However, like any investment, your MDF program needs to be built on the foundation of best practice and designed in a way that delivers a measurable return.
According to Accenture, 89% of Channel Partners are looking for new sources of growth. With increased pressure from customers, everyone is trying to amplify their reach and customer base – and Vendors are expected to play a key role in this strategy.
Whether you’re starting your first Channel marketing MDF or looking to optimise your existing program, a structured, strategic approach is vital in achieving the results you and your Partners need.
How Market Development Funds can be used
As a baseline, it’s important to consider all the different ways MDFs can be used. While they’re commonly associated with shorter-term marketing activity like demand-generating campaigns or up-selling existing customers, these are just the beginning.
We’ve seen successful, high-performing MDF programs used to support Partners with:
- Reimbursing Partners for their investment in training
- Hiring additional staff
- Marketing events such as webinars and in-person conferences
In short, your MDF can be used for just about anything that helps a Partner grow. But with so many use cases to consider, it can be difficult to narrow your scope of activity and give Resellers clarity on what they can use the MDF for.
Before you do anything else, building your MDF program means starting with a look at your goals and objectives.
#1 Measure growth and potential, not just revenue
According to Forrester, high-performing organizations invest 23% more in MDF than low-growth organizations. But revenue is just one aspect of growth – and the success of your program should be measured by whatever metrics matter most to you.
Your organizational goals as a Vendor may be to generate more sales, but they could equally be to gain a foothold in a specific vertical or region. The more you can list the objectives of your fund before you launch, the easier it will be to avoid an investment that doesn’t deliver value.
At the same time, we recommend tying every goal to a specific measurement or metric. How will you know if your investment has achieved what it needed to? The right platform for managing your MDF can help tie every investment to measurable results.
#2 Put your Partners’ goals first
A healthy Channel is one where everyone is working to the same major goals. However, getting a strong uptake for your Market Development Funds – from the right type of Partner – means understanding what every Reseller and Distributor is looking to achieve.
From the perspective of your Partners, securing funds takes an investment of time and effort. If you don’t design your program with Partner’s goals in mind, you run the risk of poor uptake. Simply put, Partners need to know what’s in it for them, particularly if they’ll be expected to co-invest with you.
In general, the kind of investments that make sense for your organization will simultaneously deliver more revenue for your Partners. However, it’s important to consider the wider role of MDFs and the value you can get from investing in activity that’s less directly tied to sales.
#3 Invest where the impact is biggest
Once you understand the goals of your Market Development Funds and the needs of your Partners, it’s time to focus your efforts where you’ll really uncover the most ROI.
The most common pitfall of a new or reworked MDF is the assumption that more investment equals more impact. The highest-performing programs are specific and targeted, allowing Vendors to invest in the most intelligent places.
You may want to make your MDF available to all Partners, or segment the Channel out based on region, end-user verticals, or potential for growth. The Partners that already deliver strong revenue aren’t always the right people to take advantage of Market Development Funds.
Instead, focus your efforts where the potential performance increase is biggest. This commonly includes Partners who are expanding into new business areas or a focused campaign that targets a small-yet-lucrative end-user audience.
#4 Give every Partner a seamless, simple experience
Market Development Funds don’t generate a return if they’re sitting unused. Like any part of your Channel marketing, you’ll need to encourage adoption and remove the friction between requesting funds and having them ready.
An effective MDF management platform can act as a central hub where Partners can quickly summarise:
- What they need
- Why they need it
- The expected results and key metrics
An easy-to-use MDF Partner Portal makes handling and approving requests manageable, even as you roll out your MDF globally. At the same time, a good portal becomes a useful touchpoint to help keep your investments on track.
When you’re striving to maximise the return on your investment, there’s no need to wait until the funds are gone before you can course correct. With up-to-date information on progress and performance, shared openly with your resellers, you can maximise visibility at every stage – and strengthen your collaboration.
#5 Use MDF data to evolve over time
Finally, the best performing MDF programs make effective use of all available information. With a centralised platform for managing and monitoring MDF performance, you’ll constantly be learning what works, what can be improved, and how to de-risk your investment.
As a result, you’ll be able to more accurately forecast results over time – and make sure your investments are proportionate to the expected return.
With investments clearly linked to performance, robust data on ROI, and even a stronger knowledge of which Partners use Market Development Funds most effectively, you can safeguard the success of your program for years to come.
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