Understanding Market Development Funds: From Basics to Benefits!
Marketing Development Funds offer a massive opportunity for businesses and partners. However, many miss the opportunities to leverage these marketing funds because they lack the knowledge on how to use MDF effectively. With the right assistance, you can help drive growth for your business significantly.
But first, let’s understand the basics.
What are Market Development Funds (MDF)?
Market Development Funds (MDF) are resources granted by a vendor to its indirect sales channel partners for sales and marketing activities. The funds can be monetary or knowledge-based. It is a significant investment designed to drive demand generation and go-to-market activities for partner networks.
Marketers within channel partner companies use market development funds to support various initiatives such as creating marketing budgets, allocating marketing funds, streamlining fund requests, and process fund claims.
Read how Red Sky drove $1B in Channel Revenue with MDF.
Difference between MDF and Co-Op Funds?
While MDF is one source of vendor funding, another is Co-op funding. Though both share similar aspects, they differ from each other. MDFs are particular funds for vendors to use while co-ops are incentives, based on the marketing activities’ revenue.
Some industries distinguish between the two based on the term period and amount set––MDF, for short term marketing such as webinars or trade show appearances; Co-op funds for long term like annual marketing campaigns.
Co-op funds are usually granted to high – volume sellers such as distributors. They are set to accrue depending upon the percentage of local sales. Businesses give co-op funds as a reward or incentive based on the level of sales success.
Though the difference between the two varies according to industry and manufacturers, they share one particular characteristic. Both funding sources may be underused if programs are challenging to navigate or channel partners are not aware.
Benefits of Market Development Funds
● Having an MDF program is often considered a competitive advantage as it’s a unique tool for cutting costs in the long run and increasing profit in the short run.
● It generates a quantifiable return, such as the number of potential customers acquired, the number of leads generated, or leads converted to close the contract.
● With the MDF program, you can target your funds as per the business cases. You can work with small, growable partners to invest wisely and provide flexibility for partners who need increased funding.
● MDF-funded partner initiatives enhance marketing capabilities for channels and optimize partner strengths to produce the highest possible return.
● You can identify partners that can grow with you and the one’s needing additional attention or time. You can even identify growth trends by region, segment, and partner tier.
● Channel management teams can review metrics such as program participation rates, initiative completion rates, actual vs. expected ROI, etc., and work with individual partners to improve performance in a measurable way over the long term.
How can Red Sky Blue Water help?
MDF may sound like a lot of work, but indeed the outcomes are worth the investment. All you need to do is get in touch with us. Red Sky helps you to achieve far more with MDF and Co-Op funds. We help deliver meaningful ROI long-term while helping you improve your partner relations and customer experience.