The global heating, ventilation, and air conditioning (HVAC) market is predicted to grow at 5.9% between 2020 and 2030 across residential, commercial, and industrial. *With this growth comes challenges: brand engagement and limited skill alignment are some of these. Ensuring loyal and knowledgeable partners is crucial in this market: where end customers want advanced smart technology, energy efficient solutions, and resolution immediacy service if systems fail. HVAC companies have no option but to go all out in improving both the promotion and efficiency of their operations to fulfil and capitalize on these challenges and demands.
In this blog, we take a look at how MDF/BDF/Co-Op programs can support the HVAC market.
How HVAC businesses can utilize MDF/BDF/Co-Op programs
Several HVAC suppliers are turning to the provision and facilitation of Marketing/ Business Development Funds – MDF/BDF/Co-Op to support their advisory, sell-through and implementation dealers/distributors: to enhance engagement to promote their products and develop mutually beneficial business.
MDF/BDF/Co-Op as a partner/dealer support driver is a recognized channel incentive offering. 83% of brand/trade marketing and sales teams credit fund programs with having an impact to annual sales. * However, the key is how to implement and operate a promotional fund program for best co-working that aligns and engages partners behind one vendor brand Vs a competitor and delivers on business requirements.
Far too often we have seen brands fail at achieving full mindshare with their channel and even worse - in some cases – inadvertently discourage sales of their solutions in favor of competitors: purely down to the fact that their fund program is hard to understand, hard to administrate and hard to claim and get paid on!
Irrespective of whether businesses are running an accrual earned individual dealer/distributor Co-Op program or a more theatre/business unit based MDF proposal approved program: a successful fund program needs to steer clear of disengaging pitfalls and drive the right behaviors for success.
With the right design features, rules, and operational implementation; HVAC organizations can serve up a program that provides them with a competitive edge in this growth marketplace.
Think externally not internally…
It is often easy to get too caught up in structuring an MDF/BDM/Co-Op program around internal provisions. Yes, these programs notoriously need to be robust across internal territory budgets, finance control and compliance: however, they also need to be easy to understand and operate by the recipients of the funds. Consider these 5 ‘Competitive Edge’ Pointers for MDF/BDF/Co-Op:
- More Automation Many fund programs kick-start across spreadsheets and emails. However, as they develop across increased numbers – partners, dealers, regions, multi-claims - they get harder to manage across multiple documents becoming labor tiresome to HVAC marketing teams and providing a window for claim and payment error. These mistakes upset business partners and can impact the choice to work with one brand Vs another. HVAC companies can look to automate a lot of these operations for more seamless working and opex/labor time savings.
- Real Objective Alignment Sales playbooks exist for direct sales teams and this approach should be taken across to partners by ensuring fund qualifying criteria are behavior based. HVAC companies who align a solid objectives plan to their MDF/BDM/Co-Op programs to drive proper behaviors like lead generation, true prospect networking rather than branded merchandise and social events will affect real business activity.
- Easy User Experience Maybe an obvious one... but it is important to ensure fund programs are offered out to partners in a concise and manageable format. Digital portals are the way forward, but these should be clear in mechanics: with easy-to-follow rules/registration/claim/proof of activity and payment transfer disciplines.
- Smooth Claim, Fund and Payment Cycle Best partner engagement will only be realized if the fund program has an efficient activity claim process and history status > to proof of performance > completion > payment authorization - with clear visibility across all stages for both brand vendor admin and partner participants. And of course, final payments to nominated accounts and currencies need to be swift! HVAC companies can implement specialist technology to enable smooth workflows for these functions: in fact, these are critical to partner utilization of funds to promote vendors capabilities, solutions and ultimately drive best business and ROI. Simply shifting to a digital claim experience with your MDF/BDF/Co-Op activities – away from multi-folder documents to consolidated, audit trackable consolidation will ease time management for vendors and partners alike.
- Full Reporting Introducing more centralized and automated program capabilities can provide HVAC vendors with thorough and holistic reporting. Available for company administration, partner participation and fund usage assessment to enable improved program management, enhancements, and business impact/ROI.
A final note… In addition to these 5 pointers - which could give HVAC brands a competitive edge in the market - naturally there are other factors (external and internal) to think about with MDF/BDF/Co-Op programs to ensure optimum effectiveness. 360insights is a market leader in implementing MDF/BDM/Co-Op programs to increase revenue within HVAC business.