In theory, your channel partners should be eagerly awaiting the chance to utilize the Marketing Development Funds (MDF) made available to them. After all, as far as they’re concerned, it’s essentially free marketing money! However, the reality of the matter is that 60% of marketing development funds are left unused on a quarterly basis. There are a number of reasons why channel partners leave such a large portion of the MDF pie untouched, ranging from excessive paperwork and lack of resources to poor communication with the business and low confidence in them.1, 2
As a business, this is not ideal for you. If your partners aren’t making full use of the resources provisioned to help sell your product, it isn’t being marketed to full potential. Even when partners do take advantage of the funds, it’s no secret that ROI on MDF can be far from ideal levels. There are, however, some actions you can take to ameliorate this situation and get more value from your investment:3
Make Partner Onboarding a Continuous Process
Yours is not the only business that your channel partners are engaged with. They’re most likely already dealing with several partner portals and overloaded with information about products and requirements of other manufacturers. If your onboarding efforts end with a one-time session, chances are that your partners won’t retain information for long. Turning it into a continuous process that builds a relationship and familiarity over time will help keep you top-of-mind and ensure that you and your partners are on the same page.4
Evaluate Partner Performance
It’s important to know exactly how your funds are being used. Keep track of the amount of money each partner spends, the promotions they’re running and the outcomes of those promotions. Once you know which activities are effecting positive changes in terms of sales and which aren’t, you’ll have a clear idea about those strategies that warrant more emphasis. This knowledge can help align marketing development funds and co-marketing campaigns, maintain uniformity in your messaging and branding, and provide a base for future planning. Use this information when deciding on the overall MDF budget for the upcoming year and determining the criteria that dictate the distribution of funds among partners.5, 6
Utilize Tools for MDF and Partner Management
A software solution for fund and partner management is very much necessary if you’re to get the most out of your MDF program. Be it a PRM tool or a standalone MDF management solution, it’ll play a critical role in pipeline visibility, performance evaluations, compliance checks, process streamlining, ERP payment generation and much more. Through these tools, you can eliminate the hassle of unnecessary paperwork, provide training and support to your partners, and even automate processes for fund allocation and claim submission, review and approval, all of which encourage partner participation. Such solutions simplify the task of communication with your various channel partners; whether you want to relay a message to all of them simultaneously or send specific information to specific segments, the software makes it easy to deliver information to the right partners at the right time. Having such tools also makes it easier to correlate deal registration and MDF utilization, giving you some valuable insight into ROI from each partner.6, 7, 8, 9
Inform Partners of Your Long-Term Marketing Strategy
Partners who don’t see success with you in the short term are likely to get impatient and will look to harness alternate opportunities that offer quicker payoffs. If you have a long-term strategy in place (which you should), it’s important to lay it out for your partners and communicate to them the value that they’ll derive from a long-term relationship with your organization. It’s also good practice to clearly state the guidelines, rules and regulations surrounding your MDF program. Such open communication serves to eliminate uncertainty, boost partner confidence and participation, and build long-term partnerships that are mutually beneficial.9, 10
Offer Marketing Concierge Services
Most channel partners lack the digital marketing expertise necessary to conduct campaigns of the required sophistication and simply do not have dedicated marketing resources. Considering these limitations, the need for third-party marketing concierge services is clear. Providing support through an external team of marketing professionals who have the expertise to assess a situation and identify and execute the best course of action to arrive at a target result will prove to be of great value to your partners and your business. With such guidance available, your partners are more likely to utilize the funds made available to them with confidence.11
The ultimate purpose of setting up a marketing development fund is quite straightforward: to raise local awareness of your products. To make that happen effectively, though, you need to not only encourage partners by providing tangible value, but also make the process of utilizing the MDF as painless and uncomplicated as possible. By integrating the above-discussed points in your MDF program, you should be well on your way to deriving maximum value from it.
References:
https://www.zinfi.com/blog/market-development-funds-why-channel-partners-do-not-use
https://computermarketresearch.com/improve-channel-partner-performance/
http://www.successfulchannels.com/9-key-success-factors-for-higher-roi-channel-mdf/
https://computermarketresearch.com/co-op-mdf-strategies/
https://www.channeltivity.com/blog/2017/market-development-funds-mdf/
https://www.modeln.com/products/mdf-management/
https://www.zinfi.com/products/partner-relationship-management/market-development-funds-management/
https://www.logicbay.com/blog/the-best-way-to-use-your-market-development-funds
http://www.marcommand.com/resources/making-the-most-of-your-market-development-funds
https://www.linkedin.com/pulse/why-channel-partners-do-use-market-development-funds-mdf-sanyal/
