Co-Op/MDF Whitepaper by Computer Market Research

COMPUTERMARKETRESEARCH™

Automated Co-Op and Market Development Fund SolutionsBest-of-Breed Capabilities to Consider when Evaluating Co-Op/MDF Vendors and Solutions

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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



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



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.



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



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.



• 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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Co-Op/MDF Whitepaper by Computer Market Research