MDF Rules, Part 1: Make Sure Your Partners Use It, and Wisely

How is your company using its MDF dollars? Are you using your MDF dollars? According to the Channel Marketer Report, $25 billion in MDF and co-op funds go unused every year. That’s concerning.

Heather K. Margolis

August 7, 2015

3 Min Read
MDF Rules, Part 1: Make Sure Your Partners Use It, and Wisely

How is your company using its MDF dollars? Are you using your MDF dollars?

According to the Channel Marketer Report, $25 billion in MDF and co-op funds go unused every year. That’s concerning. But, what’s more concerning is how much MDF is used on activities with no chance of driving demand.

(That’s what MDF is for, by the way. It's not so partners can take their current customers and buddies all golfing.)

While 10 years ago golf events or tickets to a baseball game were good uses for MDF (they didn’t really drive new business, but let’s pretend they did), they certainly aren't anymore. Today’s partners need to fill the funnel at the very top with lots of contacts, a percentage of which will turn into leads, a smaller percentage will turn into opportunities and an even smaller percentage turn into deals.

In this two-part blog we will cover how to make MDF a successful benefit of any partner program. First I want to talk about what vendors and manufacturers can do to make sure partners aren’t leaving money on the table. In the follow-up post, I’ll discuss what channel partners should be spending their MDF on to successfully drive demand.

Here are 5 ways to ensure partners are using their MDF well:

  1. Communicate the value: At the beginning of each quarter have your partner-facing teams email your partners to inform them how much MDF they have to use and the deadline for using it. Offer suggestions on ways to use MDF effectively and create a communications plan that includes social media posts from your executive team and corporate social media profiles.

  1. Challenger Sale: Inform partners about what their competitors are doing. Most likely you have a partner that manages its MDF like a pro every quarter. Writing a blog post about partners that are doing it right shows other partners it can be done and shows them you have other partners doing a better job of representing you to their customers. There is nothing like applying The Challenger Sale to stir up motivation.

  1. Provide Third-Party Options: Some of our vendor customers do a great job providing partners with a catalog of options for traditional and new marketing best practices, including SEO, social media consulting, blog creation, email execution and virtual event support. Wouldn’t you rather your partners use MDF to create a stronger list they can market to all year than a list they bought full of people who won’t open their emails? Stay tuned, there’s more on that in Part II of this blog.

  2. Show me the Money: Show partners the money, the leads and the analytics. Show them what they can accomplish if they do things right. And make this conversation a long-term conversation, not just one that happens quarterly. If you show a partner each a quarter it got 20 leads and zero deals, it might get disappointed. But, showing the partner a quarter later how those 20 leads turned into two deals that more than paid for the effort, is well worth it.

  3. Back to Basics: One of the best things you can do—and you’re going to laugh when I tell you how simple it is—has to do with partners’ calendars. Have your partner-facing teams send their partners a calendar invite 30 days before the end of the quarter reminding them to use their MDF. That’s it. Do it every quarter, maybe even have them put something in the notes section with suggestions on how use the MDF and how much they have to spend.

What else would you do to help ensure partners are using their MDF? Tune in next week when we talk to partners about ways MDF best practices. We’d love your input! Don’t forget to tune in next week when we talk to your partners about what they should be using MDF to accomplish!

Contributing blogger Heather K. Margolis, the Channel Maven, has led channel programs for major IT companies.

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About the Author(s)

Heather K. Margolis

Heather K. Margolis, a self proclaimed “recovering channel professional,” founded Channel Maven in early 2009. Heather is passionate about enabling vendors and their channel partners to drive more business through their channel programs. Having led channel programs for companies like EMC, EqualLogic and Dell, Heather helps channel organizations of all sizes build smarter channel programs, manage channel relationships to find added value, and engage their communities through social and traditional media. Heather regularly speaks to manufacturer and channel partner audiences about getting the most from social and traditional media. She also speaks to a variety of audiences about entrepreneurship, building a service business, and B2B strategy.

A proud alum of Babson’s MBA program, Heather grew up in Massachusetts and now calls beautiful Boulder, Colorado, home where she and her husband (and dog Zoe) can be found hiking, foodie-ing, or attempting to tear up the slopes.

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