Use it or Lose it!

Made Essential Reading on 26 March 2010 Lee Lomas

Throughout a large chunk of my formative years this was a loud command commonly heard from a referee on a rugby field – the state of play had reached a certain point and you, as the attacking side, had to make use of the ball or the ref would be obliged to blow up and give a scrum to the opposition; you would lose possession of the ball. Nowadays it has come to mean something very different to me. I now ‘play’ in the IT marketing channel and the cry of ‘Use it or lose it!’ applies just as much but the ‘it’ is no longer a ball but hard cash.

In the IT Channel some distributors and resellers can accrue co-op and MDF funds over and above their standard selling margin. These funds are earned as a proportion of their sales (perhaps 1% or 2% of sales revenue) and must be used for qualifying marketing activity. The hope being that the more you sell, the more the vendor will contribute to your marketing thereby helping you sell more and so on in a virtuous circle. Easy right? Not so. The reality is that getting campaigns approved and paid for by the vendors can be a major headache and, as the funds are time limited, the campaigns must be approved and completed within a given timeframe or you lose them.

The more vendors you partner with, the more co-op schemes you’ll have to try and manage. No two schemes are alike and many involve the use of complex forms, online systems and a drawn out approval process. Add to this the issue of exchange rate variations (some vendors pay in $US or Euros) and the fact that once you have had a campaign request approved and completed it, you still need close the loop and provide evidence in order to ensure you get paid.

This complexity leads many companies to struggle managing the process and subsequently funds are not used and therefore are lost. This is a criminal waste. Just like the rugby ball, the most important part of the marketing game – the funds to do something – is in your possession. Do not lose it for the sake of making a positive move.

So what do you need to be clear on?

It all starts with the guidelines. You will need to fully audit all of the vendor programmes that apply to your business. Fully understand the guidelines and the types of activity that will qualify for funding, how to request funding and obtain approvals. These will vary from company to company.

You must also know when and how to claim the funds back – where to send your invoices, what currency to use, what reference numbers to quote and what evidence you will need to provide.

It is complicated and time consuming and, if you are tight on resource, it may seem like too much hassle – but don’t forget the funds are yours. You have earned them through your hard work and sales and they can help to grow your business. If you don’t feel like you can handle the process without help then seek out an external company to help you. When you find a company you can trust and work with to manage this process and deliver campaigns that vendors are prepared to fund they will more than pay for themselves.

In rugby terms you have secured the ball. It is time to make the positive move – use it or lose it!