Maximizing ROI for MDF Begins with Winning Proposal

Written by Paul Yantus
March 21, 2019

Don't leave market development funds on the vendor's table.

Paul Yantus

In 2019, vendors will pump billions of dollars into market development fund (MDF) programs for their channel partners — but a surprising chunk of that money will just sit on the table.

Market development funds (MDF) help leverage vendor’s investments. Affiliates, channel partners, VARs and distributors use the money to sell the vendor’s product and create local awareness about the national brand.

According to one global study, as much as 60 percent of market development funds accrued by partners aren’t used on a quarterly basis. In the tech industry alone, that amounts to $25 billion in unused funds each year.

That means partners are passing on the chance to use what are essentially free marketing dollars. Why are they passing up a chance to use them? Some common reasons include:

Partners simply aren’t aware of the available funds.
Partners don’t have strong internal marketing resources and don’t feel confident they can put dollars to work effectively.
Brands don’t provide preconfigured marketing programs for channel partners to opt-in, making marketing execution and reporting difficult for the channel.
Complex fund requests, approvals, and preconfigured program enrollment slow down the whole process.

Whatever the reason, channel partners are missing out on funds that have the potential to increase their revenue. While some resellers and distributors may be apprehensive about rolling out marketing initiatives with MDF, the right approach can result in a win-win for channel partners and vendors.

Here’s how to access and leverage the MDF dollars you deserve to fuel sustainable growth for your business.

Consider the MDF Opportunity

A key benefit of most channel programs, MDF funds are typically earmarked for enablement, training, tools, resources and assets that can help your business close more leads and grow sales. Remember, vendors want you to use these dollars – when you succeed, they succeed, too.

MDF programs can take many forms, including performance-based programs, where funding is based on predetermined sales goals; and fixed-cost programs, where each partner is allocated a specific amount regardless of performance. Some vendors offer turnkey MDF marketing programs and tools, while others provide the funding for you to build your own campaigns. Depending on the vendor, MDF funding can cover everything from enablement and training to support in digital transformation of partner marketing efforts.

For resellers and distributors, MDF can be an essential lifeline to help:

Fill the pipeline. If your sales team is having trouble tracking down enough quality leads, MDF can allow you to invest in lead-generation activities that widen the net.
Close more sales. Marketing and nurturing activities, from custom email campaigns to vendor-approved events, can help move more prospects into the deal stage.
Become a recognized expert. In some cases, you can use MDF funds to research and develop content that establishes you as a leader in your field, such as white papers and e-books.