A key challenge in developing a successful channel program is to anticipate the economic impact of implementing one element versus another. Bear in mind, there’s never enough money to test every element. Determining the evaluation factors of channel programs will become the input variables for conjoint or logit modeling of your channel program. Use of a rigorous statistical analysis will provide you with data to make the hard choices. It will provide evidence to share with channel partners who challenge your choices. (For more information on enabling your channel partners, please see Improving Alliance Marketing on the Crimson Consulting website.) By using analytics, you will also help build confidence with your CFO as you deal with the usual internal budget wrangling. Specific benefits of program modeling include:

• Identifying innovative program elements
• Determining the value of each program element
• Implementing smarter cuts in program costs
• Deploying the best program elements to maximize channel revenue
• Providing the evidence you need to sell changes to your organization
• Strengthening your channel relationships

The ability to value nuances is a big benefit of conjoint or logit modeling. When managing a multi-million dollar channel program budget, the cost of changes is often understood—but the cost of revenue lost is overlooked. It’s in your best interest to incur a minor cost for the research; this is a drop in the bucket compared to the high cost of implementing the wrong program elements. Analytical modeling provides you with a cost-effective way to make better decisions, reduce the price of your channel programs, and maximize revenue.

Modeling also enables economic simulations that may not be obvious to your team or they may not appear in qualitative surveys. Results can reveal cost saving measures by eliminating elements that are expensive or generate a miniscule return. You will be able to justify program designs and changes by using objective analysis. Modeling will help you maximize return on the program investment based on your strategic alternatives. As an added plus, it can also simulate competitive responses.

How do you model your channel programs before you execute and what is working well for you?