Channel Partners Tips: Securing Market Development Funds (MDF)

If you’re a veteran partner organization, you’ve probably already become well acquainted with market development funds, also known as MDF. Your providers are probably giving you access to some decent size budgets to ensure that you can run successful marketing campaigns that ultimately contribute to your bottom line. Great, right? Of course. What is not to like?

So, if you’re a rookie partner organization, you’re probably thinking right now, “How do I get access to MDF? That sounds amazing.” Well, it is.

With that said, we are going to proactively help you out and give you the rundown on MDF and how exactly you can gain access to it, and what to do with it when you’ve got it.

Let’s start with the basics.

What is MDF?

Market Development Sales or MDF are funds used in indirect sales channels, made available by a manufacturer or brand to help partners, resellers, VARs (value-added resellers), affiliates and distributors sell its products.

As it relates to VoIP, not all providers have a solid MDF program or budget that partners gain access to. That’s why it’s critical that you choose your top partners and ensure that they have funds available to you. You’ll need it. Selling without a marketing budget is like climbing a cliff without any gear.

What are the common funding structures?

1. Discount: partially subsidized marketing spend for affiliates
2. Rebate: a reimbursement for money spent on approved advertising
3. Fixed quantity: instead of a dollar amount, partners get access to a fixed number of resources
4. Stipend: a fixed quantity of money to opt in to marketing programs made available to partners

Typically, MDF is granted in 2 ways; the first being that funds are automatically earned through sales, and the second being that partners can apply for it on a need basis.

It is also important to note that MDF programs that partners have access to typically have restrictions on what the funds can be used on. For example, you’re not going to get cash to take your clients out to an LA Lakers game, or the PGA. Furthermore, you’re not going to be using it to cover employee salaries or cover overhead costs.

To put it simply… MDF is there for marketing initiatives that directly produce sales.

So, now that you know what MDF is, let’s take a look at some top tips for securing MDF from your providers.

KNOW YOUR PROVIDERS

Do your research, know from the get-go how you want MDF to contribute to your overall marketing strategy, and get familiar with your provider’s MDF guidelines.

Also, it’s critical to align your marketing strategy and how you plan to use MDF with your provider’s strategy. Open a line of communication with your provider and review your campaign goals. Don’t be shy. Ask questions. Get to know their own marketing strategy. Learn their language. Familiarize yourself with their branding.

You’ll also want to discuss some case studies. See how their other partners have used MDF and find out what worked and didn’t work for them. That way you’re not wasting your time testing out marketing programs that have already proven unsuccessful. If you know what other partners are doing and what’s working, you can cut to the chase, copy and paste. But, of course, add your own creativity to it.

KNOW YOUR PLAN

At this point, you’re ready to develop your strategy, campaign plan, expectations, and goals. The more comprehensive your plans are, the better you look to the partner.

So, what do you include in your plan? Ever-y-thing!

Who is your target? What vertical or market segment are you going after? What are your lead generation programs going to look like? How will you approach SEO? What kind of collateral will be developed? What tradeshows will you be attending? Will you be putting on webinars?

How will you promote on Social Media? What does your timeline look like? 3 months expectations? 6 months? 5 years?

So many questions to answer and each question has a very intricate answer, with a well-thought-out plan of action. It’s a lot to consider, but the more you bring to the table, the more your provider will believe in your efforts.

 KNOW YOUR SPEND

The worst thing you can do is go into a meeting with a provider and tell them all about the big plans you have for promotional activities but have NO idea what you want to spend on each initiative. Seriously, it’s not a good idea. You’ll get funny looks.

You don’t want to walk in there asking for big bucks, list off a bunch of programs you’ll implement and then when you’re asked what part of the budget will go to which program, just stand there like a deer in headlights. No, definitely not a good idea. You’ll likely leave that conversation disappointed.

But as mentioned earlier, providers want to give you the funds. When you are successful, they are successful. However, if you’re a rookie partner organization, you’ll have to work a little harder to get those funds you need to be approved. You’ll have to show them what you’re worth!

KNOW THE SUBMISSION PROCESS

Once you have all of those components straight, you can then submit your request for MDF if that is how your provider’s MDF program works. The stronger the plan is that you submit, the higher the likelihood of you receiving your funds.

Each provider that requires applications for MDF has a pre-determined process for applying. Find out exactly what format is required, who to submit the application to, what documentation is mandated to apply and if there is a deadline.

The more prepared you are, the less likely the process will be delayed and you can get your marketing programs up and running.

If you’re receiving MDF based on sales, everything mentioned above still applies, only sell more and you’ll get more funds! Remember, providers WANT you to be successful, so they are chomping at the bit to give you funds. Give them more reasons to want to!