When Best Practices Don’t Yield Optimal Results: Channel Marketing Challenges

March 8th, 2013

Recently we've been talking a lot about the importance of well-defined and documented processes to support demand generation. If you've been following, we've shared the findings of a recent Forrester report on lead-to-revenue management and carried those concepts forward in our February webinar. A big takeaway from both the report and the presentation is that organizations need to reconsider the funnel metaphor as it applies to the revenue growth process.

Putting more in at the top of the funnel does not necessarily lead to increased revenue. Marketers are finding that the buyer-controlled sales journey does not follow a direct and predictable path and that the key to growth is lead-to-revenue management: identifying one optimized process and then repeating that process for every prospective buyer. What does that have to do with channels specifically? Well, this is where we found an interesting development.

In a recent Forrester report, B2B Marketing Tactics And Results: Channel Oriented Versus Direct, analyst Tim Harmon compared the approach of companies that market to channels with the approach of companies operating in a direct marketing model. Companies that market through channels give up some control over the ultimate processes that direct their marketing. Furthermore, they can be at a disadvantage as their channel partners often have other products and services to market, which may consume a greater share of the channel’s resources.

In its report, Forrester found that channel GTM (go-to-market) marketers were more likely than direct marketers to have defined and documented processes in nearly every category of demand generation activity. For example, channel-oriented marketers were 14 percentage points above direct-oriented marketers in campaign planning and 17 percentage points higher in lead scoring. Channel GTM marketers were also more comprehensive in their efforts to measure marketing performance, consistently using a broader range of metrics when evaluating the health of their programs. Channel-oriented decision makers were more likely to use metrics in effectiveness, efficiency, value, and velocity.

Given this level of discipline and what we already know about the results mature marketing organizations are achieving through effective lead-to-revenue management processes, we expected the second half of the report to reveal that channel GTM companies enjoy higher levels of lead conversion and a greater percentage of closed leads.

Instead, data presented in the report indicates the opposite. Direct marketing organizations surpass channels in every key benchmark of lead conversion. They enjoy a greater percentage of conversion starting with the conversion of website visitors to leads and carrying through the conversion of inbound leads to marketing qualified leads, to sales qualified leads, to appointments, to opportunities, and to closed deals. Most notably, direct-oriented marketers outperformed channel-oriented marketers in sales-qualified leads by 10 percentage points, sales accepted leads by 14 percentage points, and sales opportunities by 9 percentage points.

How are companies that follow the best practices required to convert more leads to revenue failing to achieve at the same levels as less disciplined marketers? For channel GTM marketers, the lack of control at the ultimate level of engagement with the buyer presents a critical challenge. Getting process rigor to filter down through affiliate networks is tough. But, if your organization is dependent on channels to take your solution to market, there are ways to bring best practices to your channel partners.

Tom Harmon at Forrester provides a few recommendations that make sense to us.

  • Provide a through-partner marketing automation tool to allow for campaign collaboration and shared dashboards
  • Integrate the corporate marketing system, the partner portal and partner relationship management system to improve governance, and
  • Work to increase the frequency and quality of communication with channel partners through more robust portals and the use of social media communication tools

For more information on the recommendations above and additional best practices, visit our page on empowering your channel partners.