When used correctly, market development funds (MDFs) can be an excellent way to grow your channel business. We’ll share a few best practices for you to use these funds more effectively, but first, it’s important that you understand what they are and why they aren’t always a fan favorite in the marketing world.
Market development funds are made available by a brand to help channel partners sell more of their products. MDFs help build brand presence and improve marketing efforts. And while they can be effective, they’re often both underrated and underused.
Sometimes MDFs get a bad rap for yielding low returns, but this is because the funds are either poorly spent or, many times, not even spent at all. Many also cite disorganization, red tape, and constant modifications to the program as common MDF pain points.
On the flip side, when the right strategy is put in place, MDFs can be a successful way to grow your channel program. Cisco Systems is a good example of a company with a program that’s well managed and has positive results. It offers a “virtual wallet” to partners, a tool for spending money on sales and marketing activities.
Cisco also created a “marketing concierge” program, which is essentially an outreach effort to ensure partners are spending MDFs and to make them aware of when funds will expire to avoid wasted dollars. Because 80 percent of Cisco’s business comes from the channel, it has placed a major emphasis on working with partners.
Of course, what you really want to know is how you can use MDFs wisely to boost your bottom line. By following a few of our guidelines, you’ll be reaping the rewards of a successful MDF program in no time.
You should develop a clear MDF strategy, define your objectives, and share them with partners. By establishing a plan up front, you can avoid confusion on the future direction of the program. With that said, you should make sure to be fluid and allow for flexibility in the plan so you don’t limit your partners creatively.
It’s important to steer partners in the right direction without holding them back. Guide your partners toward ideas for using the funds, but don’t force anything. This will help provide your partners with focus while still leaving room for creativity. By giving them the flexibility to fully market and brand your content, you’ll empower your partners and help set them up for success.
You should also track the results of your MDF efforts and then use what you learn to optimize your strategy in the future. Investing in partner relationship management (PRM) software will help you track results, then learn and repeat what worked the best. Make it a point to celebrate the wins of the program by sharing MDF successes to motivate partners.
When best practices are followed, MDFs can be an effective way to boost channel sales. By developing a clear strategy, collaborating with partners, and tracking your results, you can build out a successful MDF program.
Want to learn more about PRM software and how it can help streamline your channel sales and improve your partner relationships? Request a free Allbound demo to learn more about our PRM solution.