22 October 2022

Top 8 Tips To Access Market Development Funds (MDF)

A vendor’s Channel Partner Program is meant to engage and enable Channel Partners to create value for end user customers.

market development funds | Filament

The best channel programs are structured to be mutually beneficial for the vendor and partners, whether they be Managed Service Providers (MSPs), Value-Added Resellers (VARs), System Integrators (SIs), Distributors, Aggregators, Retailers (e.g. for hardware) and various types of As-a-Service providers, e.g. Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service (PaaS).

Channel Programs are complex and require a well-defined value proposition and strategy to attract, recruit and retain ‘ideal fit’ Partners. Strategic consideration need to be made about channel marketing and Channel Partner enablement to support their marketing and sales programs. Some Channel Programs also support Partners directly by contributing or investing in their marketing, lead generation and sales.

These vendor contributions are called Market Development Funds (MDF).

What Are Market Development Funds (MDF)?

Market Development Funds (MDF) is a resource or sum of money that a vendor allocates to its channel sales partners to market their products and build brand awareness by funding a variety of marketing initiatives and activities. The funds can consist of monetary contribution, knowledge, a provision of executive or senior management time for appearances or co-hosted events, or providing access to in-house or existing resources.

How Do You Access Market Development Funds (MDF)?

MDF represents a meaningful resource in increasing or accelerating a Channel Partner’s sales and marketing efforts. However, accessing the MDF isn’t easy.

Every vendor’s Channel Program strategy is different. As a result, the structures and parameters of Channel Partner enablement is also different.

The process of accessing MDF varies according to application and acquittal criteria, the nature of the Channel Partner portal, the Partner’s relationship with the vendor and whether there are Partner tiers in place that have increasing MDF amounts built into higher tiers. Generally, MDF is allocated to Partners that can provide assurance to the vendor that this resource will be used for channel marketing purposes only.

Importantly, Partners usually have multiple vendor relationships across their service catalogue. That’s why it’s critical Partners can verify that MDF resources will only be deployed to promote the products and services related to the vendor’s business.

Unfortunately, market development funds have had a long history of being spent on channel marketing activities that are either not effective or don’t amount to any returns. So, the partner would also have to assure the vendor that their money won’t be misused.

Tips To Help You Access MDF To Increase Your Revenue Growth

Here are eight tips on how to access marketing development funds (MDF) to increase revenue growth.

1) Focus on a relationship with your vendor’s Channel Manager

Developing strong relationships with your vendors is the most critical component of all. Fundamental to this relationship building is enabling your Channel Manager to understand how they fit into your service catalogue. While Channel Programs are based around product or consumption sales margins, the real value for Channel Partners is in all the other high-margin services that can be delivered to end user customers. Working on strong and collaborative relationships for mutual understanding will be the most important factor in accessing MDF.

2) Develop a detailed campaign plan

In the past, MDF could be seen to be under-leveraged or misused due to lack of planning. The MDF proposal should a detailed plan for the MDF usage in the context of the campaign schedule. Creating an action plan that lists down the campaign purpose, target audiences, marketing assets and activities, metrics that will be monitored, reporting rhythms and target outcomes will support any MDF application. A detailed plan also gives your vendor’s Channel Manager assurance that the funds will only be used for activities related to the products and services relevant to the vendor.

3) Clearly demonstrate realistic ROI

Being able to show a Return on Investment (ROI) for the MDF is an important component, particularly when it comes to the acquittal of the funds. This means that your vendor’s Channel Manager must be able to report on what was gained by investing in you as a Channel Partner. This means that applying for MDF should include a demonstration or target ROI for the campaign, and for the vendor.

4) Outline measurable targets

Aside from ROI, the MDF proposal should also outline the targets the marketing funding will be used to achieve. Any target metrics measured should meaningful and relevant to lead generation.

5) Think digital with your approach

Common MDF applications have included requests for funding ‘lunch-and-learn’ or a ‘presentation and drinks’ evening. Looking for digital tactics to find prospects, nurture and qualify leads and convert sales will help in making an MDF proposal more promising.

6) Communicate, communicate, communicate

Regular communication between the vendor and the Channel Partner is of key importance when it comes to the effective utilisation of the MDF. Be upfront about how you will engage and keep the vendor updated on campaign progress. It will build confidence as to how the funds are being spent and will allow the vendor to give feedback about the partner marketing activities and let the partner know if they need to make any adjustments to their MDF spending strategy.

7) Figure out how and where to find net new prospects

Channel Partners often look to their vendors for access to prospects. Vendors want Channel Partners to find new audiences for their products. Developing a strategy to generate demand among net new prospects will make an MDF application stand out. Explore new avenues, develop prospecting lists, develop cold outreach campaigns and nurture funnels to generate demand for the vendor’s products.

8) Leverage external expertise

Experienced lead generation or marketing agencies that understand complex channel ecosystems and channel sales can be a great asset to have for both the Channel Partners and the vendor. These third-party agencies can ensure that MDF is deployed appropriately and can help in lead generation, creating clear plans, and marketing the products and services of the vendor and the partners.

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