I’m often surprised by the continued disconnect between vendors and their reseller partners when it comes to MDF. Inspired by a recent CRN post, Mastering MDF: 5 Changes Solution Providers Would Make Right Now, here is a deeper dive into Mastering MDF—from both the vendor and partner perspective.
According to the CRN post, the quarter-by-quarter time frame to prove return on investment on MDF simply isn’t long enough in the mind of solution providers. And they are correct, it isn’t long enough. But, having worked with many large vendors’ MDF programs, I have found that they are NOT requiring results within a quarter; rather they are requiring feedback quarterly to show return on programs in place or programs that have occurred within the past 12 months.
Vendors do allocate MDF funds quarterly, which are typically use it or lose it. Sure, in a perfect world the MDF would be like your cellular minutes and never expire. However, vendors need to show return on marketing dollars and have a plan in place for those marketing dollar allocations each quarter. This quarterly allocation can actually be a benefit to partners as they get better at using MDF and planning with their vendors. If the vendor has left over MDF at the end of a quarter because not all partners took advantage of their funds, the partners working closely—and planning—with the vendor generally get first dibs on those funds.
Back to the CRN article another aspect of MDF programs they would change is the flexibility to try out new marketing campaigns to draw in fresh customers. Is there some large entity that would impose hefty fines if MDF is used improperly? (Hmmm, there might be, depending on your country). But regulatory issues aside (please reach out if you want to understand more about the regulations that govern MDF), on any investment you make you would expect results, and reports, and probably a whole lot more. Think of it like your stock picks—you dabble at first and then you invest more as the stock provides the consistent return you seek. As you work more closely with your core group of vendors you’ll get more familiar with their programs and you’ll earn more flexibility as well as more investment, as you become a proven entity that delivers.
Of course, part of working more closely together means both vendor and partner need to have open dialogue. Solutions providers in the CRN report felt they would be able to build marketing content more in line with the vendor’s brand with more transparency from the vendor. Just remember, transparency is a two way street. Vendors will “let you in on the secret” if you are willing to spend the time to build a long term plan to use the fund and align with their marketing goals. Otherwise it’s a transaction type of affair.
MDF: Beyond Marketing
On the vendor side, MDF are most valuable to a partner when those funds reach beyond marketing to technical training and business enablement. Time and again it has been proven that a partner’s greatest success occurs when vendors work with them to enable their success. However, “enablement” is much more than training on how to place orders, manage discounts, or get engineers certified. Enablement is the process of making your products and services central to the partner’s differentiation and success in their marketplace, and can be around a technology and/or around a vertical. We have many, many success stories centered around Partner Enablement, if you need help in this area, contact me now!
Remember, MDF management varies greatly based on the size of the reseller and the volume of business done. Larger resellers typically have more marketing capabilities and can better leverage the vendor MDF programs.
My general advice to resellers struggling with MDF management is:
- Focus on five core vendors and get organized around their MDF programs.
- Core vendors are those that make you different and better. Build your marketing message and efforts around them.
- Meet regularly with the core vendors to detail the tactics of your plan and how you will leverage the MDF
- Put the onus of documentation of the plan on the vendor (they generally will have more resources
- Use that to drive the regular conversations and the required actions to make sure you get the most from the MDF
- Communication is the key. Treat your core vendors like a marketing board and see how your results increase!