MDF and the Channel: What Happened to the Customer?

… tangibly help TPx and its partners expand their market.

TPx Communications’ Hilary Gadda

“I’m trying to see what this has anything to do with growing business, with us coming together and uplifting the channel. And I’m not,” Gadda told Channel Futures. “I’m seeing more cornhole tournaments with a purse of $10,000. I am seeing parties. I’m seeing golf.”

Where Are the Customers?

Partners note that MDF in many cases doesn’t make its way down to the customer. Instead, vendors are banking on expanding their partner base and, by extension, expanding their sales force.

“It’s not very client-focused; it’s more agent-recruitment focused,” said Micah Bevitz, CEO of iTelecom.

iTelecom’s Micah Bevitz

Moreover, Dyson said vendors need to figure out if they are looking for quantity or quality. For example, a contact center provider sponsoring an event might land the names of a dozen partners. However, Dyson said only a small percentage of the channel can sell contact center.

“Is it recruitment of volume, or is it getting to the people who actually can and will sell your stuff? That’s the question the vendors have to ask,” Dyson said.

Rad-Info’s Peter Radizeski

Peter Radizeski, president and founder of Rad-Info, said suppliers are handing out MDF with a mistaken premise about expanding their addressable market.

“The mistake almost every vendor makes is that they think the partner creates demand,” Radizeski told Channel Futures. “And that’s not what happens. All we do as partners is supply demand.”

Nancy Ridge said she tried to incorporate customer-focused MDF programs when she worked at a distributor. For example, her company hosted peer groups that agents attended with their customers. The partners would invite the client to a monthly meeting where multiple vendors would talk about a technological subject. Ridge said the vendors, partners and customers all saw the value of the events.

Mot importantly, it “always got sales.”

“I gave the MDF directly to the customer through the partner. And then the partner got to be seen as the venue for that customer,” Ridge said. “So why not let the customer eat the lunch?”

However, Ridge said the model didn’t seem to take off in the channel, and for various reasons. Ridge said agents might worry about their customer talking to another customer. Moreover, the vendor might not want their prospective customer to talk to another vendor at the event. Furthermore, many agents worry about their peers seeing their customers in the post-event LinkedIn photos.

“Nobody wants to post those events on social media,” Ridge said. “If I say on social media that this is my customer, then someone else is gonna go after them.”

Enablement

Partners still see potential in MDF that runs through the TSB and focuses on agent recruitment, but that comes with a caveat. It’s one thing to make the partner aware of your technology portfolio; it is another to enable them to sell it.

Bailey said education needs to run parallel to all the relationship-building events. Not a day goes by without a picture surfacing of a vendor taking a TSB and its agents out to a sporting event, but the pictures of CCaaS training sessions don’t seem as plentiful.

“If we’re only buying beer and going to tailgates, that MDF is dead,” Bailey said.

But Gadda said even vendors that do focus on education need to refine the presentations they make at events to truly catch the enablement side.

“I don’t see any training on selling,” Gadda said. “I see product knowledge training.”

Direct Enablement

Radizeski said vendors can get return on investment by paying for their partners’ training. For example, paying for an agent’s CompTIA security training can help them transform into an effective seller of your product.

“If you’ve paid for your partners’ training, they’re going to be able to sell better, and they’re going to use you because you paid for the training,” Radizeski said.

Dyson he would like to see more vendors giving their MDF money directly to the subagent, rather than to the TSB.

“Why are you giving someone $100,000 to be a diamond sponsor when you could split that up among your top partners like me? Give me $5,000, and I could put 10 CIOs around the table at a steak house for you to bring an executive in,” Dyson said. “And I don’t think the distributor partners can make those promises.”

Mejeticks’ Robert Devita

Rob DeVita, founder and CEO of  advisory firm Mejeticks, said MDF investment in subagents has increased.

“Some vendors still require it to go through the [TSB] but more and more are allowing us to directly access them — mostly used for lead generation and customer-facing events,” DeVita told Channel Futures.

Other partners aren’t seeing that change, however. Eclipse’s top handful of vendors will readily offer funds, but Dyson said he for years has been advocating for …