As a business owner in the technology space, you’re almost certainly familiar with the concept of “Co-Funding” for marketing efforts.
Just in case you’re not, here’s a quick summary:
- Your business is either selling or incorporating products from larger technology Vendors – such as Microsoft, Cisco, IBM, Veeam, Fortinet, Telstra, NBN, Google and dozens of others – into the products and services you create for and sell to, your customers.
- These Vendors know that their technology is likely only one of several that you utilise, and obviously, they prefer that you sold more of the particular services that incorporate their technology specifically!
- They understand that you have limited capacity and funds to spread across everything that you do so, to help you out, they offer up some cash for you temporarily increase your capacity to do marketing of those services.
You win, they win, everyone’s happy! Or are they?!
The different approaches to co-funded marketing
Some Vendors, such as Microsoft and IBM constantly evolve and improve the support and assessment methodology through which they partner on marketing efforts. This is a boon for partners that have little to no dedicated in-house marketing and rely on 3rd party providers. You jump through some hoops to secure funding, but you’re protected from yourself in the process – you’re less likely to waste funds as you’ve demonstrated some pre-thinking.
Vendors sometimes adopt a “give-you-the-money-and-leave-you-to-it” approach. This works well for partners that have a mature marketing apparatus in place, or a long-established strategically-led partnership with a 3rd party marketing provider.
Some Vendors don’t seem to have any properly established program of support for their partners’ marketing efforts… all I can say is that there are reasons that Microsoft has experienced the resurgence and massive cross-solution growth that makes it the world’s most valuable company – certainly the most valuable in the B2B technology space – and that is in part due to the time they invest into partners…
Free money? What’s the catch?!
Often people get very excited by co-funding, and why not? You work so hard for every dollar you earn that sometimes it’s nice to have some drop into your lap! But of course, this is not quite the case – Vendors that give you money expect you to work for it, and fairly so!
Assume a Vendor is suggesting a $30k cofounded campaign with the aim of generating increased sales of their technology. For clarity, that is $15k from you, $15k from them. Here are some of the ways you will have to work for your money.
- Messaging, Strategy and Commercials – you will need to show that you have messaging/ an idea worth backing, what your strategy is for achieving success, and exactly how the cost breaks down. If you’ve not done this much before, it can be a lot of work to do properly. Sure you can bodge something together, but that will reduce your chance of success and increase the probability that the Vendor avoids partnering with you in the future.
- Asset Creation – building marketing assets such as blogs, videos, case studies, product brochures, telemarketing scripts, event collateral and lists, are time-intensive, cross-departmental, collaborative efforts that suck multiple people away from their day-to-day work and that can be hard to get agreement on. Even with 3rd party assistance, you have to take this time-cost into account. Most business owners of SMEs cannot quite let go of signing off this type of work, so they end up more involved than they expected. If you’re at capacity, consider holding out for the next round of funds.
- Long term commitment – assume you generate interest from your co-funded efforts within the first 3 months. What do you do now? In all likelihood you have a longer time-to-sale than the period over which you are being funded by the Vendor. How are you going to nurture these prospects considering that some of them may not be ready to buy for another 12 months? If you want sustainable growth over the long term, you will need to invest in marketing over a longer timeframe. If you don’t, hard-won opportunities are going to disappear off your radar and money you’ve spent will have been wasted.
So how can you make a success of it?
The same way you’ve gotten where you have already – by knowing that there’s no such thing as a free lunch – you’ve got a great opportunity, but you’ll need to work for it or invest in people/ partners to do the work for you. There’s no way around it.
The reality is that most business owners forget that sometimes there might be far more lucrative ways for them to spend their time and money in the short term than chasing after Vendor co-funded dollars. Don’t let a bit of Gold Fever distract you too much!
But let’s assume it’s the right time for you to do something, here are some tips:
- Secure a Marketing Partner – unless you have a massive in-house marketing operation, you will need outside help. There’s no way around this. Our advice -remember that it’s you that needs to work with that Marketing organisation, so you need to be the one to make the decision on who that organisation is – not the Vendor. Most Vendors understand this. Some Vendors will try and force a marketing partner on you. It can be a recipe for disaster – push back where appropriate.
- Market your services, not the Vendor’s – unless you’re happy to be an advertising wing of the technology Vendor, or unless there are specific reasons to do otherwise, then you need to remember that the funds are there to grow your business and consequently, the Vendor’s business. Not the other way around. Make your business unique – customers can get the Vendor’s technology from thousands of other Partners if you don’t.
- Know how to find your target – know exactly who you’re targeting and how to find them. It’s very easy to say “I’m targeting people that want XYZ Tech”, but unless you can articulate what a person who wants XYZ Tech actually looks like, or what searchable behaviours/ traits they exhibit, then you’re going to come unstuck.
- Allocate budget to nurture – even if the life of the co-funded campaign is set at 3 months, that doesn’t mean you cannot allocate some of your own budgets, or even carefully selected components of the campaign budget, towards activity that will happen in months 4,5 and 6. This is where an experienced technology marketing partner like Mogrify is worth its weight in gold – your partner should have experience working other programs like this across multiple Vendors, they’ll know the Partner Managers and can work with them to make sure the budget works effectively for you over a sensible timeframe, but within the constraints that the budget is allocated.
- Think holistic – rarely does one marketing tactic work in isolation, and if it does, it’s only a matter of time before everyone’s doing it and it stops working as effectively. Check out our blog on this topic and think about utilising several methods in parallel.
- Remember that successful marketing is a probability game – if someone says “give me $10k and I’ll give you $20k back” beware! Marketing is like building a technology platform – you hypothesize, build, test, pivot, refine, repeat until you have something that is working for you. If you stop spending, the system decays. Cash is not wasted if you fail but learn something critical in the process. An experienced marketing partner will reduce the frequency of failure, but they’ll still misfire sometimes. Make sure they understand what “Validated Learning” is. Take a look at this blog on Marketing ROI.
What now?
Whether you’ve done co-funded marketing before and thought it could go better, or whether you’ve never dipped your toe, then please reach out to us to see if we can throw an idea or two your way.
We guarantee you now, we can!
Most people fail at marketing not because they’re not across the latest psychological theory on selling, but because they don’t have fundamental marketing structures in place in their business. They think “Marketing” = “Google Ads & Facebook”. It’s not!
Complete our 3-minute Quick Marketing Assessment and find out where you stand with your strategy. You’ll get a bespoke report giving you a very high-level picture of where you could focus your marketing efforts.
