Did you know that 89% of Channel partners are looking for new sources of growth? It’s not surprising if you think about it. We are all looking to grow our reach and our revenue. Everyone is looking for new, better, different ways to try to make this happen. Let me introduce you to one of the methods that we recommend most here at Reel Axis: learn how to leverage market development funds to fuel your marketing and sales efforts.
Reel Axis Head of Strategic Partnerships, Ann Strandberg, recently hosted a webinar to teach partners how to maximize vendor market development fund dollars to supercharge marketing and sales. People really liked it, so we decided to write a post so more people could get their hands on Ann’s recommendations.
After years in the Channel, Ann has secured 7-figures in MDF dollars. During her years running the marketing department of one of the nation’s leading system integrators, she worked with dozens of vendors to design and deploy marketing and sales campaigns that drove tens of millions in revenue — all funded through MDF.
In this article, I’ll do a recap of the key takeaways from Ann’s webinar so that you can grow your revenue and maximize your MDF opportunities.
What are Market Development Funds, and Why Do They Matter For You?
Market development funds are incentives that a vendor provides to its ecosystem of partners (resellers, VARs, MSPs, OEMs, distributions, etc.) for driving sales and marketing programs to sell their products and/or service. The programs could be in the form of co-marketing, lead generation, and even MDF reimbursement for certain training or certification.
The idea behind MDF is that it helps both the vendor and the resellers by providing funding for activities that will promote sales. MDF can be used in several ways to increase sales, build mindshare, and create product/brand loyalty.
Common Eligible MDF Activities
While every vendor has different activities they may recommend and requirements for fund use, here are some of the common eligible MDF activities accepted.
This includes activities such as paid search and social media, content syndication, and SEO services. Some vendors may also include building out email campaigns, lead generation programs, webinars, and third-party outreach.
Events and Seminars
These types of programs aren’t as popular among vendors in recent years, but some vendors will still cover seminars, conferences, networking groups, and focus groups. Vendors will not typically cover sporting events or expensive dinners.
Content and Communications
Vendors will often cover the development of collateral such as website content, blog posts, white papers, guides, ebooks, and even video production. This also extends to public relations and analyst relations activities.
Internal partner events, training, account mapping/planning sessions, incentives to drive sales, and promotional merchandise all fall under sales enablement.
Sales enablement is the technology, processes, and content that enable sales teams to sell efficiently at a higher velocity and conversion rate.
What to Think About When Choosing MDF Activities
In today’s hyper-connected ecosystem, effective MDF activities nurture relationships with customers who have a common interest and who choose to regularly engage with your strategically placed content across multiple channels.
Essentially––campaigns that are focused on long-term relationships drive significantly higher ROI when compared to short-term sprints.
For a successful MDF campaign that leads to a stronger mutual partnership, increased sales are a priority. To gain additional market development funds, your campaigns should focus on increasing vendor revenue. It’s also important to understand the vendor’s requirements and preferred marketing approach.
Show the vendor that you’re a committed and trustworthy partner. A few ways to do this: complete all required certifications, provide sales reports regularly to the MDF account manager on the vendor side, build relationships with influential executives and drop their names into MDF conversations, and take any opportunity you can to attend in-person events the vendor will participate in to further build upon relationships built over the phone or virtually.
How to Request MDF and Process Overview
After you have selected your top 5 partners that you’ll be reaching out to, you’ll need to look at their requirements for MDF and start the request process.
The first step is always going to be the same: you’ll need to reach out to your channel manager or the vendor’s MDF coordinator and let them know that you want to apply for MDF funding. After that, each vendor will have its own process for approval and reimbursement.
This is where you’ll want to be strategic about what activities you include and how much you request while building a formal application document with a clear and concise overview of your plan.
Once you have approval for your plan and MDF, you can begin the execution phase of your campaigns. The process of requesting MDF and campaign execution is typically completed in 60-90 days. It’s important to execute within your activity window, or you will not qualify for full reimbursement.
When the activity is completed, you’ll submit a claim including proof of performance, which will need to be audited by the vendor before funds are dispersed.
Typically, claim auditing takes about 30 days and payment can take up to 90 days. Note that if you went over the estimated budget, vendors will not reimburse for the additional amount.
Proof of Performance and Claims
Proof of Performance (POP) for an MDF claim is required to receive reimbursement from the vendor. You must retain all original documentation and invoices as evidence of your expenditures. In some cases, receipts may be scanned and uploaded into the vendor’s portal.
POP must show that the activity occurred and is the activity type that was approved, the expenses being claimed are related to the business activity, and the reimbursement amount is itemized for all third-party receipts /costs incurred.
Tips for Success
- Never execute a project until it is approved, and your project submission dates must match the actual activity date.
- The activity must be executed before the project expiration date.
- Claims submitted after the deadline will almost always be declined.
- Most vendors have strict guidelines around the provisioning of gifts and entertainment to public officials and government employees (Average $50/person, typically not exceeding $200/person).
- Plan, plan, plan (most vendors plan strategic investments up to a year in advance of their budgets being allocated). Focus on positioning yourself as a thought-leader and expert in this field and building a long-term strategy.
- Study the MDF program and clearly define important ROI metrics for each activity upfront
Finally, show why your company is different. Brand differentiation and relationship building are increasing in importance. Vendors want to see that you have a solid plan in place before they approve your request for MDF funding, but they also want to see what unique traits you bring to the table.
Market development funds can be a great way to grow your business. By following the tips in this article, you can better understand the process for securing MDF and increase your chances of being approved by vendors. One of the key takeaways from Ann’s webinar was that you can maximize your MDF by focusing on activities that follow a long-term lead-nurturing strategy across multiple touch points.
If you still have questions or concerns about MDF, Reel Axis can help you establish a clear strategy and action plan. We consistently help our partners drive results by leveraging four core strategies –– lead generation, marketing operations, revenue operations, and content/creative.
Our curated combination of top-notch human talent and intuitive automation serves as our core capabilities to enable optimal results for a variety of needs––including MDF-driven campaigns for B2B tech companies.
We’re ready to help. Chat with a strategist today.