• Simplified, effective budgeting can be achieved when the right tools power your channel program.
  • Key budgeting metrics include all things ROI and pipeline, as well as partner engagement metrics, top-line growth, and behaviors that align with overall goals.
  • Categorizing channel budget spend varies significantly from company to company depending on size and goals, but channel leaders can define those categories with detailed specificity.
  • As live events re-enter budgeting in earnest in 2022 (assuming the pandemic subsides as forecasted), companies that have developed strong digital marketing and publicity chops will continue maintaining those activities.
  • Building room for unforeseen opportunities into channel budgets can help you compete dynamically throughout the year.
  • Channel experts use quarterly reviews as checks on budgeting and to fine-tune spending allocation through the remainder of the year.

The fourth quarter is often a mixed bag. On one hand, you have holidays, family, and all the other things that make life – and your hard work all year – worthwhile. On the other hand, you have a mad scramble to hit numbers for the current year and the most tedious of year-end tasks: budgeting for the next.

Marié SteylFortunately, channel budgeting doesn’t have to be painful. In the words of Marié Steyl from IPFusion, it can be as easy as a “6 step process… Who, What, Where, When, Why & How.” By defining the stakeholders in your budget, doubling down on what’s working, and taking pointers from leading channel experts, you can develop a channel budget that:

Our Channel Budgeting and Marketing Brain Trust

To help you with your budgeting for 2022, we interviewed eleven channel marketing pros to provide some tips to help you along the way, including advisers to many channel companies and proven leaders inside companies with successful channel operations today.

Adviser Experts – These gurus advise many channel players on channel marketing and strategy:

Operator Experts – Channel marketing and budgeting experts with leadership roles in companies with thriving channel programs: 

First Things First: Tools Matter

As with most things in business, you’ll want to keep doing – or even double-down on – what’s already working. That means you must first find out what fits into this category. To know that, you need the right tools. Those include:

  • A solid partner relationship management (PRM) platform
  • A robust partner enablement framework
  • A regular partner communications plan
  • Dashboards to measure all of it

Heather TenutoThe right tool can centralize all this activity, simplifying your job and making it easy to focus on partner and program development. “Your PRM should do the heavy lifting in recruitment, enablement, communications and reporting,” says Zift’s Tenuto. “The less time you spend buried in spreadsheets and disparate sources of information, the more time you can spend building your channel program and nurturing partners to drive revenue.”

The Most Crucial Channel Budgeting Metrics

The beauty of a metric is in the eye of the beholder – just ask any channel executive that’s gone a round or two with the C-suite. Still, there’s value in knowing which metrics experts rely on the most for their budgeting. So, we asked our brain trust which metrics are the most crucial. Here’s what they said:

Anything with a proven return on investment (ROI) is a slam dunk

Khali Henderson“Anchor next year’s budgets in this year’s successes,” says BuzzTheory’s Henderson. “Anything with obvious or proven ROI should be at the very top of your budgeting list. It’ll make your forecasting easier and more accurate and will make the entire C-suite more comfortable with your plans for the new year – even if those plans include some softer marketing goals like improved brand awareness in the channel.”

Ribbon’s Macario agrees. “ROI is the primary metric – what revenue are marketing programs generating?” he says. “Aside from that, we measure standard marketing metrics at a campaign and regional level to allocate budget globally.”

Earlewine from IntelePeer also stresses ROI, along with top-line objectives such as with what products, geographies, or partners you expect to find growth. “ROI on past spend [and] company growth goals,” he says.

Partner engagement and revenue metrics

David PortnowitzSangoma’s Portnowitz further stresses measuring ROI, but he focuses heavily on partner engagement and overall revenues. He says the “top three metrics that are most crucial [are]:

  1. Partner engagement. We track partner activity and look at how engaged our partners are. How active are they in the channel? Are they selling our product?
  2. ROI on investment from MDF and co-op dollars. What is our investment going in, and how do we measure that from the back end?
  3. Revenue goals. That may sound generic, but I think if we’re meeting revenue goals, then everything else falls into place.”

All things pipeline

Karen Newnam

“Marketing sourced pipeline is the most important,” says Nutanix’s Newnam. “We want to be able to show the direct impact of our efforts. We track from prospect to MQL [marketing qualified leads] to deal reg to close. The greatest success measure for us is marketing sourced, channel-initiated pipeline.”

OpenText’s Schulze says: “Most crucial: sales based on expected bookings, MQLs and closed pipeline. Not just on a product-by-product basis, but really on the type of behavior that most aligns with our company goals. If there are regions we’re trying to reach, we’ll put growth marketing funding behind them.”

Paul MoraMora from Motorola Services also leads with pipeline metrics. “Incremental pipeline, influenced pipeline, and channel amplification and enablement metrics” are tops, he says.

7 Channel Budget Planning Tips for 2022

1. Start with the Budget from the Year Before

“We always start with what we spent last year,” says Sangoma’s Portnowitz. “We look at it, break down the categories of spending, and think about events that worked or didn’t work. Then, we’re looking at what we need from a content standpoint. Do we need an agency? Do we not need an agency? What type of support do we need from a third party? Our steps aren’t secret. It’s pretty much just digging into the data and making decisions from there.”

Brent EarlewineIntelePeer’s Earlewine also starts with an analysis of the previous year’s performance. “[We lead with an] ROI review on previous year’s budget … plus evaluation of tools, third-party vendor solutions (like portal vendor) and channel-specific event sponsorships and demand-generation activities,” he says. “[We also perform] leadership review against proposed budget against strategic plans for channel coverage and expansion, strategic partners, partner performance, growing partners/declining partners, etc.”

Julie GarciaKnowing where your program has been makes it easier to predict future spend. Julie Garcia, Zscaler, says that, “[w]e align our budget with the expected growth we are targeting. We look at all contributing functions to align investments with % of growth responsibility paired with impact potential.”

2. Double Down on Past Successes

ROI – unsurprisingly – is the most essential budgeting metric (see the metrics list above). Doubling down on ROI-generating activities should be a big part of your budgeting process – not just to maintain success but to guide future investments as well.

John Macario“For repeat requests (conferences, campaigns, etc. that we have done in the past), we make decisions based on the previous year’s ROI,” says Ribbon’s Macario. “For new initiatives, we use historical marketing metrics to estimate the number of leads and opportunities that would be created. Then, we work with the local sales leaders to tie those metrics to expected revenue.”

3. Target Spend Strategically with Segmentation

“The challenge with planning a channel marketing budget is that sometimes we’re a small fish in a big pond,” says OpenText’s Schulze. “We have to focus on being targeted and relevant, which is the guidance that I’m continuously giving my team. Outside of this, I’m also telling my team to be masters of their own channel. Their job is not to have sales tell them what to do. Their job is to listen and develop a thoughtful and targeted marketing plan.”

Jennifer SchulzeSchulze adds, “Ultimately, we have to balance what we want to achieve with our partners and then what we want to achieve as a whole organization through strategic marketing.”

Schulze says the individual steps include:

  1. Looking at past bookings and market growth
  2. Ensuring alignment with sales
  3. Choosing one-to-many activities
  4. Assigning MDF for partners in the one-to-few model

In terms of segmentation, Schulze starts at the Segment level and works inward on a partner-specific basis. “We look at segments by gathering external data [from] distribution, VAR, MSP direct, global service integrators, etc. From there, we see who are partners we want to be working with and who we’ve worked with well in the past. We go to past bookings, then assign MDF from there. MDF funds are aligned on a partner-by-partner basis. This is for every single segment of ours.

 “In some cases, those activities help educate sellers,” Schulze says. “In other cases, we want to market to end-users who will influence partners. Our partners are our customers since we’re 100 percent channel.”

Nutanix’s Newnam also stresses the importance of segmentation based on historical contribution and big bets. “Planning involves many considerations,” she says. “First, we allocate the budget to channel segments (managed/emerging, broad channel/target and nationals) based on QoQ [quarter over quarter] contribution to our overall revenue number. We then factor in our overall MQL, SAL [sales accepted lead] and pipeline goals for each quarter.” 

Once Newnam has budgeted by segment, “the segment leaders do the same factoring in individual f partner business plans/goals. At this point, we round out the picture with pipeline gains from channel scale programs, multipartner initiative investments and participation in Nutanix-funded one-to-many initiatives.”

Sangoma’s Portnowitz says his company backs into categorization through a revenue plan. “We start with a revenue plan,” he says. “We have to work backward from there. We want to look at what the company is hoping to achieve revenue-wise and what portion of that needs to come from which channel.  Does it come from distributors, master agents, wholesale?

“We’re looking at how we enable our partners to sell and hit their goals, as well as how we enable salespeople to make sure that they have the right content to go out with their partners and co-sell.”

IntelePeer’s Earlewine categorizes both horizontally and vertically. His list includes:

  • company level
  • program level
  • strategic partner level (top 20 percent of partners by revenue)
  • partner industry events
  • partner-specific events
  • demand generation

4. Consult with Sales Stakeholders

Macario from Ribbon Communications gathers input from sales stakeholders when planning budgets. “We work closely with our sales teams around the world to understand their needs and priorities for the coming year,” he says. “Some general themes emerge and also some specific regional needs. The enterprise and channel marketing team pulls together a plan and budget which strives to balance the needs of established markets with those of emerging ones.”

He also involves leadership throughout the process and emphasizes sales and marketing alignment. “Leadership is involved from the beginning,” Marcario says. “We start with our head of sales for Americas, EMEA and APAC to understand where they would like to see revenue growth — countries, vertical markets, behavior-based segments, etc. Our job is to build a plan to help them meet their goals.  In our organization, sales and marketing are joined at the hip from the very start.”

Mora from Motorola Solutions also focuses on sales and marketing alignment. “[We are] looking for full alignment of marketing plans with sales priorities and goals for the new year,” he says.

Cesena at Dropbox backs this up, saying that she “work[s] with channel sales teams on channel strategies for the year and then brainstorm new activities with costs as well as decide what current activities we keep in the coming year. Channel Marketing and Sales work very closely together for tight alignment on the activities.”

5. Build in Room for Unexpected Opportunities

“Opportunities don’t line up neatly by the fourth quarter, so you can plan for everything you need the following year,” says Zift’s Tenuto. “New opportunities come along throughout the year. Build some wiggle room into your budget in advance so you can capitalize on those opportunities without having to bend budgets or seek new spending approval.”

How much padding do you need? “If you don’t have a track record of how much extra budget you’ll need, use the 80/20 rule. But strategically speaking, you don’t want to box yourself into only the opportunities you can see right now. You want to be nimble and responsive when the time is right.”

6. Plan for the Return of Events in 2022

Live events already are starting to creep back into mainstream channel activities. Some companies are penciling them into their budgets. “Companies that successfully navigated channel recruitment and enablement without live events will continue to use their expanded digital marketing and publicity powers as the live event circuit comes back to life,” says BuzzTheory’s Henderson. “It’s not a matter of either/or, or of returning to pre-pandemic norms. It’s a matter of ‘also.’ The channel winners of tomorrow will be running on all cylinders – digital, publicity and live events.”

For some companies, the return to events means evaluating the scope of that participation, particularly when collaborating with partners to target regions or industry verticals. Portnowitz says Sangoma is one of them.

“Historically, we used to spend a lot of money on events by looking at how we want to attract new channel partners, where we want to be to meet partners, and how we want to find them,” he says. “Obviously, we aren’t doing as many events this year, and that’s not unique to us. As we look into 2022, we’re cautiously optimistic that there will be more events. One thing we’re hoping to focus on in the next 12 months is hosting more of our own events and doing co-branded events with our partners to attract customers. That’s probably where we’ll invest more dollars, so having fewer dollars going to traditional, larger-scale events. We’re focused on the customer side.”

7. Review Your Budgets Quarterly

“We do a full budget review during [the] end of Q3/beginning of Q4,” says Earlewine. “This includes a look at overall channel budget, as well as deep-dive reviews on items such as MDF ROI and maps against our strategic channel plans for the upcoming year.”

Newnam from Nutanix also performs quarterly reviews. “We look at historical data that shows effectiveness QoQ and also consider partner propensity for success across activities,” she says.