Four deadly sins that destroy the value of MDF

Albert Einstein defined insanity as doing the same thing over and over again and expecting different results. If you’re in the IT channel – and particularly if you’re a reseller – this definition of insanity could describe the use, or misuse, of market development funds (MDF). 

As most of you will know, these are the funds vendors allocate to distributors and resellers to help them accelerate sales revenue growth. There are a few common mistakes when it comes to use of MDF; below are four of the most common. It’s vitally important to be aware of how these mistakes could be costing you in time, money and your relationship with key vendors.

1. Resellers not using available MDF in the allotted timeframe

This is a partnership killer. I’ve been on both sides of the fence where a reseller’s MDF budget has been slashed or removed because the reseller hasn’t made use of the allocated funds in the agreed timeframe. The follow-up emails, phone calls and inevitable face-to-face meetings often aren’t pleasant. Ensure that you fully understand the timeframes around use of your MDF and the ramifications of not meeting these timeframes.

2. Lack of variation of marketing events and programs

Doing the same thing every quarter becomes uninspiring, tedious and allows competitors to get a strategic advantage. MDF allows you to be truly creative, providing your ideas fit within the rules of your MDF program, so let your imagination run free. Get the relevant stakeholders together and brainstorm something new. Avoid getting bogged down in the “Well, what did we do this time last year?” approach.

3. Your website not reflecting your MDF messaging

This ties into point No.2 above. Whatever the MDF event may be, ensure you have consistency across all media channels – especially online. It’s all too common to see resellers help a vendor launch a new product or service, but then have none of that filtering through into their online strategy. Technology marketing expert Allan Dib says, “If you look at most IT reseller websites, they’re basically just logo soup – a mishmash of vendor logos and then a whole lot of tech jargon. A good lead generation website should be set up strategically, and should link into your MDF campaign.” 

4. Not leveraging your certified vendor partner status

How many man-hours have you spent on having your people trained to meet vendor certification requirements? Whatever the number, you can, at minimum, double it. It’s the time your engineers and sales people spent attending training plus the opportunity cost of not having your people working on revenue-generating, customer-facing activities.

Most vendor certifications carry a lucrative MDF component. Ensure that your marketing, engineering, and sales teams are jointly engaged in the certification process. As this progresses, keep the vendor informed and get confirmation of how this ties back into MDF and the rules governing its use (hint: see point No.1). 

Get all this right and a vendor’s MDF trickle can turn into a tsunami for a reseller. 

Richard Farrell is director of Commercial Partnership Consulting. His channel and
sales roles have included Juniper Networks, APC by Schneider Electric and Express Data.