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Do you know your MDF from your ISV? It can be hard to keep track of the latest channel marketing terms and acronyms, but doing so is crucial for success.
This A-Z channel jargon buster is designed to be an essential reference for anyone new to navigating the world of channel marketing (or anyone who wants a quick refresher!)
We’ve been helping technology companies with channel marketing for over 20 years and are constantly coming across new jargon so if you spot something we’ve missed please let us know and we’ll add it in for you.
We’ll even credit the addition to you if you provide us with your name.
A-C
ABM
ABM = Account Based Marketing. This is a strategy used to target specific accounts within your market. When you use ABM, you will be creating a tailor-made marketing plan for each prospect or ‘account’ you want to sell to.
Account
In channel marketing, the term account is typically used to refer to a target end-user company.
Account Mapping
This is a process where a channel partner will work with a vendor to map a list of target accounts before starting a campaign. The channel partner typically provides the list of target accounts, which can include customers and prospects, and the vendor will map these against their CRM to identify accounts that already have existing deals in progress with another partner. This ensures the channel partner doesn’t waste effort targeting accounts covered under deal protection. It also helps the vendor identify new logos on its target list that may be existing customers of the channel partner offering a potentially easier way into that account.
AIDC
AIDC stands for Automatic Identification and Data Capture. A sector which includes technologies that automatically identify things, gather data and send it straight into computers without needing people to type it in.
B2B
Business-to-Business or B2B, refers to actions between one business and another, while ‘B2C’ is used to describe businesses selling directly to consumers.
Buzz Days™
A Buzz Day™ is a dedicated day run with a channel partner with the key objective of developing pipeline and/or closing deals. It is typically run by a vendor either directly or indirectly in conjunction with a distributor. Buzz Days are most effective with proper planning in advance. This ensures the partner can map their target accounts with the vendor, the sales team can have some training on the product and the marketing team can warm up the target accounts with a campaign.
Campaign in a box (CIAB)
A campaign that has typically been put together by a vendor for use by its channel partners. Everything for the campaign is bundled up to include all the campaign assets needed to run it successfully. It often includes a campaign overview outlining the ideal customer profile and how to execute the campaign, sales scripts, email copy, social media post copy, images, and supporting assets such as PDF downloads.
Channel
‘Channel’ is an umbrella term for companies involved in a typically two-tier sales model where a vendor sells its products or services via partners who buy those products or services via a distributor. This can include vendors, distributors, resellers, independent software vendors (ISVs) and system integrators (SIs).
Channel Data Management (CDM)
A CDM combines channel Partner data from various touchpoints, allowing vendors to make clear data-driven decisions.
Channel Incentive(s)
Incentives are programmes that offer rewards to channel partners. They are used to encourage the right behaviours and achieve specific sales goals or objectives. They can also be used to drive sales enablement, technical enablement and certifications. Typically, they are run by vendors either to their distribution partners and/or channel partners or by distribution directly with their resellers.
Channel Incentive Programme(s)
Whereas an incentive might run for a short period of time, a channel incentive programme will typically be a year-long initiative or longer. Typically, companies use incentive programmes proactively to build and maintain brand loyalty while shorter, stand-alone incentives are usually reactive, driven by a desire to influence a behaviour or activity in a certain time period.
Channel Incentive Platform
A tool that streamlines the management of Channel Incentives. It enables participants to easily register, log in and track their progress throughout the incentive period. With a clear view of their status, participants are more motivated to accomplish tasks, sign up for more opportunities and compete with others. Team leaders can also use the platform to gauge participation and the success of the incentive.
Channel marketing
For example, a vendor, who sells a product might create a channel marketing plan to let the market know that one of its products is being discontinued (often referred to as being made End of Life or EOL).
If it sells through distribution, it may do this by running a marketing campaign to its distributors with one set of messaging clearly stating the product(s) that is being discontinued. It would also include its SKU, the date it will be discontinued, and the upgrade path with details of upgrade model(s) and their SKU(s). As well as messaging around how the distributor can help its resellers encourage their end-user customers to upgrade and any training and support that might be beneficial.
The vendor would also promote the opportunity this presents to the distributor such as increased sales, the opportunity to provide value-added services such as financial services etc.
The vendor will often create a separate campaign with slightly different messaging to go out to its channel partners who buy indirectly via distribution (and those who buy direct, if the vendor sells both direct to partner as well). This is likely to include specific messaging for the reseller around the opportunity the upgrade provides, typically new revenue from the product upgrade sales.
The vendor is also likely to create a separate campaign for use by its resellers (possibly a Campaign in a Box) to help them communicate the EOL message to their existing end-user customers of the product and explain the timelines for end-of-support and the benefits of upgrading to the latest product.
The important thing to ensure when creating a channel marketing campaign is ensuring that the messaging is aligned with the target audience. If you are promoting a new product to a distributor or reseller you need to focus on the opportunity and benefits this brings them and not the benefits to the end user!
Channel Partner(s)
A term to denote the relationship between vendors and their partners, typically this includes resellers, SIs, alliance partners, VARs and ISVs.
CIPM
Channel Incentive Programme Management is the name given to the process of actively managing incentive programmes. Incentive programmes are typically used by vendors to incentivise the creation of pipeline and sales through their distributors and/or channel partners.
Content
Refers to materials created in various forms, such as copy, imagery and video. Each piece of content is designed to target audiences with sales and marketing messages at varying stages of buyers’ journey or to support the sales process.
Co-op
Also known as MDF (see MDF).
D-F
Deal Registration(s) (Deal Reg / DR)
A sales process which allows channel partners to register a sales opportunity with a vendor. Following this process generally provides the channel partner with benefits such as deal protection to prevent other channel partners from pitching against them for the same opportunity and better discounts. Commonly called ‘deal reg‘.
Distributor(s)
Also commonly referred to as ‘disties’, distributors are companies that buy products from a vendor and then resell or ‘distribute’ those products to their channel partner customers. Distributors typically add value to the vendor by holding stock, managing shipping, supporting partners with finance and credit lines, running training and enablement for partners and carrying out joint marketing campaigns on behalf of the vendor. Distributors do not sell directly to end users.
Distribution Business Manager (DBM)
A DBM typically works for a vendor and is responsible for managing the business relationship with one or more distributors, generally within a country or region.
Enablement
Enablement is training provided either by a vendor to a distributor, a vendor to a channel partner or a distributor to a channel partner. It can include sales enablement, technical enablement and marketing enablement and is designed to enable the recipient of the training to be more effective.
EMEA
EMEA = Europe, Middle East & Africa. It is a common sales territory grouping used by many global technology businesses.
Enterprise(s)
This is a term used to refer to large target accounts. These are typically public listed companies with high revenues and thousands of employees.
Enterprise License
Licensing that is designed for Enterprise accounts. This is usually the premium license level and typically comes with more features and configurability than a lower level of license.
End of Life (EOL)
This is a term used by a vendor when it decides to discontinue making a product, and support for that product will be phased out over a period of time.
FY
A fiscal year is a 12-month accounting period a business uses for financial and tax reporting purposes. A fiscal year is also known as a financial year. A fiscal year can differ to a calendar year – it doesn’t need to start on January 1 and end on December 31.
G-I
Gamification
Gamification is a term used to refer to activity that uses game-like elements to encourage participation and competition, such as a channel incentive platform that uses leaderboards to fuel healthy competition amongst a sales channel.
Gross Profit
Gross profit is the money you have left after paying for the things you sell to customers. You don’t get to keep gross profit. You still need to pay other operating expenses and taxes from this money.
GTM
A Go-To-Market strategy is a strategic plan for taking a product or service to market. It’s designed to maximise awareness, revenue and profitability.
It includes various elements such as target market, value proposition, sales and distribution channels, marketing strategy, pricing strategy, customer engagement and post-sales service models.
Global Systems Integrator (GSI)
This is a term used to refer to a large systems integrator that can operate at a global level (see systems integrator).
GSIs typically have a direct relationship with vendors, who typically have one or more individually directly responsible for managing and supporting the vendor’s GSIs.
Half Year – H1/H2
The financial year is typically split into halves and quarters in the tech sector. Halves are referred to as H1 for the first half and H2 for the second half. Quarters are Q1, Q2, Q3, Q4. H1 would include Q1 and Q2 and H2 includes Q3 and Q4.
For example, in the financial year starting in January, the year is broken down like this:
H1 = January to June (Q1 and Q2)
H2 = July to December (Q3 and Q4)
Each quarter and half will have a sales target.
IoT
The term “Internet of Things” explains everyday objects that connect to the Internet. They are devices that can transfer data between devices without human intervention.
ISV
Independent Software Vendor, also known as Software Publisher, develops software to run on a hardware device or in the cloud.
Incentive(s)
Also known as Channel Incentives.
J-L
JMF
A Joint Marketing Fund(s) is a financial resource used to support joint activities between a vendor and channel partners.
Key Accounts
A term used to denote your company’s most valuable customers.
KPI(s)
Key Performance Indicators are metrics used to measure a set objective or goal.
Land & Expand
This is a term used to describe a sales approach of securing a sale with an end-user customer (land) and then selling that customer further products or services (expand) to grow the overall revenue from an account.
LATAM
Latin America is a territory grouping used by many businesses globally.
M-O
Margin
Margin refers to the difference between the selling price of a product or service and its cost. The difference between the price of selling and its cost, is its profit.
Marketing as a Service (MaaS)
Marketing as a Service refers to a wide range of marketing services typically offered by distributors to their vendors and/or their partners. These services are chargeable and generate a marketing income stream for the distributor.
MDF
In channel marketing, Market Development Funds are the financial resources provided by vendors. They are allocated to channel partners, to support sales and marketing activities.
Minimum Viable Product (MVP)
An MVP is a product or service that has been designed as cheaply as possible with the minimum amount of features which is used to test and prove (or disprove) market demand for the product before it is fully developed.
NAMER
North America is a territory grouping used by many businesses globally.
New Logos
In channel marketing, New Logos are brand new customers for a vendor. Vendors often target their channel partners on closing business with New Logos.
Net Profit (NP)
Net profit is the money you get to keep after all costs, expenses and taxes are paid. Net profit is often called the ‘bottom line’ because it appears as the last line of your profit and loss statement after all expenses have been deducted.
Not for Resale (NFR)
Used to differentiate products given or sold to Partners for testing or demonstration purposes by Vendors and Distributors.
OEM(s)
Original Equipment Manufacturers produce products or components. Another company uses these components and sells them under its brand name. For example, Dell may use OEM components to build machines sold as Dell products.
P-S
Partner Marketing Fund(s)
Also known as MDF.
Partner Portal
All established vendors have Partner Portals. These are dedicated websites designed to house a variety of content and services for their channel partners. Basic ones typically include sales and marketing assets and more sophisticated portals include
- marketing automation platforms,
- product and pricing information,
- learning and development programmes,
- deal registration,
- MDF/Co-op fund management,
- partner programme guides and tiering,
- partner status and
- channel incentives.
Permissions are used to display the relevant information to the user, which may differ by partner type, distributor type, region and even language.
Partner Programme(s)
This is a strategic programme developed by a vendor that typically includes tiered levels of partnership, each with different requirements from the channel partner in return for different benefits.
Pipeline
In channel marketing, the ‘pipeline’ or ‘sales pipeline’ is a financial report that tracks all potential deals (sales opportunities) as they move through the various stages of the purchasing process to help with sales forecasting.
Deals are usually registered and have a dedicated ‘deal registration number’ assigned to them.
Profit
Calculated as revenue or income generated less cost of goods. Not to be confused with net profit.
Proof of Concept (POC)
A POC is where a product is installed and configured for an end user by a vendor or reseller so that it can be thoroughly evaluated before the end user makes a final decision to buy. A POC often precedes a full rollout of new technology where there is a large investment or the implementation is complex.
Proof of Performance (POP)
This is the physical evidence a channel partner must show a vendor to support a joint marketing activity that the vendor is either fully or partly funding via co-op/JMF/MDF. It typically includes a copy of the invoice to prove that the channel partner spent the money on the campaign, copies of the creative or content, a list of the leads generated and an invoice from the channel partner to the vendor for the agreed funding amount. This process helps vendors to evaluate the return on investment generated and in the case of large vendors is often managed by a dedicated marketing operations team to ensure compliance.
Proof of Value (POV)
Like proof of concept but in addition to demonstrating the solution capability, POV estimates the value of business additional benefits over time.
Quarters – Q1, Q2, Q3, Q4
For sales, marketing and accounting the financial year is broken down into four quarters which are typically referred to as ‘Qs’ followed by the quarter number.
For example, a financial year that starts in January and finishes in December is broken down like this:
Q1 = January to March
Q2 = April to June
Q3 = July to September
Q4 = October to December
However, if a company runs a different financial year its quarters will be different. So for example a company with a financial year starting in August will have quarters that look like this:
Q1 = August to October
Q2 = November to January
Q3 = February to April
Q4 = May to July
Quarterly Incentive Programme (QIP)
Quarterly Incentive Programmes are incentive programmes run quarterly or for the duration of a quarter.
Reseller(s)
A reseller is a company that buys a vendor’s products and/or services and sells them to end users. A reseller will mark up the price of products bought to generate a profit. This is referred to as ‘margin’.
Resellers typically sell a variety of technology products from a number of different vendors. They will either buy directly from one or more vendors or indirectly via one or more distributors – this is usually determined by each vendor’s channel model i.e. one-tier or two-tier.
There are typically two types of reseller
- A standard box-shift reseller that stocks and sells products but offers little to no support of service, much like an e-commerce store
- A Value Added Reseller or VAR, offers services and support which can include arranging demonstrations, running proof of concepts (POCs) etc.
Revenue
Revenue represents the total income generated before expenses and overheads are deducted.
Return on Investment (ROI)
Return on Investment is typically used to refer to the resulting revenue from a marketing campaign (the investment). Typically, you calculate it by subtracting the cost of the investment from the revenue generated, dividing it by the cost of the investment, and then multiplying it by 100 to express it as a percentage.
ROI can also be used for any other form of investment, and the calculation would be the same.
Sales Kick Off (SKO)
A Sales Kickoff (SKO) is an annual event designed to fire up and align the sales team around the company goals and sales expectations for the new fiscal year. SKOs often include workshops and training. Over the years, some vendors have turned these into very large events with celebrity guest appearances.
Sofware as a service (SaaS)
Software as a Service is software accessed and used over the Internet, instead of downloading or installing it on your computer. This usually has a subscription model associated with it. A good example is Adobe Creative Suite.
SKU
A SKU (Stock Keeping Unit) is a unique identifying code that is assigned to a product for inventory management and tracking purposes. It typically consists of a combination of letters and numbers that provide specific information about the product, such as its type, size, colour, and other attributes.
SMART goals
Channel marketing uses specific, measurable, achievable, relevant, and timely goals to ensure the effectiveness of objectives.
Small to Medium sized business (SMB)
This term typically refers to businesses that fall within certain size criteria, usually the number of employees or annual revenue.
Small businesses often have fewer than 100 employees and may have annual revenues up to a few million pounds.
Medium-sized Businesses generally have between 100 and 500 employees, with revenues ranging from several million to tens of millions of pounds.
Sales Performance Incentive Fund – SPIFF or SPIF
SPIF stands for “Sales Performance Incentive Fund.” This fund is used in channel marketing to motivate resellers and distributors to sell specific products or services or secure pipeline.
Manufacturers and distributors use SPIFs to incentivise sales reps and channel partners. They help increase sales of high-margin products, clear out old inventory, accelerate adoption of new products, build brand preference among partners and boost sales during specific time periods, like quarterly goals.
An example of a SPIF initiative is a “Buzz Day“, which is a call-out day designed to create excitement around a product or promotion.
Stakeholders
Stakeholder is a term to refer to a person or person(s) who has a vested interest in something. In channel marketing terms this usually refers to a marketing programme, campaign or project and can include members of the executive team from all companies involved in an activity.
System Integrator (SI)
Systems Integrators bring together lots of different technologies to create solutions that often have to be integrated into existing systems within an end user. These can include hardware, software, security, networking and storage, to create a complete and often complex technical solution for a customer. SIs are typically larger companies and many vendors will work with them directly. They are still considered channel partners and generally still buy through distribution.
T-V
Thought Leader
An individual who specialises in a particular subject or industry. They share insights, expertise and knowledgeable opinions with their audiences and are considered trusted experts. A company might follow a thought leadership strategy, positioning itself as an expert in a particular field.
Thought LeaderSHIP
Content written by a thought leader.
Tiered Sales Models
In channel marketing, the sales models describe how products flow from manufacturers to end users through intermediaries.
The one-tier sales model is where a vendor sells to the end user via resellers.
The two-tier sales model is where a vendor sells its products to end users via resellers, who buy those products indirectly via distributors. The distributors manage the relationship with the resellers.
Total Addressable Market (TAM)
The Total Addressable Market is the size of the market for a product or service. This typically includes both the number of accounts that can be targeted and the total revenue opportunity of that market.
Total Cost of Ownership
An estimation of the expenses associated with purchasing, deploying, using and retiring a product or piece of equipment. TCO, or actual cost, quantifies the cost of the purchase across the product’s entire lifecycle or fixed contract period.
UK&I
The United Kingdom and Ireland are a territory grouping/region used by technology businesses globally.
Unique Selling Point(s) (USPs)
Unique selling points are the unique benefits a product/service gives the end-user. USPs should differentiate a product or service from its competitors.
Value Added Distributor (VAD)
Similar to a distributor, VADs offer a far greater range of services to the vendor and partner. This can include becoming a dedicated service centre for the vendor, offering data profiling and enrichment to help target new accounts, providing dedicated service and support to resellers in a white-labelled capacity and providing marketing support.
Value Proposition
A value proposition is the way a company positions its product and describes the values it brings to its target customer.
Value added reseller – VAR
Value Added Resellers are resellers that add value to the products that they sell, typically in the form of services.
Vendor(s)
A technology vendor is a manufacturer of a product. In B2B, many technology vendors sell their products indirectly via a channel. Some may also sell directly and indirectly. Smaller vendors often start out selling direct to end users and then set up a channel as they grow and mature.
W-Z
Whitepaper
An article that is typically a few thousand words long, providing an in-depth look at a new trend or technology. It often provides guidance on best practices and weighs up the pros and cons of following a particular strategy or puts forward a solution to an industry problem.
Whitepapers are often used as a sales tool because they often address topics prospective customers are interested in.
Everything as a Service (XaaS)
Everything as a Service refers to a wide range of online services and applications available on demand typically via a subscription. Users can access them anytime, without the need for local installation.
Year on Year (YoY)
Year on Year is an acronym to describe a change in financial data from one year to the next. It is typically used to compare growth from the past financial year to the current one but can span a number of years to establish trends.
For example, there has been a ‘20% growth in revenue YoY’.
Z-line
The line the eye takes as it tracks down a web page, scanning from left to right to middle to bottom. It can inform the design of pages for optimum engagement.
Want to contribute
What did we miss?! Let us know if you want us to include a channel term or acronym to our channel jargon buster and we’ll credit you as the providers.