confirmation
• Followup
Reporting
• Venue Mgmt.
• Teleservices
• Onsite Support
• VIP Takeaway
Estimated
Results
15 MQLs 15-20 MQLs 25-30 MQLs 25-35 MQLs
300 Tele-qualified
Names
4 or 8 Onsite
Appointments
6-8 Onsite
Meetings

7. © 2016 SiriusDecisions. All Rights Reserved 7
SiriusPerspective: Consider program success definitions and measurements, think
beyond proof of performance, with the ultimate goal of closed-loop lead reporting.
• Establish KPIs. Assign standardized metrics to each activity type.
• Set Minimum ROI Requirement. Require partners to estimate the results of their activities when requesting
approval for projects and establish a minimum bar for approval.
• Tie to Reimbursement. Require that partners review and report results as part of the claiming process.
• Link to Deal Registration. To gain better visibility into activity results, position as a tool to drive deal registration.
Example Marketing Activity KPIs:
MDF/Co-op Success Definition and Measurement
ACTIVITY MINIMUM ROI METRICS ADDITIONAL METRICS
Emailing
Marketing
• Click-through rate
• Conversion rate (% that take action)
• Bounce rate (% of total emails sent that
could not be delivered)
• MQL/SAL/SQL leads generated per
campaign/event
• Registered deals per campaign/event
• Closed/won rate
• Cost per lead
• Cost per opportunity/registered deal
• Cost per closed/won
Events • Number of registrations
• Number of attendees
• Cost per attendee
Telemarketing
Campaign
• Number of calls made
• Number of meetings secured
• Response rate = # of response / sales
# of total contacts

8. © 2016 SiriusDecisions. All Rights Reserved 8
Program Goals
MDF/Co-op Program Considerations
Focus on overarching program
goals:
• Increased partner utilization
• Optimized program ROI
• Improved partner experience
• Ease of doing business with
• Speed of process
• Etc.
• Establishment of performance
reporting/ measurement
Consider compliance
requirements:
• Regulation based on funding
structure/how funds are earned
• May need to abide by
accounting, anti-trust and other
legislation
• GAAP/FASB
• Sarbanes-Oxley (SOX)
• Robinson-Patman Act
• Foreign Corrupt Practices Act
• Etc.
Apply program best practices:
• SiriusDecisions Fast Tracking
Model (e.g. partner assessments,
prescriptive-based programs, etc.)
• Leveraging the power of channel
technologies (e.g. CMM, CIM, etc.)
• Services marketplace third-party
services for partners with limited
expertise
• Future incentives expansion –
thinking beyond MDF
Compliance Best Practices
• Future incentives expansion –
thinking beyond MDF/co-op

9. The New State of Channel Incentives
Thinking Beyond MDF and Co-op Programs

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Sirius Perspective: Past performance is not an indicator of future growth; suppliers
should look beyond revenue/sales and develop incentives that drive future performance.
Channel Incentives in the Rearview Mirror
• Co-op
Funds
• MDF
Funds
• Rebates
(partner or
customer
focused)
• SPIFs
THERE ARE FAR BETTER THINGS AHEAD
THAN ANY WE LEAVE BEHIND

11. © 2016 SiriusDecisions. All Rights Reserved 11
Incentive Program Types
The Expanding Universe of Incentives
SiriusPerspective: As channel incentive programs evolve; the ideal mix of programs will
expand to include a blend of channel incentive program types.
Accrued
marketing funds*
earned through
revenue attainment
(percentage-based)
Co-op
Funds
Marketing
Development
Funds (MDF)
SPIFs
Sales
performance
incentive funds
earned by
reaching specific
sales goals
MDF
$
Points-
based
Rewards
123
Launch
Funds
Discretionary
funds* used to
seed new market
opportunities
Monetary
rebates earned
upon reaching
specific goals
or targets
Cumulative
rewards earned
through specific
behaviors or
activities
Discretionary
funds to launch
new partnerships,
drive awareness/
demand for new
offerings
Rebates
* Co-op funds are contractually accrual-based, while MDF funds can be discretionary or accrual-based (non-contractual).

12. © 2016 SiriusDecisions. All Rights Reserved 12
Incentive Reward Goal Examples*
*Consider corporate strategic goals (e.g. emerging market strategy); focus on desired growth in partner capabilities or participation in channel programs (e.g. thought leadership, social
leadership, account-based marketing (ABM), digital transformation, partner-led marketing, involvement in pilot programs, channel ambassador programs, etc.)
The Expanding Universe of Incentives
SiriusPerspective: As channel incentive programs evolve; expand the universe of rewards
to align with corporate strategic and growth goals as well as channel-specific goals.
Revenue/
Performance
Achievement
Deal
Registration
Onboarding
Velocity
Lead
Reporting
Managed
Business
Objectives
Reward for partner on-
boarding within the
desired timeframe
R
MBO
Certification/
Specialization
Achievement
Reward for reaching
predefined revenue or
performance
objectives
Reward for registering
opportunities, deals,
sales-accepted leads
Reward for partners
reaching certification/
specialization goals
Reward for closed-
loop lead reporting,
adherence to SLAs
Reward for
achievement of
specific supplier-
defined objectives
Partner
Engagement
Cloud
Transformation
Reward for partner
engagement in supplier
programs
Customer
Success
Reward for partners
achieving customer
success goals
Reward for partners
transforming to cloud
business

13. © 2016 SiriusDecisions. All Rights Reserved 13
Sirius Perspective: Establish a comprehensive incentive strategy incorporating leading
and lagging indicators of success, as well as clear goals aligned to “who” is being incented.
Channel Incentive Examples Partner Team/Group Individual
LaggingIndicator
Incentives
• Co-op Funds*
• MDF Funds*
• Revenue Achievement
• Performance Rebates*
• Volume Rebates*
• SPIFs*
✔
✔
✔
✔
✔
✔ ✔
LeadingIndicator
Incentives
• Launch Funds or Business Development Funds* (discretionary)
• Deal Registration
• Onboarding Velocity
• Certification/Specialization Achievement
• Enablement/Engagement Incentives
• MBO/KPI Incentives (Persona-based: Sales, Mktg, Tech, Support, etc.)
• Points-based Rewards* or Gamification
✔
✔
✔ ✔
✔
✔
✔
✔
✔
✔
✔
Expand Incentives to Motivate Future Success
*Incentive/funding program types

14. © 2016 SiriusDecisions. All Rights Reserved 14
Channel Incentives Strategy Considerations
SiriusPerspective: Essential for effective channel incentive programs is to start by clearly
defining the strategy by routes-to-market (partner types) and partner personas.
Partner Personas
Support Leader, Support Staff
Consulting or Services Leader, Staff
Engineering or Technical Leader, Staff
Owner, CEO, CFO or President
VP of Sales, Sales Management, Staff
Marketing Management, Staff
EXEC
TECH
SALES
PROFSVCS
MKTG
SUPPORT
Partner Type
Service Provider
Strategic Alliance
OEM
ISV
System Integrator
VAR/Solution Provider
DMR/Retailer
Distributor/Aggregator
Agent/Broker
Referral Partner

15. © 2016 SiriusDecisions. All Rights Reserved 15
Service Provider
MSP
Alliance
OEM
ISV
System Integrator
VAR / Solution Provider
DMR / Retailer
Distributor / Aggregator
Referral Partner
SiriusPerspective: With each partner type, there are different sets of personas to consider
in managing the partner relationship; establish incentive strategy for key partner personas.
Channel Incentives Strategy Considerations
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech* MktgSales Support
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech* MktgSales Support
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech* MktgSales Support
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech MktgSales Support
Exec Prof SvcsTech MktgSales Support

16. © 2016 SiriusDecisions. All Rights Reserved 16
SiriusDecisions Partner Journey Stages
Channel Incentives Strategy Considerations
SiriusPerspective: Essential for an effective channel incentive strategy is to consider
incentives aimed both at the progression and velocity within the partner journey stages.
OFFER QUALIFICATION COMMITMENT
INVESTMENT &
ENABLEMENT
PRODUCTIVITY
EXEC
TECH
SALES
PROFSVCS
MKTG
SUPPORT
PARTNER
Examples:
• Onboarding Velocity
• Certification/Specialization Achievement
• Partner Engagement/Participation in Programs
and Events
• Business Planning/QBRs
• Performance/Revenue Achievement
Evaluate what incentives can be established for the
partner as a business or for the key individual
personas within each stage to successfully progress
them to the next stage.

17. © 2016 SiriusDecisions. All Rights Reserved 17
Channel Incentives Strategy Considerations
SiriusPerspective: Future incentive strategies structure aligned to partner’s pre-and post-
sales customer experiences; establish appropriate partner and persona incentives.
SiriusDecisions Buyer’s Journey SiriusDecisions Customer Lifecycle
Pre-Sales Efforts (Buyer’s Journey) Post-Sales Efforts (Customer Lifecycle)
Education Solution Selection Deliver Develop Retain Grow
Examples:
• Social Thought Leadership
• Supplier Demand Creation Programs
• Partner-led Lead Generation Campaigns
• Lead Development/Lead Maturation
• Deal Registration/Opportunity Management
• Revenue Generation
Examples:
• Customer Engagement
• Customer Marketing
• Customer Experience
• Customer Revenue (upsell/cross-sell/renewals)
• Customer Advocacy
• Customer Loyalty
EXEC
TECH
SALES
PROFSVCS
MKTG
SUPPORT
PARTNER

18. © 2016 SiriusDecisions. All Rights Reserved 18
Strategy for Future Success: Key Takeaways
• Optimize MDF and co-op programs by leveraging best practices for
optimal program utilization, ROI and for the ideal partner experience
• Establish a comprehensive incentive strategy incorporating leading
and lagging indicators of success
• Lagging indicator incentives: Recognition for partner achievement/success
• Leading indicator incentives: Reward to motivate desired partner behavior
• Channel incentive programs should maintain an optimal mix of
incentive program types and incentive rewards aligned to corporate
and channel goals
• Essential for effective incentive programs includes defining the
strategy by partner type, partner persona, partner journey stage,
pre- and post-sales efforts

19. © 2016 SiriusDecisions. All Rights Reserved 19
Q & A
Steven Kellam
@CCIChannels
www.linkedin.com/in/stkellam
Kathy Contreras
@KWContreras
www.linkedin.com/in/kathyf1

20. Thank You!