MDF Funds & How to Use Them

In uncertain economic times, Market Development Funds (MDF) can be a precious resource for channel partners (resellers, distributors, ISVs) looking for budget to fund sales and marketing activity.  Yet industry surveys report that as much as 60 percent of available MDF funds go unused.  By some measures, that may add up to $15 billion of unspent marketing budget every year in the US alone.

Why are channel partners leaving so much money on the table?  For some, it may be the hassle of navigating an onerous MDF approval process.  For others, it might be a lack of marketing resources.  Whatever the reason, unused funds are a lost opportunity for both the partner and the sponsoring vendor.

The rules by which partners are eligible for MDF, the way in which those dollars are allocated, and the manner in which partners can use the funds, vary widely. Some MDF programs are highly structured, with a pre-configured menu of options or deliverables. Others rely solely on the partner submitting a proposal for how they plan to spend the funds and what results they project.

Whatever the process, partners should invest the time in planning and preparation to ensure those sales or marketing dollars reap the greatest reward. At our agency, we’ve developed and executed a wide range of MDF-funded programs for dozens of tech clients. Here’s what we believe makes a difference:

* Understand the requirements for reimbursement and how you’ll be expected to measure success.  Work with your BD representative or agency partner to define clear expectations and KPIs.

* Define your message.  What’s your unique selling proposition (USP) in the context of your partnership with this particular vendor?  What is the value-add that makes you distinct from other partners in a way that customers would want to work with you?  Weaving that story into content, ads, and other campaign assets will help your company stand out.

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* Establish firm roles and responsibilities for the review process: marketing, corporate communications, sales, etc.  Approval cycles on partner-related campaigns can be complex, so it’s wise to have agreement up front on who needs to review what, and how quickly.

* Define up front the kind of system access needed to implement the program being funded: marketing automation, CRM, CMS, LinkedIn accounts, email templates, image libraries, etc.  Don’t let last-minute security protocols prevent you from getting a campaign in market.

* If you’re strapped for marketing resources, ask your BD rep if the vendor has a marketing concierge service (as many do) or if they have a list of approved agencies who are authorized to work with partners and through whom MDF funds can be spent.  A qualified agency can advise on the best use of funds and provide the expertise (strategy, creative, media, marketing ops) to maximize results.  Many will even help write the proposal to apply for funds.

* What content assets or other calls to action (CTAs) have worked best in the past?  What actions do you want your prospects to take?  The sales team may want demo requests but the best option may be a content asset (say, an ebook) that appeals to someone with the problem that your solution can solve.  Be realistic.  Set the bar too high and campaign results may be compromised.

* Certain lead generation programs – notably content syndication – tend to be popular uses of MDF funds because they’re perceived as easier to launch and manage and because they guarantee a tangible result to the sponsor.  But “easy” doesn’t always equate to the best choice.  Depending on your audience, product category, and level of brand awareness, maybe what you really need is a search campaign.  Or an ad on LinkedIn.  Or an engaging content asset (ebook, Webinar, white paper) that can pay dividends over the long term and serve a myriad of uses (Website CTA, lead nurturing, lead generation, social media).  Consider your options carefully.

* If you do invest in lead generation, set clear expectations for sales follow-up.  Don’t buy hundreds of leads if you don’t have the BDR team or a nurture program to maximize their value.  (Tip: most raw marketing leads benefit from a nurture sequence before turning over to sales.)

Spear Marketing Group is a full-service B2B agency and authorized agency partner for a number of leading technology suppliers. To learn how we work with channel partners looking to maximize their use of MDF funds, view our MDF resource page or contact us to schedule a free consultation.


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