Market Development Funds (MDF) and Co-op funds are important from the partner marketing and partner relationship management perspectives, as they help vendors increase partner engagement and improve the partner-level marketing of their products and services. MDF and Co-op funds are used by channel partners to pay for specific sales and marketing initiatives, and the vendor provides funding to support these initiatives. Examples include email campaigns, printing, local advertising, prospect and client events, and trade show booths. However, MDF is provided at the front end of a marketing effort, while Co-op funds are provided retroactively to reimburse a partner for an already executed program.
To ensure the success of MDF and Co-op programs, vendors and partners should work together to develop specific marketing initiatives appropriate to an agreed-upon strategy. Vendors provide the funds and maintain control of the funding for MDF, while control of the funds transfers to the partner for Co-op.
Eligibility for MDF and Co-op programs should be determined based on a clearly defined set of criteria, and vendors should have clear, measurable goals for every partner initiative. Reporting and analytics matter, and it is important to measure the ROI of each individual program. A next-generation PRM tool with partner marketing software capabilities can play a key role here. While the PRM tool can take care of MDF requests and disbursal but automation the whole process on the channel operations side, the partner marketing software capabilities, when baked into the MDF module of the PRM tool can help vendors understand how exactly the funds were used and what were the results of the partner marketing campaign into which the MDF funds were invested.
MDF benefits everyone involved, driving revenues for partners beyond what they might be able to do on their own and helping vendors cut their own marketing expenses. MDF can also build stronger relationships with partners, incentivizing them to develop marketing tools to sell more products and services.
However, some partners may not take advantage of MDF if there is a lack of a complete ecosystem that supports partners, including good partner development from onboarding to concierge support. Failure to work together with partners to develop initiatives that help both parties can also lead to inactive partners. Lastly, qualifying for MDF and Co-op should not be overwhelmingly bureaucratic and tedious.
To ensure success, vendors should determine goals before going into a program, maintain tracking of how MDF money is being utilized, and develop measurable factors to determine eligibility. Ongoing contact with partners is also important to maintain consistent communication and commitment to selling the vendor’s products or services.
In conclusion, MDF and Co-op funds are important tools for vendors looking to increase sales and enter new markets. By working together with partners to develop marketing initiatives and setting clear goals, vendors can benefit from increased revenues and stronger relationships with partners. However, failure to develop a complete ecosystem that supports partners, qualify partners for MDF and Co-op programs, and maintain ongoing contact can lead to unsuccessful programs.
